Organisations have woken up to the business and societal benefits of greater female representation at board and leadership level, but there are still some difficult attitudes and biases that prevent gender balance. Denise Wilson, chief executive of the FTSE Women Leaders Review, tells Ashleigh Webber about the progress made and what needs to happen next.
A decade ago, the boards of UK’s biggest publicly-listed companies mostly comprised a homogenous group – white, older men. But there has since been a sea-change in the composition of leadership teams among the FTSE 350, and women, as well as more people from ethnic minority backgrounds and those with disabilities, are taking a greater proportion of top roles.
According to the latest annual report of the FTSE Women Leaders Review, which is continuing the work of the Hampton-Alexander and Davies reviews, women held more that 39% of board positions at FTSE 100 firms in 2021, compared with 12.5% a decade ago.
Yet, barriers to gender parity remain, and the review is stepping up its efforts to challenge ingrained biases and promote change across some of the UK’s major employers.
This year it announced an extension of the review’s scope to include the top 50 private companies by turnover and a target of 40% gender balance (either 40% women or 40% men) at board and executive leadership level by 2025.
‘No place for women in my boardroom’
Chief executive Denise Wilson is proud of what the review and businesses have achieved since 2011, but says the journey hasn’t been easy.
“To begin with, the attitude of some companies was ‘there is no place for women in my boardroom’, ‘these issues are very complicated’, ‘they don’t have the skills’ and ‘my peers wouldn’t accept it’, and so on,” she tells Personnel Today.
“The process was very much like peeling back the layers of the onion. At the beginning there were some very obvious objectors to deal with who brought their own prejudices and expectations of women. That has gradually fallen away as time has gone by and women in leadership has become the norm.”
However, some sexist views remain. Just this month, Aviva Group CEO Amanda Blanc revealed she and other female board members faced a barrage of inappropriate comments at the firm’s AGM, including an investor who suggested she was “not the man for the job”.
“What we’re left with now is the core and the really quite difficult issues to deal with,” says Wilson. “Largely those are in the cultural space and bias in the selection process, but there are still unhelpful myths around women and gender stereotyping. There are very strong collegiate networks for men, and women for one reason or another don’t quite seem to form these groups in the same way.”
Action not just words
Wilson says many organisations “talk a good talk” around gender diversity and inclusion, but offer very little in the way of concrete actions that make a difference. According to a report from management consultancy Agility in Mind, almost half of FTSE 100 firms have only one or fewer positive DEI initiatives, despite 99% having an “inclusive” mission statement.
At the beginning there were some very obvious objectors to deal with who brought their own prejudices and expectations of women.”
This is reflected in some of the listed companies that scrambled to meet the Hampton-Alexander Review target of 33% female representation on boards shortly before the 2020 deadline.
“We’ve got a lot of organisations doing the bare minimum,” says Wilson. “If we give them a target every five years, they will meet it three weeks before the deadline. That is not the approach we want obviously. Ideally, we’d want them to reach the target under their own steam and ambition, not because they’re about to fail.”
There are still around 70 FTSE 350 firms trailing below that 33% target on their boards and “well over” 150 that don’t have 33% women in their leadership teams.
Benefits of diversity
The context in which British businesses operate has changed over the past decade, and Wilson says those who do not act on diversity stand to lose investment, access to the best talent, and customer loyalty.
“Also, [gender diversity at leadership level] is an indicator of innovation and lots of other things in a company; the style of leadership, the maturity of that leadership, which are important in terms of recruitment,” Wilson adds.
She says the organisations that have treated gender diversity in leadership as a core business issue have more robust conversations around the board table, make better decisions, have a variety of inputs from different perspectives, and have created role models that junior talent can look up to.
“Traditionally homogenous sectors, such as construction and mining, are seeing 10-15% improvements in safety, in financial performance, and also in terms of employee feedback. When more views are represented it fuels greater innovation and employee satisfaction,” she says.
Not just an HR issue
Diversity needs to be seen by the c-suite and board as a core business issue Wilson says, rather than a “problem” that HR needs to sort out. It needs to be integrated into the company’s strategy.
“HR directors have to be encouraging their CEOs to treat this like any other issue. They need to have proper data, they need to have targets that are monitored regularly and robustly.”
She advises employers to focus on a few targeted initiatives that they think will have the greatest impact, rather than a dozen that are given minimal attention or investment.
“This is hard work. This is not something that can be sorted in a few years. Gender diversity programmes need a proper budget and resourcing allocated to them,” she says. “HR leaders need to be lifting the lid on all of the people processes in the organisation – from pay, to evaluation, bonuses, promotion, recruitment, and who features in the company magazine.”
But the most important thing for HR to focus on is encouraging CEOs and other leaders to speak out about the importance of gender parity and what the organisation is doing to achieve it.
“[The leader’s] voice matters more than anybody else. It’s the passion of the leader that has often driven progress in organisations because they don’t let the issue go.”
It’s the passion of the leader that has often driven progress in organisations because they don’t let the issue go.”
Gender pay gaps need consequences
Businesses should go beyond minimum statutory requirements. Gender pay gap reporting, for example, is not enough to move the dial.
“Gender pay gap reporting can be hugely helpful, because anything that encourages the publication of data and some scrutiny is very helpful. That said, I think there are a few shortcomings that are starting to manifest themselves,” says Wilson.
“When you’ve 12-13,000 companies reporting, it’s quite difficult to see who’s going well and who isn’t. With 350 companies [in the FTSE index] and every one named and ranked, it’s obvious.
“Organisations are tending to put out their numbers with the same narrative as the year before. That’s not very helpful either. Right now we have a relatively benign approach to gender pay gap reporting and I think the time maybe has come now for there to be some consequences.”
Asked about why the FTSE Women Leaders Review has been successful in increasing the female voice in the FTSE 350, Wilson says she believes its voluntary approach and the publication of each company’s progress in the public domain, have been key.
“When we started this in 2011 there were a few European countries that decided to adopt legislation, such as quota regimes, fines and penalties, as well as really quite penal measures – delisting, ousting chairs. We chose a really quite encouraging, voluntary approach which allowed chairs to really look at the calibre women out there and select women that would suit their boards,” she says.
“A decade later, we’ve achieved the same progress as a country like France, which introduced quotas and penalties, only we’ve done it in our own way that’s in step with the British business approach – comply or explain.”
Firms have just three years left to achieve a minimum 40% female representation in FTSE 350 leadership. With just 15% of the FTSE 100 and 12% of the FTSE 250 having already achieved this milestone, organisations’ journey towards gender balance continues.