(Bloomberg) -- Smaller companies listed on Britain’s FTSE All-Share Index are lagging behind their larger peers when it comes to having diverse representation on their boards, according to a report by Women on Boards UK.

More than half of the companies in the FTSE All-Share Index excluding the top 350 firms had all-male executive leadership teams as of the end of last year, compared with 8% of FTSE 350 companies, the report says.

And although about two-thirds of FTSE 350 companies have met a U.K. government-backed target of 33% female directors on their boards, less than half of the firms in the rest of the FTSE All-Share have achieved this goal.

As for ethnic diversity, only 6.8% of FTSE 350 board members are identified as directors of color, with the figure dropping to just 3% for the rest of the FTSE All-Share, according to the report.

“Progress on board diversity has been painfully slow and recently there has been a creeping sense that what has been achieved is ‘enough’ and no more effort is needed,” said Fiona Hathorn, co-founder and CEO of Women on Boards UK. “More is absolutely needed.”

The report made recommendations including:

  • Scrutiny of the number of individual FTSE All-Share companies reaching board and executive diversity targets, not focusing on overall collated data
  • All listed entities, excluding collective investment companies, report their Gender Pay Gap, on a comply or explain basis
  • FTSE All-Share companies to aim to reach the ‘gold standard’ of 40: 40: 20 gender balance, with 40% women, 40% men and 20% of either, and/or other genders

The report draws on data from company websites or investment trust fact sheets as well as information on the FTSE 350 from the Hampton-Alexander and Parker Reviews.

There are good business reasons for having more women in leadership positions. Large firms in the U.K. whose executive boards are one-third female are 10 times more profitable on average than all-male boards, gender-diversity consultancy The Pipeline said in a study last year.

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