Norbert Van Veldhuizen
Males no longer dominate the boards of directors of companies in the UK’s best-known share index, nor the exchange on which those companies’ shares are traded.
- Market jolt with BT Sale: we highlight the impact of the BT share sale on the FTSE 100, causing a surge in BT shares and windfalls for citizens. and examine the debate on FTSE 100 index inclusion rules and the subsequent changes to mitigate IPO-related volatility.
- Gender evolution in Trading: we reflect on the historical absence of women from the London Stock Exchange floor during the BT share sale and chronicles the transformation since 1973 when female brokers and jobbers were first accepted, contrasting it with the present where women hold 40% of leadership positions at LSEG.
- FTSE 100's Gender Equality Milestone: we celebrates the profound change in business practices, noting that 40% of leadership roles at LSEG are now held by women.
40% female representation on FTSE 100 boards
Last year females took up more than two of every five board seats in the FTSE 100 index for the first time, up from only one in eight board seats in 2011. The FTSE 250 index reached the same threshold.
This meant that FTSE 100 and FTSE 250 businesses had achieved a 40 percent share of women leaders three years ahead of a (voluntary) 2025 target.
Number of FTSE 100 female directorships
Source: Cranfield FTSE Board Reports, 2005-2022
The excitement of 3 December 1984
But even these statistics understate the extent to which financial market and business practices on gender have evolved since the FTSE 100 was launched in 1984.
To see why, let’s go back to a major early event for the FTSE 100, the privatisation of British Telecom (now BT and still an index member) on 3 December that year.
The government was selling half of its shares in BT and around two million UK citizens had applied to buy them.
On the day the shares were listed, early activity was frenetic. Dealers swarmed the BT booth on the London Stock Exchange (LSE) floor to buy the company’s shares (this was still a time when LSE share deals were struck face-to-face between brokers and jobbers).
By the end of 3 December, BT shares had risen by a third from their initial offer price of 130p, a startling first-day performance for a large company.
The excitement surrounding the sale helped spark interest in several more UK privatisations, a key policy of then UK prime minister Margaret Thatcher. By the time she was forced from office in 1990, more than 40 UK state-owned businesses had been sold to the public.
Index effect of the BT sale
As a side-note, the jump in BT shares on 3 December meant an immediate windfall for those lucky UK citizens who had received shares in the public sale.
But it created a headache for those institutional investors who hadn’t received a full allocation. Instead, they had to buy shares in the secondary market at a higher price.
There was a debate about whether BT shares should have been included in the FTSE 100 index at the initial offering price and at full market capitalisation, as they were at the time.
Now, to mitigate the possible volatility surrounding initial public offerings, the FTSE 100 index rules specify that fast entry for large companies occurs after the close of business on the fifth day of trading. We also now only include the ‘free float’ - shares freely available for trading - in the index, rather than the full market capitalisation.
An absence of women
But what stands out from contemporary reports of the BT share sale is the almost complete absence of women from the London Stock Exchange floor.
[In a recent Financial Times article you can see some photos of the all-male crowd at the Exchange on the day BT was privatised—some wearing BT telecom engineers’ hard hats to celebrate the share sale.]
The lack of female presence wasn’t surprising: it was only a decade earlier that women had been allowed into the Exchange building on Threadneedle street at all, unless they were cleaners or secretaries.
The Exchange’s council—its governing body—put the matter to a vote among its members unsuccessfully several times before the LSE finally accepted female brokers and jobbers on March 26, 1973.
Some of the die-hards gave unusual reasons for their opposition to female share dealers.
“One man complained that if his wife came to the viewing gallery and saw him talking to attractive women, he’d be in trouble when he got home,” Durham university professor Ranald Michie wrote in ‘The London Stock Exchange: A History’, published in 1999.
Two of the first female members of the London Stock Exchange trading floor (photographed in March 2023 with LSE CEO Julia Hoggett)
A step change in business practices
Since then, there’s been a step change in business practices.
