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UK push for gender diversity on corporate boards stalls, new study shows UK push for gender diversity on corporate boards stalls, new study shows
(about 9 hours later)
Campaigns, reviews and dozens of other initiatives to champion women on boards are failing to achieve notable progress among Britain’s biggest publicly listed companies, according to a new report.Campaigns, reviews and dozens of other initiatives to champion women on boards are failing to achieve notable progress among Britain’s biggest publicly listed companies, according to a new report.
The damning study, released by The Pipeline - a website that trains women for senior roles - shows that the percentage of women on FTSE 350 executive committees was stuck at 16 per cent as of the middle of April, and the number of companies that have no women on their executive committees has actually increased by eight on last year’s level. The damning study, released by The Pipeline – a website that trains women for senior roles – shows that the percentage of women on FTSE 350 executive committees was stuck at 16 per cent as of the middle of April, and the number of companies that have no women on their executive committees has actually increased by eight on last year’s level.
The percentage of FTSE 350 women executives in profit and loss roles – which include chief executive, deputy chief executive, chief finance officer, finance director, managing director and other senior leadership positions – has dropped from 38 per cent to 35 per cent since this time last year.The percentage of FTSE 350 women executives in profit and loss roles – which include chief executive, deputy chief executive, chief finance officer, finance director, managing director and other senior leadership positions – has dropped from 38 per cent to 35 per cent since this time last year.
The findings are particularly striking in the face of major Government pushes over the last decade to balance gender quotas in the highest echelons of corporate Britain.The findings are particularly striking in the face of major Government pushes over the last decade to balance gender quotas in the highest echelons of corporate Britain.
The Government-backed Davies Review, launched in 2010, helped the FTSE 100 reach a milestone of 25 per cent of board positions being filled by women in 2015. A subsequent review, led by Sir Philip Hampton and Dame Helen Alexander, broadened the scope with the aim of one-third of FTSE 350 board members being female by 2020.The Government-backed Davies Review, launched in 2010, helped the FTSE 100 reach a milestone of 25 per cent of board positions being filled by women in 2015. A subsequent review, led by Sir Philip Hampton and Dame Helen Alexander, broadened the scope with the aim of one-third of FTSE 350 board members being female by 2020.
But initial success has so far proved short-lived.But initial success has so far proved short-lived.
The number of females executive committee members in profit and loss roles has flat-lined at 6 per cent over the last year and a total of 60 per cent of women who are on executive committees in the FTSE 350 hold functional roles, such as human resources, marketing and legal or compliance, according to Monday’s report. The number of female executive committee members in profit and loss roles has flat-lined at 6 per cent over the last year and a total of 60 per cent of women who are on executive committees in the FTSE 350 hold functional roles, such as human resources, marketing and legal, or compliance, according to Monday’s report.
Chiming with similar studies published by the likes of consulting group McKinsey and the International Monetary Fund, the research conducted by The Pipeline also shows that FTSE 350 companies with no women on their executive committee perform worse than companies with gender diversity when measured in terms of net profit.Chiming with similar studies published by the likes of consulting group McKinsey and the International Monetary Fund, the research conducted by The Pipeline also shows that FTSE 350 companies with no women on their executive committee perform worse than companies with gender diversity when measured in terms of net profit.
In fact, if all FTSE 350 companies performed at the same level as those with at least 25 per cent females on their executive committee, the impact could be a £5bn gender dividend for all corporates across the UK, the report found. In fact, if all FTSE 350 companies performed at the same level as those with at least 25 per cent of their executive committee being female, the impact could be a £5bn gender dividend for all corporates across the UK, the report found.
“In such turbulent times optimising all our talent, especially one that is seen to have such a correlation on increasing returns, should be a priority for any organisation,” said Donald Brydon, chairman of the London Stock Exchange. “In such turbulent times, optimising all our talent, especially one that is seen to have such a correlation on increasing returns, should be a priority for any organisation,” said Donald Brydon, chairman of the London Stock Exchange.
The study found that once in a role, women tend to promote more women to senior roles than men. As such, one of the steps organisations can take to fix the imbalance sustainably is to ensure it has strong female role models that will “pull through” more junior women. The study found that, once in a role, women tend to promote more women to senior roles than men. As such, one of the steps organisations can take to fix the imbalance sustainably is to ensure it has strong female role models that will “pull through” more junior women.
The Pipeline also recommends companies invest in exceptional leadership development for women and that CEOs take the lead.The Pipeline also recommends companies invest in exceptional leadership development for women and that CEOs take the lead.
“Change only occurs when the CEO owns the issue and communicates its importance through deed and word,” according to the report.“Change only occurs when the CEO owns the issue and communicates its importance through deed and word,” according to the report.
It suggests that companies set targets publicly and reward progress, champion sponsorship programmes and recognise what they describe as an unconscious risk aversion to promoting women into senior roles. It suggests that companies set targets publicly, reward progress, champion sponsorship programmes and recognise what they describe as an unconscious risk aversion to promoting women into senior roles.