Two men and one women working in a boardroom
Few big UK businesses are chaired by women and they are also much less likely to hold top jobs, such as chief executive or chief financial officer © Mariusz Szczawinski/Alamy

Female board members at the UK’s largest companies are paid about 40 per cent less than their male counterparts, according to new data that reveal the gender pay gap is widest in the upper ranks of corporate Britain.

Women took home an average of £104,800 for non-executive roles at FTSE 100 companies last year, compared with an average of £170,400 paid to men. For executive board members, average pay was £2.5m for men and £1.5m for women, according to data from recruiter New Street Consulting Group.

In contrast, women were paid 15.5 per cent less than men in the broader job market, according to 2020 data from the Office for National Statistics.

Claire Carter, a director at New Street Consulting Group, said “great progress has been made in bringing more women on to boards”, but argued that the data showed there was much more to do. “Focusing solely on the percentages of directors that are women is not enough when trying to approach equality,” she said.

The number of female directors has jumped across UK public companies in recent years, with women holding 34.3 per cent of board positions across the FTSE 350 in January this year, up from 21.9 per cent in October 2015.

The jump came after the government-backed Hampton-Alexander review set targets to increase the proportion of female board representation as shareholders and groups such as the 30% Club pushed companies to appoint more women.

Ann Cairns, global chair of the 30% Club, said the pay gap was probably due to women holding fewer of the higher-paying top jobs, such as chair, senior independent director or head of committee roles.

Few big UK companies are chaired by women. Exceptions include Annette Court of insurer Admiral, Cressida Hogg of property investor Landsec and Deanna Oppenheimer of investment supermarket Hargreaves Lansdown.

Women are also much less likely to hold top executive jobs, such as chief executive or chief financial officer.

Deborah Gilshan, an independent adviser on environmental, social and governance issues who previously worked in the asset management industry, said questions needed to be asked about why female directors tended not to be appointed to top board and executive roles.

“Clearly, there is still much to do in terms of both the gender pay gap at the top of companies and in increasing female representation at the most senior and most visible leadership roles of FTSE 100 companies,” she added.

The New Street research, which looked at the pay of nearly 950 directors in 2020 including more than 700 non-executive board members, found that the median pay for male non-executive directors was £103,900 and £85,895 for women.

Male executives were paid a median of £1.9m, while their female counterparts were paid £1.3m.

Cairns, who is also executive vice-chair of Mastercard, urged companies to examine their “significant pay gaps”. “If a man and a woman are doing the same role, it is hard to understand why they would be compensated differently,” she added.

Colin Baines, investment engagement manager at Friends Provident Foundation, which has an investment pot of £33m, said it was “deeply concerning” that “enormous pay gaps” still existed.

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