Gender Diversity in AIM Company Boards: 2025 Report
Click here to download the full report.
Addidat and Indigo: Independent Governance are pleased to present their third annual report on gender diversity in AIM company boards.
In the context of publicity in recent weeks about considerable pushback against equality, diversity and inclusion measures from several major US businesses, this report and its conclusions seem even more critical to highlight. In contrast to the United States, the value placed upon equality, diversity and inclusion in the UK and across Europe remains well supported and a key part of investor and wider stakeholder expectations. Despite this support, this year’s statistics on gender diversity in AIM company boards are disappointing.
What we found
Our first report in 2023 revealed that only 1 in 7 AIM company directors was a woman. By the following year that position had improved to 1 in 6 directors being female and it is therefore somewhat discouraging to note that, in the last year, that ratio has remained stubbornly static.
Other indicators are also concerning. Compared to the analysis presented in 2024, Addidat’s proprietary data now shows there is a higher percentage (38%) of all-male boards, an increase of 1.4% over last year across the AIM market.
Whilst there has been a marginal improvement in the proportion of senior board positions held by women in AIM companies, 72% of such businesses still have no women in the more influential roles of chair, senior independent director, chief executive officer or chief financial officer.
There have been pockets of progress, including within the utilities sector for example, where board gender diversity has continued to outperform and improve more rapidly over both one and two year timeframes compared to other sectors. However, in absolute terms, gender diversity at board level remains relatively low at 16%. Across the AIM market as a whole, only 11% of firms would meet the 40% women on boards threshold expected of FTSE350 companies.
The importance of diversity
The importance of establishing diverse boards is often justified by reference to the better outcomes that their companies may achieve. We wholeheartedly support the idea that boards comprised of diverse individuals, with different backgrounds and perspectives to complement the knowledge and skills they bring to the table, are more likely to avoid the echo-chamber traps that can be a risk for directors who approach decision making from a starting point informed by similar views.
We do not dismiss the concept that diverse boards may therefore be more likely to make better decisions that deliver superior outcomes in the longer term. However, we reject the notion that the need for diversity should be justified on the basis of this potential outperformance. Female directors, and others with diverse characteristics, should not have to be workplace Olympians – faster, higher, stronger – compared to their male peers to earn a seat at the same table as them. That is not how a meritocracy, in which a level playing field leads to the appointment of the best candidate from a wide pool, should operate. The current imbalance in the gender composition of AIM company boards indicates that talented women are still facing significant barriers to appointment. Their absence from the boardroom will not only impact director decision making and culture, it could also discourage the next generation pipeline.
Finding a way forward
The lack of formal targets in relation to board diversity, and the flexible approach to board diversity set out in the QCA Corporate Governance Code which is adopted by many AIM companies, are likely to be contributing to the lacklustre pace of change seen in AIM companies. The potential benefits of high growth AIM companies being steered by more diverse boards are sadly being lost. Particularly for those AIM companies which are smaller, solutions that avoid burdensome additional regulation and which respect the flexibility of the AIM market would be significantly more preferable than a more heavy-handed approach. We hope that by shining a light on the reality of diversity challenges within AIM listed company boards, we can contribute to creating the change that we want to see.
We remain fully committed to extending the diversity debate beyond the largest listed and private companies which are the focus of the successful FTSE Women Leaders’ Review. We also remain conscious of the need to broaden diversity ambitions beyond those relating to gender and accordingly see our current gender-based reporting as just the starting point. By raising awareness of the current poor state of AIM company board diversity through publication of this annual report and its previous versions, we hope to prompt thoughtful debate, meaningful action and positive change in smaller listed companies.
People we need to thank
We are particularly grateful to Lisa Montague, Chief Executive Officer of Sanderson Design Group plc, which has a gender balanced board and, not only has a female CEO, but also a female chair. Lisa has kindly allowed us to document some of her experiences as a business leader and director within this report and will also be joining us at this report’s launch event, ready to share her insights and answer your questions. We also very much appreciate the contribution which Jonathan Neale, Non-executive Chair of Filtronic plc, will be making to those discussions as part of our launch event panel.
We also extend our thanks to The Chartered Governance Institute of UK & Ireland (CGIUKI) for kindly supporting this year’s report launch event.
To discuss further, please get in touch with the team.
Never miss an update from Addidat. Subscribe to our monthly Newsletter by following this link.
