The pandemic has pushed the achievement of gender parity in FTSE 350 companies’ boardrooms back by four years from 2032 to 2036, according to gender diversity consultancy The Pipeline’s Women Count 2021 report.
This is because the rate of growth towards having equal number of men and women on FTSE 350 boards has slowed from 2.7% in 2020 to 2.5% in 2021.
“Times of crisis offer the possibility of major shifts away from established paradigms, but the extreme stresses involved can also drive a regressive response,” writes The Pipeline co-founders Lady Margaret McDonagh and Lorna Fitzsimons in the report’s introduction.
They continued: “The data in Women Count 2021 reveals that FTSE 350 companies have not used the pandemic as a transformative moment for their businesses, instead there has been a reversion to type with companies continuing to fail women.
“Without decisive action the future is looking grim for both women who want to be the next boss and the wider economy.”
In addition, the report found that just 15 FTSE 350 CEOs (5%) are women – examples include GSK’s Emma Walmsley, Whitbread’s Alison Brittain, ITV’s Carolyn McCall and Aviva’s Amanda Blanc.
CFOs positions are similarly non-diverse with only 17% of these positions in the FTSE 350 being held by women.
Although there has been a 5% decline in the number of FTSE 350 companies with all male executive committees – from 15% to 10% – and an 5% improvement in the number of companies with between 25% and 49% women on their executive committees, only 4% of all FTSE 350 companies have reached gender parity on executive committee.
Instead, 70% of all boards never sit down with a senior female executive in a board meeting, 85% of all executives on FTSE 350 main boards are men, and 78% of all executive committee members are men.
This rises by 11% to 89% for profit and loss making roles, plus more than 50% of FTSE 350 companies do not have one women on their executive communities with profit and loss responsibility.
This is a major concern for future gender parity as profit and loss roles, according to Keith Skeoch, chairman of the Investment Association in the report’s foreword, are “a major stepping stone for CEO positions”.
Diverse boards are good for business
These results are shocking, especially given that the Women Count 2021 report found that the business case for diversity in executive leadership and boards is clearer than ever.
The report found that having no women in top jobs in some FTSE 350 companies is causing UK businesses to miss out of £123 billion in pre-tax profit.
FTSE 350 companies with no women on their executive committees have suffered huge losses of 17.5% of their profit margin in 2021; this is down 19% on 2020 figures.
Therefore, “if the companies with no women or less than 25% of women on their executive committee were to achieve the same profit margin as those with more than 25%, there would be an additional £39 billion in pre-tax profit for the UK economy,” states the report.
Therefore, The Pipeline calls on FTSE 350 companies to take action now and focus on gender diversity.
One of the first steps the report recommends taking is putting HR directors on main boards.
The report states: “These positions are crucial for the development of talent within companies, yet despite women accounting for nearly 75% of all these positions within FTSE 350 companies, a mere 3% are appointed to main boards.”
“By taking firm action here, companies will get more diverse inputs to main boards so improving decisions, rapidly improve female representation at senior level, and lay strong foundations for better decisions on leadership today and in the future, all bringing to life the concept of ‘unitary boards”, the report continues.
McDonagh and Fitzsimons wrote: “The country will need every pound it can get to help us recover from the pandemic.
“So there is a huge amount of money available here if we were to increase gender diversity meaningfully. The impact of…failure on the economy is no less serious.”
Skeoch concluded: “We cannot continue to hold talented women back by withholding opportunities to reach the top, and post-pandemic, we cannot continue to keep the economy back by not ensuring our companies have gender-diverse executive committees that will maximize profit.”
“We should not be treating this issue as a special case within our businesses. It is business. And its high time that we move beyond business as usual, to make one of today’s key inequities in society a thing of the past,” added Aviva’s Blanc.