At the end of the last financial year (17 April), the FTSE 100 had more chief executives named Peter in its ranks than female CEOs. That’s the jaw-dropping, headline finding from Women Count 2020: a powerful new report from leading diversity and inclusion consultancy The Pipeline.
The report suggests that efforts to support women into senior roles within the FTSE 350 are slipping backwards, with firms in that elite group marked by a “woeful” lack of female representation at the top.
According to The Pipeline’s data, female-led FTSE 350 firms are crucial for driving gender diversity at senior levels, with such companies currently featuring women in an average of one in three executive committee posts. That falls to an average of one in five within male-led firms. However, this year there are only 13 female CEOs in the FTSE 350: a mere 5% of company leaders in that class.
The report points out: “Executive roles containing a profit and loss (P&L) responsibility are considered to be key for future CEOs – yet in the FTSE 350, 90% of P&L roles on executive committees are held by men and only 10% of these roles are held by women.”
It notes: “A staggering 68% (over two-thirds) of FTSE 350 companies do not have a single female executive committee member in a P&L role, raising serious questions about the desire for positive change in so many businesses and the prospects for women seeking to make it to CEO.”
The story for men, meanwhile, “could hardly be more different, with just 1% of FTSE 350 companies having no men with P&L responsibility on their executive committees.”
The practical upshot of all this is that large companies are leaving money on the table: FTSE 350 firms with more than 33% female membership on their executive committees have a net profit margin over 10 times greater than firms with no women in committee roles. As such, the UK economy has missed out on £47 billion of pre-tax profit. (The Pipeline, 27 July 2020)
In a foreword to the report, former Prime Minister Theresa May writes: “Every single male CEO who looks around his boardroom table to see nine out of ten male faces staring back at him needs to ask himself what he is doing to make his business one which his daughter or granddaughter can get on in.”
She adds: “Very quickly, firms which find themselves on the wrong side of history on this and other social issues will discover that they cannot recruit the talent they need to succeed. This report should be a wake-up call to them.”
What’s going wrong here – and how can it be put right?
The Institute of Leadership & Management’s head of research, policy and standards Kate Cooper says: “This resonates a great deal with our recent coverage of Black Lives Matter – particularly in terms of how some of the world’s biggest brands have sought to align themselves with the movement in their marketing campaigns, even though their boards are overwhelmingly white. On a broader level, so many firms say they have great policies for equality, diversity and inclusion, and when those policies are written down, they all look marvellous.
“In parallel, we have many senior figures saying that staff ought to be promoted on merit – but never for a moment do those people acknowledge, or even understand, the systemic injustices and inequalities that start way before people enter organisations, or get in front of promotional panels. As we can see from The Pipeline’s figures, the current recruiting and talent development scene is not a level playing field.”
Cooper stresses: “If organisations really are serious about diversity; if they want to exemplify better representation on gender, ethnicity and other areas such as disability and sexual orientation – not just in their workforces, but in senior roles and on their boards – then they have to do far more than talk about those things as aspirations.
“Just think back to our recent blog on gender-diversity quotas for boards: why are organisations resisting quotas? If we look at the evidence on the successes of firms with more diverse boards, it simply cannot be the case that the leaders of those organisations secretly think that the best, or only, talent is white and male. So what we can infer from this is that other firms are shackled to an unconscious protection of privilege.”
She adds: “What’s required here are uncomfortable conversations, quotas, positive action – all of which fall under the umbrella heading of Doing Something About It. And not claiming, when you do have all-white, all-male boards, that somehow everyone is there on merit: there are lots of individuals from all sorts of backgrounds who could do a superb job.
“We must recognise that, in organisational life, there is a powerful reverse-impostor syndrome that often prevents us from examining privilege to an extent that will enable us to curb its effects.”