Progress stagnates on gender diversity in senior roles at FTSE 350 companies

by • News, Workplace

Achieving the government’s target of women making up a third of FTSE 350 board members by 2020 is beginning to look increasingly unlikely,according to executive training organisation The Pipeline’s annual Women Count report. It claims that there has been no progress over the last year in the number of women on executive committees and that 16 companies no longer have any women in ‘profit and loss roles’ which brings the total to 147, while eight companies no longer have any women on the committees at all. Yet the positive value for having greater gender diversity with women in executive positions is unquestionable, according to the authors.

Women Count 2018 found that in the last three years there has been no progress on gender diversity in senior roles in the FTSE 350 – and by some measures, it is going backwards. Women Count is the third annual report by The Pipeline, that tracks and analyses the number of women on Executive Committees of FTSE 350 companies. The report claims that:

  • The ratio of women on Executive Committees of FTSE 350 companies has stayed the same at only 16 percent since the first report three years ago.
  • Nearly a quarter of FTSE 350 companies have no women on their executive committees.
  • 95 percent of all P&L roles on Executive Committees are held by men and just 5 percent by women, a decrease on last year – most women instead perform ‘functional’ roles such as HR, marketing, legal or compliance.
  • 63 percent of companies have no women in P&L roles.
  • 95 percent of Chairs on Boards are men with only 5 percent being women.
  • The percentage of women executives on main boards has flatlined at 8 percent between 2017 and 2018. This means 92 percent are still held by men.

According to the report, representation on Executive Committees, unlike representation on Boards, is the best measure of gender equality in the FTSE 350 because executives have power in the running of a company.

Analysis from the report also claims to show the demonstrable economic benefits for companies who have women in more senior roles.

  • There is a £13bn gender dividend on offer for UK plc, if all FTSE 350 companies performed at the same level as those with women on their executive committees.
  • FTSE 350 companies with no women on their executive committee only achieve an average 8.9 percent net profit margin. Where there are at least 25 percent women on executive committees, average net profit margins soar by 5 percent, to 13.9 percent.

The report also claims that female CEOs are instrumental in recruiting more women to senior positions:

  • Female CEOs have more than twice the number of women on their executive committees than male CEOs
  • Female CEOs have four times the number of women executives in P&L roles on their executive committees compared to male-led companies.
  • Only 4 percent of FTSE 350 companies have female CEOs, yet within a year these female CEOs have increased by 10 percent the average number of women executive committee members.