A recent study dove deep into the inner-workings of all the top FTSE companies to take a look at the current state of gender balance amongst major UK firms.
I’m going to share some insights from that study, including the best and worst FTSE shares for female representation. I’ll also reveal how those companies have performed over the last year. Keep reading for some investing enlightenment.
[top_pitch]
What was FTSE study all about?
The study was called the ‘FTSE Women Leaders Review’, and it didn’t just look at FTSE 100 companies, it actually analysed firms from the whole FTSE 350.
The review was designed to track the progress of gender balance and see whether things are improving year on year.
It looks like 2021 was relatively successful in working towards a more balanced system right at the very top of our economy. According to the findings, in almost half of all FTSE 100 companies, women now make up 40% or more of the company board.
This figure exceeds the original target of 33% that was set in 2016. When looking at the total female board representation for 2021, the FTSE indices looks like this:
39.1% – FTSE 100
36.8% – FTSE 250
37.6% – FTSE 350
What are the best FTSE shares for female representation?
The following firms had the best numbers when it came to the proportion of women on their boards:
Rank
Company
Women on board
Sector
1
Diageo (DGE)
60%
Food, beverage & tobacco
2
Auto Trader Group (AUTO)
55.6%
Technology
3
Land Securities Group (LAND)
55.6%
Real estate
4
3i Group (III)
55.6%
Financial services
5
Burberry Group (BRBY)
54.5%
Consumer products & services
6
Admiral Group (ADM)
54.5%
Insurance
7
Rightmove (RMV)
50%
Real estate
8
Halma (HLMA)
50%
Industrial goods & services
9
Severn Trent (SVT)
50%
Utilities
10
abrdn (ABDN)
50%
Financial services
What about the worst FTSE shares for female representation?
Now we get to the naughty list and the companies that have the worst levels of female participation on their boards:
Rank
Company
Women on board
Sector
1
EVRAZ (EVR)
16.7%
Basic resources
2
BHP Group (BHP)
20%
Basic resources
3
Ocado Group (OCDO)
25%
Personal care, drug & grocery stores
4
Smith & Nephew (SN.)
27.3%
Health care
5
Berkeley Group Holdings (BKG)
28.6%
Consumer products & services
6
Antofagasta (ANTO)
30%
Basic resources
7
St. James’s Place (STJ)
30%
Financial services
8
Hikma Pharmaceuticals (HIK)
30%
Health care
9
United Utilities Group (UU.)
30%
Technology
10
Sage Group (SGE)
30%
Financial services
Perhaps unsurprisingly, not a single firm on this list has a female CEO, suggesting that maybe change is required from the top down.
[middle_pitch]
How have these shares performed?
I dug into each of these shares to compare how they’ve performed over the last year. I did so, ideally, to see if there’s any kind of correlation between female representation and share price. The results are quite astounding.
Of course, a company’s share price isn’t the be-all and end-all. But looking at the performance over the last 12 months shows some useful insights. Here’s what the results looked like:
Rank
Company
12-month share price performance
Women on board
1
Severn Trent (SVT)
25.99%
50%
2
Diageo (DGE)
25.08%
60%
3
St. James’s Place
20.06%
30%
4
Land Securities Group (LAND)
19.15%
55.6%
5
Sage Group (SGE)
16.87%
30%
6
United Utilities Group (UU.)
16.09%
30%
7
3i Group (III)
15.94%
55.6%
8
Burberry Group (BRBY)
9.85%
54.5%
9
Auto Trader Group (AUTO)
8.3%
55.6%
10
BHP Group (BHP)
2.22%
20%
Does this give us any useful insights into the FTSE 100?
Only three of the top 10 firms for female board participation saw a drop in share price over the last year. Whereas six of the 10 worst firms saw a reduction in share price.
So, if you were to follow and invest in each of these two lists like an index, you would have ended up much better off by investing in the FTSE 100 firms with stronger female boards. On the whole, the more progressive companies with a more equal gender split tended to perform better.
This isn’t a rule to invest by, and there are lots of other factors at play. But, it might suggest that firms willing to change how they operate are more agile. It highlights an ability to do what needs to be done to perform whilst also caring about how the company is structured.
How do you invest in FTSE companies with strong female participation?
If you’d like to invest in some of the shares mentioned here that have a solid female board presence, you can use a share dealing account to invest. Most top-rated platforms should give you access to the FTSE 100. However, only some brokerage accounts will include the smaller cap companies on the FTSE 250 and 350.
To find other stocks and shares with high female participation, you’ll have to do your own research. Some brokerage accounts can guide you. One example is Freetrade. The company has a useful category on its ‘discover’ tab highlighting stocks and shares with female CEOs.
Just remember that all investing carries risk, so be sure to do plenty of research. And don’t make a strong female presence your only reason to invest. Take a look at the whole business before putting your money to work.
The post FTSE 100: best and worst shares for female representation! appeared first on The Motley Fool UK.
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