Women Count 2020

Companies with women in senior leadership roles are more profitable. They are better innovators. They are more respected in their fields.” So says the former Prime Minister of the UK, the Rt Hon Theresa May MP, in her foreword to the fascinating new report, Women Count 2020 (the report).

The report was commissioned by The Pipeline, a diversity business established in 2012 to enable organisations to achieve their diversity goals through outstanding diagnostic tools, excellent leadership programmes and bespoke consultancy. If part of your role involves improving diversity and inclusion across your organisation, this report is a must read.

The Pipeline’s analysis of the executive committees and main boards of FTSE 350 companies (as at 21 April 2020) has produced data which shows how little progress has been made in the five years since the organisation started its annual tracking.  The report’s findings show that, more than ever, companies with diverse leaderships perform better and have higher profit margins, indicating that they are making better commercial decisions than companies without diverse leadership.

There are four key themes arising out of the report.

Firstly, lost profits. The report concludes that FTSE 350 companies which have executive committees with female membership of more than 33% have a net profit margin more than 10 times greater than those companies with no women at this level.  The report reasons that some companies are simply failing to look beyond outdated employment and promotion practices and that the direct result of this is poorer business performance.

Secondly, an abysmal number of women in leadership levels. In 2020, there are just 13 female CEOs of FTSE 350 companies. That is a mere 5% of company leaders. The report finds that the lack of female company leaders is extremely worrying. Needless to say, in other powerful roles, there is also a distinct lack of women. A Chief Financial Officer (CFO) is a critical role in business. The CFO significantly influences company performance and usually sits on company main boards. The report found that, in the FTSE 350, 84% of CFOs are men and just 16% are women. As part of its conclusion, the report states “one of the crucial arenas for change is in the leadership of our companies”.

Thirdly, the report finds that there may still be a lack of desire for positive change in many businesses and the prospects for women seeking to make it to CEO. There is a hierarchy of positions on executive committees and those jobs holding a profit and loss (P&L) responsibility are more highly valued. The proportion of women in P&L roles in FTSE 350 companies’ executive committees is worryingly low (10%) when considering succession planning.

Finally, the pace of progress is simply too slow. If this year’s rate of growth were to be maintained, it would be 2032 before there was a 50-50 split between women and men on executive committees of FTSE 350 companies. The report concludes with a call to arms for British businesses to lead a “national renaissance that harnesses the best of everyone, regardless of gender. Then we will emerge from this crisis together, stronger and more united than ever”. Hear, hear.

Access the full report here.

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Claire McKee

About Claire McKee

Claire is an associate in the People, Reward and Mobility practice. Whilst advising employers and employees on a wide range of employment issues, Claire focuses on advising clients on contentious employment, discrimination and equal pay matters. She appears before the Employment Tribunal in Scotland and England on a regular basis.

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