Brexit fears lessen but gloom about UK economy remains, latest Boardroom Bellwether survey finds

London, 6 August 2018 – Boards lack confidence in the UK economy despite reduced concerns over Brexit according to a survey of FTSE 350 companies out today by ICSA: The Governance Institute. UK boards are also preoccupied with risk, boardroom diversity and the gender pay gap, with the number of boards not seen as gender diverse rising and 69% of companies looking to reduce the gender pay gap.

The key findings of the summer FT-ICSA Boardroom Bellwether survey, a biannual survey in association with the Financial Times which canvasses the views of the FTSE 350 on the external environment and key governance issues such as board diversity, regulation, corporate governance and risk, are as follows:

  • UK economy: Confidence remains low with only 6% of respondents anticipating an improvement in the next twelve months, down from 8% in winter 2017 and 13% in summer 2016. 55% of respondents predict a decline, a big increase on 24% in summer 2016, but continuing the lessening trend seen since winter 2016 (72%) and 2017 (69% in summer and 56% in winter). The number of people anticipating no change has increased from 13% in winter 2016 to 31% this summer.

    ‘It is hard to see any other reason for continuing pessimism over the economy other than the ongoing Government infighting over Brexit and the lack of a clear plan if there is no deal at the end of the negotiations,’ says Peter Swabey, Policy and Research Director at ICSA: The Governance Institute 
  • Global economy: Confidence is higher than for the UK with 25% of respondents anticipating an improvement in the next twelve months (down slightly from 29% in summer 2017), 24% a decline (27% in summer 2017) and 42% predicting no change (up from 27% in summer 2017).

    ‘Confidence among businesses remains strong despite the increase in trade policy risk associated with tit-for-tat tariffs. 41% of respondents think that capital expenditure will increase in the next 12 months. It will be interesting to see if this confidence remains later in the year.’ (Peter Swabey)
  • Brexit: 42% of respondents rate a UK exit from Europe as potentially damaging, down from 54% in summer 2017. Fears about Brexit appear to be allaying as this is the fourth survey in which fears about damage have lessened (59% in winter 2016, 54% in summer 2017 and 50% in winter 2017). No respondents rate Brexit as positive, however, compared to 9% who did so in winter 2016.

    ‘There is an interesting dichotomy between clear majorities of respondents believing the UK economic outlook will worsen and yet more than half (58%) predicting that Brexit will bring no change for their individual companies. Furthermore, 61% do not regard Brexit as a principal risk.’ (Peter Swabey) 
  • Political environment: The perception of the UK Government as business-friendly has fallen from 54% in winter 2016 to 29% this summer. Despite this, the opposition has not benefited with 78% of respondents viewing Labour as not business-friendly and only 2% considering that it is (unchanged from winter surveys in 2014, 2015 and 2016).

    ‘The overall mood of lack of trust in business and some significant corporate failures have made business-bashing politically popular and driven the Government to certain proposals which some in business might regard as unhelpful.’ (Peter Swabey)

The key governance findings include:

  • Boardroom diversity: Diversity and inclusion are rising up the agenda, but progress in creating more representative boards remains slow. The number of boards not regarding their board as diverse in terms of gender has risen from 6% in winter 2017 to 21% and women still remain underrepresented at senior level generally. Ethnic diversity remains the most concerning issue with just 25% of respondents considering their boards to be diverse, down from 31% in our winter 2017 survey.

    ‘These results point to a risk of complacency setting in on gender diversity, with almost three-quarters of firms thinking they are doing enough, when the reality is that we have a long way to go. There is increasing awareness of the need to pick up the pace on other forms of diversity, with the majority of firms saying they need to do more on addressing ethnic diversity in the boardroom.’ (Matthew Fell, Chief Policy Director, CBI UK)
  • Risk management: Cyber risk remains the top concern (72%), with 88% of boards increasing spending on its mitigation. More consideration is being given to the risks and opportunities of Automated Intelligence (AI) with the percentage of boards paying attention to AI jumping by a third to 48% in just six months.

    ‘The fundamental approach of building resilient organisations with robust processes, a healthy risk culture and communications will be required albeit maybe at a nimbler pace. Risk management has never been higher up the business agenda.’ (Socrates Coudounaris, Chairman, Institute of Risk Management)

    69% of respondents indicate that their board is satisfied or very satisfied with current policies and guidelines on sexual harassment in the workplace. The percentage that do not know has fallen by two-thirds from the winter 2017 survey to 11%, although that is still too high.

    ‘Tone from the top is critical when building effective corporate cultures and tackling toxic behaviours. We know that sexual harassment is one such issue: boards must adopt a zero-tolerance approach. They need to ensure policies are clear and direct, and are implemented effectively by management and understood by the workforce.’ (Edward Houghton, Head of Research and Thought Leadership, CIPD)
  • GDPR: 44% of respondents feel that their company’s customers will not be better protected by GDPR, with 39% saying that they would be and 17% unsure either way. For those who believe that customers will be better protected, 21% believe that they will also get a better service, while 75% think there will be no change. 
  • Corporate governance reform: The most popular choice for companies considering proposals in the UK Corporate Governance Code for getting workforce voice into the boardroom is that of a designated non-executive director (35%). No boards indicated that their board favoured the idea of appointing an employee director. 
  • Executive pay: 59% of remuneration committees have made changes to a remuneration policy following feedback from investors, 11% have not and 30% have not because no changes were requested. In the winter 2017 survey, 68% made changes, 4% did not and 28% did not because no changes were requested. 90% of remuneration committees are sensitive to pay and employment conditions elsewhere in the company, especially when determining salary reviews. 
  • Gender pay gap: 69% of companies will be taking action to reduce the gender pay gap, but 59% indicate that this action is not the result of gender pay gap reporting; 41% said that it was.

- Ends -

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Notes to Editors:

  1. ICSA: The Governance Institute is the professional body for governance. We have members in all sectors and are required by our Royal Charter to lead ‘effective governance and efficient administration of commerce, industry and public affairs’. With over 125 years’ experience, we work with regulators and policy makers to champion high standards of governance and provide qualifications, training and guidance. Website: 
  2. The Financial Times is one of the world’s leading business news organisations, recognised internationally for its authority, integrity and accuracy. The FT marks 130 years in 2018 with a record paying readership of more than 930,000. The FT is now a majority digital content business, with 740,000 digital subscriptions representing more than three-quarters of the total paying audience. Content revenues represent almost two-thirds of total revenues, double the share of five years ago.
  3. The full report is available to download at 

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