40 percent of leadership positions at the London Stock Exchange Group (LSEG) are now held by women. This includes both the chief executives of the London Stock Exchange (the capital formation venue of the Group—Julia Hoggett) and FTSE Russell, LSEG’s index business (Fiona Bassett).
Forty years after its launch in 1984, the FTSE 100 continues to fulfil its initial goal: tracking the performance of the largest UK companies and providing a snapshot of equity market sentiment. But nothing has changed so much at the index’s members as the role of women.
Disclaimer
© 2024 London Stock Exchange Group plc and its applicable group undertakings (“LSEG”). LSEG includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE Global Debt Capital Markets Inc. and FTSE Global Debt Capital Markets Limited (together, “FTSE Canada”), (4) FTSE Fixed Income Europe Limited (“FTSE FI Europe”), (5) FTSE Fixed Income LLC (“FTSE FI”), (6) FTSE (Beijing) Consulting Limited (“WOFE”) (7) Refinitiv Benchmark Services (UK) Limited (“RBSL”), (8) Refinitiv Limited (“RL”) and (9) Beyond Ratings S.A.S. (“BR”). All rights reserved.
FTSE Russell® is a trading name of FTSE, Russell, FTSE Canada, FTSE FI, FTSE FI Europe, WOFE, RBSL, RL, and BR. “FTSE®”, “Russell®”, “FTSE Russell®”, “FTSE4Good®”, “ICB®”, “Refinitiv” , “Beyond Ratings®”, “WMR™” , “FR™” and all other trademarks and service marks used herein (whether registered or unregistered) are trademarks and/or service marks owned or licensed by the applicable member of LSEG or their respective licensors and are owned, or used under licence, by FTSE, Russell, FTSE Canada, FTSE FI, FTSE FI Europe, WOFE, RBSL, RL or BR. FTSE International Limited is authorised and regulated by the Financial Conduct Authority as a benchmark administrator. Refinitiv Benchmark Services (UK) Limited is authorised and regulated by the Financial Conduct Authority as a benchmark administrator.
All information is provided for information purposes only. All information and data contained in this publication is obtained by LSEG, from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical inaccuracy as well as other factors, however, such information and data is provided "as is" without warranty of any kind. No member of LSEG nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the accuracy, timeliness, completeness, merchantability of any information or LSEG Products, or of results to be obtained from the use of LSEG products, including but not limited to indices, rates, data and analytics, or the fitness or suitability of the LSEG products for any particular purpose to which they might be put. The user of the information assumes the entire risk of any use it may make or permit to be made of the information.
No responsibility or liability can be accepted by any member of LSEG nor their respective directors, officers, employees, partners or licensors for (a) any loss or damage in whole or in part caused by, resulting from, or relating to any inaccuracy (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analysing, editing, transcribing, transmitting, communicating or delivering any such information or data or from use of this document or links to this document or (b) any direct, indirect, special, consequential or incidental damages whatsoever, even if any member of LSEG is advised in advance of the possibility of such damages, resulting from the use of, or inability to use, such information.
No member of LSEG nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this document should be taken as constituting financial or investment advice. No member of LSEG nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset or whether such investment creates any legal or compliance risks for the investor. A decision to invest in any such asset should not be made in reliance on any information herein. Indices and rates cannot be invested in directly. Inclusion of an asset in an index or rate is not a recommendation to buy, sell or hold that asset nor confirmation that any particular investor may lawfully buy, sell or hold the asset or an index or rate containing the asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index and/or rate returns shown may not represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance presented prior to the index or rate inception date is back-tested performance. Back-tested performance is not actual performance, but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index or rate was officially launched. However, back-tested data may reflect the application of the index or rate methodology with the benefit of hindsight, and the historic calculations of an index or rate may change from month to month based on revisions to the underlying economic data used in the calculation of the index or rate.
This document may contain forward-looking assessments. These are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking assessments are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially. No member of LSEG nor their licensors assume any duty to and do not undertake to update forward-looking assessments.
No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of LSEG. Use and distribution of LSEG data requires a licence from LSEG and/or its licensors.
