Since Women Count 2016, gender pay regulation, sector initiatives, such as the Women in Finance Charter, and the important, independent review by Helen Alexander and Sir Philip Hampton bring gender diversity in business to the fore. Despite all this investment of time and money, there has been no improvement on the number of women on executive committees.
No progress in the number of women on executive committees
- More FTSE 350 companies are publishing the gender make-up of their Executive Committee (241 this year versus 221 in 2016)
- As a result, the number of executive members, both male and
female, has increased.
- Disappointingly, the percentage of women on FTSE 350 Executive Committees remains at 16%.
- More FTSE 350 companies since 2016 (an increase of 8) have no women on their ExecutiveCommittee.
Positive correlection between women in senior roles and performance
The Pipeline’s research on net profit margin identified that:
- FTSE 350 companies with no women on their Executive Committee perform the worst of all groups.
- Profit margins are almost double in companies with at least 25% females on their Executive Committee compared to those with none.
- If all FTSE 350 companies performed at the same level as those with at least 25% females on their Executive Committee, the impact could be a £5bn gender dividend for Corporate UK.
As at 14th April 2017, The Pipeline’s research confirms the positive correlation between gender diversity and better business outcomes found in studies by other renowned organisations, such as McKinsey and the IMF.
Figures reveal the scale of the problem
The Pipeline’s research shows that:
- The percentage of FTSE 350 women executives in profit and loss (P&L)roles has dropped from 38% to 35%.
- More companies have no women in executive P&L roles (an increase of 16 since 2016).
- Just 6% of Executive Committee members are
women in P&L roles.
- 60% of women on Executive Committees in
the FTSE 350 hold functional roles, such as HR,
marketing, legal or compliance.
The number of female executives on main PLC boards is low
Women Count 2017 looked at women who sit on FTSE 350 main plc boards as an Executive Director – the count was low:
- There are 791 Executive Directors, only 65 of these were women – this means women represent less than 10%.
Women promote women
The Pipeline study found that once in role women promote more women to senior roles than men. FTSE 350 companies with a female CEO have, on average:
- Almost twice the number of women on their Executive Committee.
- Over three times the number of female executives in P&L roles on their Executive Committee.
- More than twice as many female executives on their main plc board.
The Report’s Recommendations
Based on these findings and experience, the researchers believe the
following seven interventions improve gender diversity:
Start at the top
begin by increasing the number of women in the most senior roles. They act as great role models to more junior women and will pull them through.
Get there faster
invest in exceptional leadership development for women; essential to
this is having open and honest conversations as women miss out on clear and direct feedback
CEOs need to lead
change only occurs when the CEO owns the issue and communicates its
importance through deed and word.
Set targets publicly and reward progress
embedded behaviours do not change in secret.
women are over mentored and under sponsored; it is sponsorship
that makes the difference
Address the ‘Attainment Trap’
men are promoted for potential and women for attainment,
when this is fully understood behaviours change.
Recognise risk aversion
organisations are unconsciously risk averse to promoting women
into senior roles. To resolve this, it needs to be understood and addressed.