Many of us are now well aware of how Covid-19 has shaken up and exposed some of the deeply rooted inequalities, injustices and harmful practices that have long pervaded society and business.
Environmental, social, and governance (ESG) concerns are now mainstream, and companies are finally beginning to recognise that addressing these is not a nice to have or a box-ticking exercise – they are instead fundamental pillars of successful, sustainable business that will be fundamental in driving the recovery and shaping future society.
One particularly deep rooted and persistent inequality is that of female representation on company boards. It is an area that has improved in recent years, yet more still needs to be done. Although Covid-19 has disproportionately affected women, it has also given rise to different ways of working that in many cases could encourage women back into the workplace. Either way, an opportunity must be grasped so that we don’t go back to the old ways, and businesses must ensure that the crisis doesn’t wipe out progress that has been made over many years. Indeed, ensuring equal opportunities should be central to the recovery and the new society that emerges.
We have come a long way
Only a decade ago more than 150 FTSE 350 companies had no female directors on their boards. Now, more than one in three of all members of FTSE 350 boards are women.
This represents fantastic progress, and likewise demonstrates the success of the Government-backed Hampton Alexander Review, launched in 2016 to set recommendations for FTSE 350 companies to improve the representation of women on their boards and in leadership positions.
Since then, more women have been able to break through various glass ceilings, and only last month a particularly lofty ceiling was smashed when Citi revealed Jane Fraser would be its next chief executive – the first time a big Wall Street bank will be led by a woman.
Lies, damned lies, and statistics
However, in many ways the metrics we use to measure gender diversity are misleading. There are still more than 100 FTSE 350 boards that have failed to individually meet the 33% target set by the Hampton Alexander Review – and one company still does not have a single woman on its board.
More concerning is the fact that many companies are promoting women to non-executive directorships (NEDs) to meet gender targets, but NEDs spend just 20 to 30 days per year focused on the business. The reality is that the number of women in the most senior jobs has fallen.
Research last autumn showed that only 7% of FTSE 100 companies had a female chief executive officer at the helm (the figure is 6.4% for the S&P 500), while FTSE 250 firms have even fewer female CEOs with just five companies having a woman leading the business. Overall, the UK ranks 16th in the Women in Work 2020 Index, only one place higher than it ranked in 2000.
The path to real, lasting change will happen only when we address the female executive pipeline, and ensure that women are leading businesses for 365 days a year rather than just 30. It is helpful to have female chief executives, but simply focusing on that isn’t the answer. Nor is it simply about putting a few women on a board in non-exec roles.
Much more important is educating companies as to the tangible, commercial benefits of having a better gender balance across the business. The goal must be to shift corporate culture to ensure equal opportunities for women – in the direction of flexible working, for example, or progressive maternity and paternity policies to help level the playing field.
Covid lends even more urgency to the matter
There is evidence as well that Covid-19 has had a disproportionately negative impact on women, with just one reason among many being that women are more likely than men to work in social sectors — such as services industries, retail, tourism, and hospitality — that have been hit hardest by social distancing and mitigation measures.
In late July, the IMF warned that if no action was taken, 30 years of progress for women’s economic opportunities could be erased in a matter of months. It is a warning we should all be taking extremely seriously. Put simply, increasing women’s involvement in the workplace is now more important than it has been for a generation.
I believe that FTSE 350 companies must be even more responsible and careful to ensure that the crisis does not disrupt their plans for embedding gender equality in the workplace. And this isn’t a burden – it makes business sense. Indeed, research has shown that diverse teams are more creative, more productive and make better decisions. By ensuring diversity, businesses will therefore not just be recovering from effects of the pandemic, but coming back even stronger.
At a time when calls for diversity across society as a whole have never been greater, there is still work to do, even despite the progress that has been made over the last decade. The Hampton Alexander Review’s final report, to be published in February 2021, will give more insight into which companies have truly made progress with diversity. The clock is therefore ticking loudly, and I hope that businesses make use of these remaining months and lead by example.