This next report in our series continues to track the number of women on the Executive Committees of the UK’s FTSE 350 companies and shows the resulting economic impact. This year we’ve extended our research to record the number of women executive directors on main plc boards.

Despite an encouraging backdrop on gender diversity in business; including gender pay regulation, sector initiatives such as the Women in Finance Charter and the important, independent review by Helen Alexander and Sir Philip Hampton: there hasn’t been an improvement.

No progress in the number of women on FTSE 350 Executive Committees

The percentage of women on Executive Committees across the FTSE 350 has stayed the same at 16% over the last 12 months and more FTSE 350 companies since 2016 (an increase of 8) have no women on their Executive Committee.

Figure 1: Analysis of Executive Committees in the FTSE 350
Figure 2: Total number of FTSE 350 companies with women on the Executive Committee

Positive correlation between women in senior roles and performance

FTSE 350 companies with no women on their Executive Committee perform the worst of all groups on net profit margin.

Profit margins are almost double in companies with at least 25% females on their Executive Committee compared to those with none.

Figure 3: Net Profit Margin for FTSE 350 companies by women on Executive Committees

“If all the FTSE 350 had at least 25% women on their Executive Committee, the impact could be a £5bn gender dividend for Corporate UK”

Figures reveal the scale of the problem

The percentage of FTSE 350 women executives in profit and loss (P&L) roles has dropped from 38% to 35%.

More companies have no women on their executive committees with P&L roles (147 companies, an increase of 16 since 2016).

Just 6% of Executive Committee members are women in P&L roles.

60% of women on FTSE 350 Executive Committees hold functional roles such as HR, marketing, legal or compliance.

Figure 4: Number of FTSE 350 Executive Committees that have women with P&L roles
Figure 5: Percentage of female executives by job group
CEO
12%
MD
7%
Business
12%
Finance
9%
Function
60%

The number of women executives on main plc boards is low

There are 791 Executive Directors on main plc boards, only 65 of these are women – this means women represent less than 10%.

A staggering 262 companies have no women executives on their Main Board. And the companies that do have women executives on their main plc board, in most cases only have one woman.

Figure 6: Number of FTSE 350 companies with women executives on their Main Plc Board

Women promote women

Our study found that once in role women promote more women to senior roles than men do. FTSE 350 companies with a female CEO have, on average:

  • Almost twice the number of women on their Executive Committee.
  • Over three times the number of female executives in P&L roles on their Executive Committee.
  • More than twice as many female executives on their Main Plc Board.
Figure 7: Average number of women executives on the FTSE 350 Executives Committees by CEO gender
Figure 8: Average number of women executives in P&L roles by gender of leadership
Average # of women
executives in P&L roles
  • Female CEO 1.4
  • Male CEO 0.4

1.5 Women executives across industry

Electricity, Oil, Gas, Steam, Waste and Water stands out as a high performer. The companies in this sector rely on employees with STEM based skills so it is exceptional that they are outperforming other sectors. Wholesale & Retail Trade also was a high performer. This was more expected as a sector which employs a high percentage of women.

Figure 9: Percentage of companies on the FTSE 350 with at least 25% females on their Executive Committees by sector

Our Recommendations

Based on these findings and our experience, we believe the following interventions improve gender diversity

  • Start at the top – begin by increasing the number of women in the most senior roles. They’ll act as great role models to more junior women and will pull them through.
  • Get there faster – invest in exceptional leadership development for women; essential to this is having open and honest conversations as women miss out on clear and direct feedback.
  • CEOs need to lead – change only occurs when the CEO owns the issue and communicates its importance through deed and word.
  • Set targets publicly and reward progress – embedded behaviours do not change in secret.
  • Champion sponsorship – women are over mentored and under sponsored; it is sponsorship that makes the difference.
  • Address the ‘Attainment Trap’ – women are appointed for attainment and men for potential, only when this issue is fully understood do behaviours change.
  • Recognise risk aversion – organisations are unconsciously risk averse to promoting women into senior roles. To resolve this, it needs to be understood and addressed.