Very few FTSE100 companies pass the “Bechdel” test
The Bechdel test takes its name from the author of a comic strip, Alison Bechdel, who in 1985 produced a cartoon in which two female characters discuss how they evaluate movies before deciding to go to the cinema. To pass the test a film must feature at least two named women who talk to each other about something other than a man.
Admittedly it is relatively superficial as a measure of gender bias, but on the grounds that any detectable bias in the process for determining executive pay is probably worthy of greater understanding we were curious to know if female involvement in determining executive pay passed the test.
Our measure was whether two or more named women talked to each other about something other than the pay of male executive directors (i.e. they discussed the pay of female executive directors).
We applied the test to annual reporting for financial year end 2015 by FTSE 100 companies as at June 2016.
- Just 7 (7%) of FTSE 100 companies passed the “Bechdel” remuneration test. These companies had at least one female executive director whose pay was discussed by at least two female remuneration committee members
- 33 (33%) of the FTSE 100 had at least two female remuneration committee members but failed the “Bechdel” remuneration test due to lack of a female executive director
- 4 of the companies comprising this 33% had three women members on their remuneration committee
- 14 (14%) of FTSE 100 companies had at least one female executive director, but failed the “Bechdel” remuneration test by having either one or zero female remuneration committee members.
- 10 (10%) of FTSE 100 companies failed the “Bechdel” remuneration test as they had no female executive directors and no female remuneration committee members
FTSE 100 Companies that passed the “Bechdel” remuneration test:
|Company||No of female executive directors||No of female RemCo members|
|BRITISH LAND CO PLC||1||2|
|SMITH & NEPHEW PLC||1||2|
At Diageo Lord Davies of Abersoch chairs the remuneration committee. Lord Davies chaired a government backed review of gender bias on UK listed boards which in 2011 recommended that FTSE 100 boards achieve 25% female representation by 2015.
If gender brings a different perspective to the transactions by which executive talent is rewarded it is clear that this perspective is absent from both sides of the remuneration transactions at many of our largest companies.