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Women in leadership

Author: ICAEW Insights

Published: 10 Mar 2022

Female representation at board level across the UK’s largest companies is on the up, but women are still the exception rather than the rule when it comes to bagging executive roles such as the CFO.

Despite government claims of a sea change in attitudes towards female representation at senior levels in business, women holding executive roles including CFO positions across the FTSE 350 remain all too rare, experts warn.

The UK has climbed three places to second place in an international ranking for women’s representation on boards at FTSE 100 level, with nearly 40% of positions now held by women, compared with just 12.5% 10 years ago.

The data is published as part of the FTSE Women Leaders Review, which monitors representation of women in 24,000 positions on FTSE 350 boards. The UK progressed from fifth to second in international rankings at FTSE 100 level, with women in 39.1% of board roles in 2021, compared with 36.8% in the FTSE 250 and 37.6% in the FTSE 350.

The number of women in Chair roles across the FTSE 350 rose to 48, up from 39 in 2020, and the number of ‘one and done’ boards has reduced to just six this year, as British businesses take action to diversify their boardrooms, the report says.

The government says the headline results demonstrate a major shift in attitudes to getting women leaders to the top table of business in the UK, and highlight the success of the UK’s voluntary, business-led approach to setting targets for getting more women on boards.

However, the findings shine a light on areas where there is still more to do. For example, only one in three leadership roles and around 25% of all executive committee job titles are held by women. Equally, there are still many companies yet to hit the former 33% target set by the Hampton Alexander Review.

Minister for Women and Equalities, Liz Truss, said the government would soon be suggesting a range of measures to advance equality for women at work, increasing opportunity, and tackling the issues that are holding women back. In anticipation, the FTSE Women Leaders Review sets out its own recommendations. They include increasing the voluntary target for FTSE 350 boards and for leadership teams to a minimum of 40% women’s representation by the end of 2025.

The review also recommends that FTSE 350 companies should have at least one woman in the chair or senior independent director (SID) role on the board and/or one woman in the chief executive officer or finance director role by the end of 2025. It also calls for the scope of the FTSE Women Leaders Review to be extended beyond FTSE 350 companies to include the largest 50 private companies in the UK by sales.

Denise Wilson, Chief Executive, FTSE Women Leaders Review, said there was no shortage of experienced, capable women, ambitious for themselves and their company across all sectors of business today. “So while we continue to build on progress for women on boards, we need to firmly shift focus in this next phase to women in leadership roles at the top of the organisation.”

Bina Mehta, Chair of KPMG in the UK, said: “Forty is the new 30 when it comes to women’s representation targets on boards and in senior leadership roles. But beyond the numbers, it’s just as important to ensure that the overflowing pipeline of well-qualified and capable women translates into more women chairs, SIDs, CEOs and CFOs.”

It’s a sentiment shared by Sue Vinnicombe, Professor of Women and Leadership Strategy at Cranfield School of Management. “There are many experienced women NEDs now and they are often quoted as being very skilled at facilitating, negotiating and supporting, so there is no excuse why there are not more women in SID roles,” Vinnicombe says. “There are also a number of women NEDs who have held senior roles on a number of corporate boards now so again why aren’t there more women Chairs?”

Vinnicombe said companies needed to do a better job of talent management and succession planning to ensure more women were developed to take on key executive roles including CEO and CFO. Given the huge pipeline of strong female candidates in finance and accountancy, Vinnicombe said the fact that just 61 of the FTSE 350 CFOs are women was truly appalling and cause for urgent attention. 

Meanwhile, research conducted by Deloitte published earlier in February warns that gender diversity in UK boardrooms is lagging behind their European counterparts with only 30.1% of company seats held by women in the UK. Women in the boardroom: A global perspective found that women leaders on the continent boast the largest share of global boardroom seats, led by France (43.2%), Norway (42.4%) and Italy (36.6%).

The Deloitte report, published in collaboration with the 30% Club, warns that it will take until 2045 for the world to reach near gender parity, although the UK could reach that milestone much sooner – within the next five years – if the progress we’ve seen in the last two years continues at the same pace.

The average age of women on boards in the UK is 56.8 years, the Deloitte study finds, while the average age for a woman chair is 60.1 – more than four years younger than their male counterparts (64.3). The report also found the average tenure for women on boards in the UK decreased from 4.1 years to 3.6 years since the last report published in 2019.

Sharon Thorne, Deloitte Global Board Chair, said the pandemic had dented efforts to achieve equality, “making it even more important to take concrete actions to ensure inclusion within and beyond the boardroom including gender, ethnic and racial diversity among other characteristics”. Increasing the number of women on boards is only the first step on a larger journey, Thorne added.

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