Summer 2021 Boardroom Bellwether

FTSE 350 Boardroom Bellwether survey

The FTSE 350 Boardroom Bellwether is a twice-yearly survey by the Financial Times and The Chartered Governance Institute UK & Ireland that seeks to gauge the sentiment inside British boardrooms. It canvasses the views of FTSE 100 and FTSE 250 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 matters 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.

It should be noted that no Boardroom Bellwethers were produced in 2020 because of the impact of the COVID-19 pandemic. The key findings of the summer 2021 Boardroom Bellwether Survey, which took place in August 2021 and was published in November 2021, are shown below.

The business environment

In the 23 months since the last Boardroom Bellwether survey was published in December 2019, the COVID-19 pandemic has wrought havoc on world economies. The global economy shrank by 4.4% in 2020 according to IMF estimates, the worst decline since the Great Depression, and recovery has been uneven across the globe.

While the UK economy has been slower to rebound than the US’ or China’s, nevertheless British boards are optimistic about the future, with the majority of respondents to this latest survey predicting a significant improvement to global economic conditions over the next 12 months and 79% of respondents predicting an improvement to the UK economy. This is considerably more than the 36% seen in December 2019 when worries about the impact of Brexit were dampening expectations of the UK economy. The outlook is also positive for industry-specific economic conditions, with 81% of respondents considering that there will be an improvement.

The impact of the pandemic has not just been restricted to the economy. There has also been a huge effect on working practices, with numerous lockdowns forcing large parts of the UK workforce to work from home. Unsurprisingly, 86% of the companies that responded to the survey now have plans to make changes to office-based working. Most respondents believe that working from home has not impacted productivity negatively so it makes sense for companies to review their needs, and their employees’ needs, in this respect.

There is also the impact of Brexit to consider. While 51% of companies state that Brexit has not affected them, 49% of respondents do consider that it has caused some or significant damage to their company with well-publicised issues such as HGV driver shortages, increased costs of materials and delays on lead times all cited as reasons.


Since our last survey in December 2019, the murder of George Floyd in the US and the subsequent focus on racial issues across the globe has pushed diversity higher up the scale of public consciousness, with British boards now expected to be more representative of the communities they serve.

There is good news on the gender diversity front with the final Hampton-Alexander report published in February 2021 showing that the FTSE 350 had reached the target of women making up 33% of boards by the end of 2020 – a notable achievement given that only 9.5% of FTSE 350 board members were women when Lord Davies launched his review into women on boards in 2011.

Progress has been slower on the ethnic diversity front, but data from the March 2021 Parker Review raised hopes that there is still time to meet the ‘One by 2021’ target set by the Review. The progress shown in that report is also mirrored in ours. Some 55% of respondents consider their boards to be ethnically diverse, up from 29% in December 2019.

In terms of pay gap reporting, 59% of the companies that responded to this latest survey are planning to take action to reduce the gender pay gap. With regard to ethnic pay gap reporting, a total of 57% of respondents believe that it will be very difficult or difficult to report on this.

Employee engagement has increased during the pandemic, with over half of companies stating that their approach to workforce voice has changed over the period. Having a designated non-executive director to represent workforce interests in the boardroom remains the favoured option of most companies and most respondents believe that their boards are more aware of the views of the workforce as a result of efforts to improve understanding in this area.

Risk and compliance

The vast majority of respondents believe that risk is increasing and the biggest two risks are seen as climate change and cyber risk.  

Awareness of climate change issues has grown considerably since December 2019, with 96% of companies having discussed climate change at least once in the last year. The majority of survey respondents have also published plans to tackle climate change, with plans covering a range of time spans. In addition, 57% of companies had published an ambition to be net zero at the time the survey was taken.

Some 88% of companies believe that their exposure to cyber risk is increasing and 89% are spending more mitigating that risk. Interestingly, artificial intelligence (AI) is not considered to be a major risk despite the potential AI has to disrupt business models. Just 3% of respondents consider it to be a major risk. There has also been a slight fall in the number of boards considering the implications of AI, 52% now compared to 56% in December 2019. Nevertheless, the opportunities and risks associated with AI are being discussed by 52% of boards, which is an improvement on winter 2017 when just 36% of boards had considered the implications of AI.

Corporate governance

Corporate culture has been in the spotlight in recent years and never more so than at the start of the pandemic when there was intense scrutiny around how companies were treating employees, customers, suppliers and local communities. Companies have responded to this scrutiny with all companies having discussed culture at least once during the year, the majority (39%) having discussed culture two or three times.

Executive pay has also been a dominant corporate governance issue in recent years and close attention is likely to be paid to this issue given the emergency measures that many companies have had to turn to survive the pandemic. Any companies that have taken advantage of the furlough scheme or withheld dividend payments are likely to get short shrift if executive pay is deemed excessive.

Remuneration committees are sensitive to issues around executive pay and are factoring these into their discussions about executive remuneration. The impact of the pandemic, the pay ratio between the CEO and average employee, the gender pay gap, pay structures and incentives across the wider workforce and employee share plans are all being factored into the equation. It is worth noting also that the number of companies considering that increasing rules and scrutiny surrounding executive pay is having a detrimental effect on their ability to hire the best candidates for board and senior management positions has increased from 38% in December 2019 to 53%. This is surely not the intention of government or investors and is something that we will watch closely.


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