Women and Business
What is the problem?
Women are underrepresented in our economic and financial institutions. Women are largely absent from the higher echelons of business, with FTSE 100 directorships being held by women standing at merely 17%. Although considerable efforts have recently been made to change this, progress is stalling. There are now only two women chief executives running UK FTSE 100 companies. This lack of power affects women themselves but also the quality of decision-making in these institutions. At the current rate of change, it will take 70 years to achieve gender-balanced boardrooms in the UK.
Why does it matter?
Including women in positions of power across the corporate world is a question of equality; it simply does not hold that the financial world is run by men. Moreover, there is a strong business case for ensuring women have their fair share of power.
It is a waste of talent and experience to exclude women from board rooms. Moreover, there is a growing body of evidence, largely drawn from business, that women make a positive difference to the quality of decision-making. McKinsey and Catalyst’s respective analyses made a significant contribution to the business case for women leaders. Both reports demonstrated a correlation between women’s representation at board level and the financial performance of companies worldwide, pin-pointing a 30% turning point at which women’s representation has a significant impact across a set of corporate performance indicators. A 2012 study by the Credit Suisse Research Institute also demonstrates the substantial benefits of boardroom diversity for business. According to this study, companies with more female board members had a greater return on equity and higher average growth than companies with no female board members. Ensuring that women are equally represented in the business world is beneficial for women, business and the economy.
What do we want to see happen?
Fawcett believes that we need a radical approach to increase the numbers of women in leadership roles in order to drive a step-change in women’s representation.
The introduction of boardroom quotas in other countries such as Norway has led to significant improvements in business performance, overall responsiveness and corporate governance.
Quotas act are key in supporting female talent into company boardrooms and in achieving workplace equality. Quotas allow companies to set targets for the number of suitably qualified women they wish to appoint and to redress the current gender imbalance that exists.
Fawcett supports the introduction of quotas as a key mechanism in not only increasing the number of women in leadership roles and driving-through a step-change in women’s representation, but in improving overall business performance of UK business and the economy.
There are other things that could increase women’s representation in the corporate world. It is important that companies take action to counter even subtle forms of discrimination by monitoring their gender pay gap (link to equal pay page), monitoring the number of women promoted to powerful positions, embedding mentoring programmes within their organisations to encourage future female talent to rise, and by positively profiling powerful women within their organisations.
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