Thu 14 Nov 2019
In achieving equal representation, organisations are the masters of their own fates.
Yesterday, 13th November, saw the release of the penultimate report of the Hampton-Alexander Review, a government-backed initiative championing gender-balance in senior leadership.
The ambition of the Review, to make the UK a global leader in representation of women at senior level, is hugely positive. In order to realise this, the Review board have monitored 23,000 leadership roles in the FTSE 350 since 2011, charting the representation of women in executive committees or as their direct reports, and on boards.
The 2016 target of achieving 33% senior female representation by 2020 is especially pertinent as the Review enters its final year. Whilst progress has been charted in senior leadership representation (in the FTSE 100, a change from 27% in 2018 to 28.6% in 2019, and a jump to 28% from 25% for the FTSE 250 in the same period), significant change and progress are still needed for targets to be met by this deadline. A key finding of yesterday’s report demonstrated that half of all board appointments next year will have to be women for this to be achieved. To set this requirement in context, last year two-thirds of all senior leadership appointments in the FTSE 100 and 250 were men.
The outlook for female representation on boards is more positive, with the 33% target highly likely to be met. With the FTSE 250 outperforming the FTSE 100 last year – a change from previous years --it is possible that this target will be met by the overall FTSE 350 by the end of 2020.
An important conclusion of the report is a marked disparity in the motivations of different organisations. Whilst certain firms, such as Burberry and Lloyds Banking Group, are lauded as ‘leading by example’ due to their high percentage of senior female representation and the success of internal policies and changes, 44 firms with all-male executive committees are named in the report. There are further 39 organisations with ‘one and done’ boards – boards with a single female member. Furthermore, the number of women in the highest positions remains remarkably low – within the FTSE 350, there are only 25 women chairs and 14 female CEOs. Evidently, beyond the achievement of the 2020 targets, there is ample room for further progress.
Overall, a key message of both yesterday’s report and the Review in general is that women’s representation is an issue for business, rather than for women. In the opening pages of the report, Dame Vivian Hunt outlines that McKinsey data continues to demonstrate a “significant link between diversity and financial performance”. There is a 15-24% likelihood that companies in the top-quartile for executive team diversity will outperform their bottom-quartile counterparts. Laura Sanderson, from Russell Reynolds Associates, emphasises that over the course of the review “we have learned about how to find, coach and advocate for well qualified women who can be duly appointed on a purely meritocratic basis”, and that the rewards of these efforts are ultimately “more effective leadership of the UK’s companies”.
Considering the report as a whole, it is undeniable the internal decisions of companies – the culture they foster, and the policies that they put in place – are a key differentiator when it comes to gender inclusivity and the ability of women to thrive within the organisation. Our upcoming Supporting Women in the Workplace event seeks to inform managers and HR professionals about the measures they can take to advance gender equality in their workplaces and address the barriers to progress which women face. As the Hampton-Alexander report outlines, when it comes to equal representation and gender diversity, organisations are the masters of their own fate – where there is will, awareness and decisive action, progress will follow.
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