A new report released today reveals that fair senior female representation in FTSE 350 firms will be crucial for the UK’s financial recovery following COVID-19.
WHY FTSE 350 firms need senior female representation
Over the pandemic period, companies with greater gender diversity at the top achieved higher profits while companies without female executives suffered bigger financial losses, found the new report by leading diversity business The Pipeline.
Their ‘Women Count 2021’ report revealed that companies with women making up at least 50% of the executive committee secured a profit margin of 21.2%. In contrast, FTSE 350 companies without women on their executive committees experienced an average fall in profits of 17.5%. These findings are enough to suggest that companies that fail to pursue senior-level gender diversity will struggle to bounce back quickly from the pandemic.
This is the only report in the UK that looks into the number of women on executive committees in the FTSE 350. They predict that gender parity for women holding executive positions won’t happen until 2036, a regression of four years from last year’s assessment. This is because UK businesses fail to make progress on gender diversity at the top of organisations, with women accounting for just 5% of CEO positions in FTSE 350 firms, which is a small rise from last year’s 4%.
The report’s authors believe the pandemic provided an opportunity to push forward for gender inclusion, but this didn’t happen, meaning “the prospect for women seeking advancement to the senior echelons of FTSE 350 companies looks as desolate as ever.”
Lack of gender equity at high levels within these firms is costing businesses and the economy; the research found that if all FTSE 350 companies with less than 33% of women on their executive committees were to achieve the same profit margin as those with 33% and more, there would be an additional £123 billion in pre-tax profit for the UK economy, which is a vital addition considering the detrimental impact of COVID-19.
The business world is at a crossroads, where this could be the last time for firms to actively achieve gender parity in leadership roles before the government implements regulations.
Lorna Fitzsimons, Co-founder of The Pipeline, said: “The last year has been dominated by COVID-19, which has disrupted so much. Times of crisis are moments that offer the possibility of major shifts away from established paradigms, but the extreme stresses involved can also drive a regressive response. 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.”
Margaret McDonagh, Co-founder of The Pipeline, added: “Women Count 2021 shows that without decisive action, the future is looking grim for both women who want to be the next boss and the wider economy. Evidence of this lies in the incredibly low level of women who are in executive committee roles with profit and loss responsibility, which are critical pre-CEO positions, a situation that remains largely unchanged in the last 12 months.”
To read the report in full, please click here.