FT–ICSA Boardroom Bellwether survey Summer 2018

The FT–ICSA Boardroom Bellwether is a twice-yearly survey of FTSE 350 companies that seeks to gauge the sentiment inside UK boardrooms. It canvasses the views of their company secretaries to find out how boards are responding to the challenges of the economy, market conditions and the wider business and governance environment.

Questions cover a range of business concerns, topical issues and specific governance concerns to provide unique insight into what British boards are thinking. Some questions change from survey to survey, but the core remains the same to reveal trends and shifts in opinion.

Use the tabs below to explore the key findings of the Summer 2018 FT–ICSA Boardroom Bellwether survey, which was published in August 2018.

The business environment

In spite of considerable political volatility in a number of countries, this latest survey of economic confidence shows boards reasonably confident about growth prospects overseas, with only 24% anticipating a decline and the majority (42%) predicting that economic conditions will remain unchanged over the next 12 months. There is a similar picture on a sectoral basis, with 28% predicting improvement, 38% no change and 30% a decline. This is in marked contrast to the UK, where confidence continues to be low, with just 6% of respondents expecting an improvement, down from 8% in our winter 2017 survey and similar to the 5% that we saw in summer 2017.

There is an interesting dichotomy between clear majorities of respondents believing that the UK economic outlook will worsen, presumably as a result of Brexit, and 58% predicting that Brexit will bring no change for their individual companies. What is more, just 39% of the companies taking part in the survey include Brexit among the principal risks facing their company.

Board composition

Progress towards achieving boards that are more representative of their customers and markets remains disappointingly slow despite continuing pressure to improve gender balance and broaden ethnic and cultural diversity.

Progress on gender diversity appears to be stalling as, while 71% of respondents now rate their boards as diverse or very diverse in terms of gender, many of the companies that were neutral six months ago now regard their board as not diverse in terms of gender – the neutral vote falling from 23% to 8% and those not regarding their board as diverse rising from 6% to 21%.

The picture is even more worrying in terms of ethnic diversity where just 25% of respondents consider their boards to be diverse, down from 34% in summer 2016 and back to the levels seen in our winter 2015 survey.

Succession planning remains an issue with just 45% of our respondents believing their pipeline to be sufficient, the same amount as those believing it to be insufficient. Furthermore, the lack of progress in the female executive pipeline risks stalling progress on gender balance in the boardroom.

On a more positive note, those companies that felt their pipeline to be insufficient appear to be addressing the problem better, with more weight placed on potential during the hiring process for pipeline roles and some companies identifying and developing talent two to three levels below board level.


Cyber risk remains the primary risk issue facing FTSE 350 companies with 72% of respondents believing that their exposure to cyber risk is increasing and 88% revealing that their board is increasing spending on mitigation of cyber risk. In terms of overall risk, cyber risk sits at 39%, above global economic risks at 30% and Brexit and geo-political tension both trailing at 6%.

Other areas that boards are focusing their attention on include technological disruption, sexual harassment guidelines and the ability to employ appropriately skilled staff. Technological disruption has moved higher up the agenda with 48% of boards now having discussed the risks and opportunities of Automated Intelligence as opposed to just 36% in our winter 2017 survey.

Encouragingly the number of boards not having discussed whether or not current policies and guidelines on sexual harassment in the workplace were fit for purpose has fallen by two-thirds from 33% to 11%. This suggests that the majority of FTSE 350 boards have considered the matter with due seriousness, although there can be no room for complacency on such an important issue.

In terms of a skills shortage, 55% of respondents feel that their company’s ability to employ appropriately skilled staff has not changed over the last two years, although 28% feel that it has worsened. Reassuringly, virtually all of the companies who indicated that it was an issue are taking actions to address it.

Regulation and compliance

The majority of companies were ready for the General Data Protection Regulation (GDPR) requirements that come into effect this May – just 7% reported that they were not. However, just 39% of respondents feel that their company’s customers will be better protected by GDPR and of those that do only 21% believe that customers will get a better service (75% think that there will be no change).

In terms of getting the workforce voice into the boardroom, most companies (34%) are currently in favour of a designated non-executive director, ahead of 11% preferring a works council or similar. No respondents favoured the idea of appointing an employee director, although 21% of respondents are considering a combination of one or more of the proposed options and something else. Others are considering various alternative solutions.

Reporting on the gender pay gap does not appear to have been as difficult as some might have anticipated. 73% indicated that it was not difficult, while just 23% said that it was. Although 69% of respondents indicated that their company would be taking action to reduce the gender pay gap, of these, 59% indicated that this action was not the result of gender pay gap reporting.  

Executive pay

Engagement between companies and investors on remuneration issues appears highly effective with 59% of our respondents’ remuneration committees making changes to a remuneration policy following feedback from investors and 30% not having done so because no changes were requested. Remuneration committees are also sensitive to pay and employment conditions elsewhere in the group with 90% of respondents saying that their remuneration committee took note of these elements when determining salary reviews. Furthermore, 46% of companies’ remuneration committees consider the pay ratio between the CEO and the average employee as part of its process for discussing executive remuneration.


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