The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

FTSE 350 financial services firms continue to navigate sluggish growth, geopolitical volatility and ongoing cost pressure, amid a tough regulatory agenda. But firms with weak governance processes could miss opportunities and deliver poor customer outcomes. Building on our 2025 Corporate Governance Review, we explore good practice across the FTSE 350 and how the financial services subset of the FTSE 350 measures up.

Gender diversity is strong, but broader metrics need work 

Financial sector boards perform well on gender diversity. Investment management leads the way with around 7 female NEDs, against an average board size of 9. By comparison, FTSE 350 boards are the same size but have half the number of female NEDs (3.5 on average). Banking also performs well on ethnic diversity, with an average of 3 ethnically diverse NEDs, compared to the FTSE 350 average of 1.5.

However, broader diversity characteristics are underreported, and over 60% of financial services firms don’t disclose beyond gender or ethnicity. This gives a limited view of board composition and can weaken diversity of thought.

Skills gaps persist in data and cyber security

Board-level skills on cyber security or data are rare in the financial sector, despite all firms in our sample naming cyber as a principal risk. These skills are present on just 5% of banking boards, 3% in investment management and none in insurance. That falls short of the FTSE 350 average of 7%.

Limited skills could make it harder to offer strong challenge in these areas, or to support safe and practical adoption of emerging technologies. Without that expertise, boards may lean too heavily on management or external advisers when scrutinising technology decisions. That can also slow investment and leave emerging risks less understood at board level, from model bias to third-party dependencies. 

Culture reporting is strong, but lacks depth

Financial services firms write extensively about culture and values in their annual reports, but the strength of reporting varies. On quality, insurance reports were universally rated strong, against 70% in banking and just 40% in investment management.

However, most firms draw on similar metrics such as employee surveys, whistleblowing data and diversity statistics. Few look at culture audits, customer satisfaction scores or net promoter scores, which would give a fuller picture of culture in practice. Relying on a narrow set of measures makes it harder to test whether stated values match day-to-day behaviour, or where to focus efforts for improvement.

Forward-looking governance is essential

In board evaluations, strategic focus and forward planning topped the list for recommended improvement, flagged by 56% of financial services firms. Succession planning follows at 40%, and gaps in the senior management pipeline at 25%. Combined with a shortfall in board-level skills, this points to a need for more forward-looking succession governance that aligns with emerging risks as the sector evolves.

Corporate governance is a driver of growth 

Post-crisis reform has driven greater governance structures and accountability across the financial services sector. However, there’s still significant room for improvement for financial services FTSE 350 firms to continue to align with, and excel beyond, their cross-sector peers. To close that gap, boards must be ready for the challenges ahead and be prepared to seize new opportunities for growth. 

Read our Corporate Governance in Financial Services report for the complete sub-sector breakdown.