The recently-published CIPD Executive Pay: 2018 Review of FTSE 100 Executive Pay Packages showed some positive progress, with 30% of FTSE 100 board positions now held by women. However, this statistic masks that the number of women in ‘executive’ roles has failed to keep up. There are just 24 female executive directors in the FTSE 100 compared with 195 male executives. Seventy-eight of the FTSE 100 have no female executive directors at all, and there are more FTSE 100 CEOs named Steve or Stephen than there are who are women. With only seven female CEOs in place, at the current rate of progress it will be 2060 before we reach parity.
I can’t see why half of FTSE 100 CEOs couldn’t be women, given that slightly over half of the UK population are. The fact we have women successfully doing these jobs already proves it is not that women can’t. So the question is why more aren’t.
Grant Thornton’s 2015 Women in business: the value of diversity report found that companies with diverse executive boards outperform peers run by all-male boards. It concluded that publicly-traded companies in the UK with all-male boards are missing out on £49 billion of investment returns. An increasing number of studies show that more women at the top of companies doesn’t just improve decision-making, risk management and contribute to greater employee engagement, but also has a net positive effect on the bottom line.
So what can we do to improve the number of women at the top of the FTSE 100 and across the business world? Being more accepting that women can have children without tanking their careers is a start. Given the relatively short period many women take off to have children, compared to the duration of their career, this can’t explain the lack of women at the top alone. There are clearly other factors at play.
Historical, social and cultural ‘norms’ are definitely up there. Birute Regine, an American developmental psychologist, describes the phenomenon of 'gender schemas' or unconscious culturally-bound assumptions about men and women. Cultural biases consistently overrate men and underrate women, with self-assessment studies showing that men and women do the same to themselves. To move forward we need to assess men and women the same; not on who they are but on what they do and the impact they have.
Other than removing outdated barriers and addressing our own social conditioning and biases, we can also recognise that effective leadership today is different from what worked even just 20 years ago. With more volatility, uncertainty, complexity and ambiguity faced by business and the wider world than ever before, a new breed of leadership is needed and women are just as well-placed to provide it.
One of the benefits of being chair of Real World Group is the opportunity it has given me to gain greater insight into extensive leadership research. Research that over the years has included numerous studies about what delivers truly effective leadership. These studies have not only been some of the largest, but also the most inclusive in terms of the diversity of the leaders studied. The leadership model created as a result, ‘Engaging Leadership’, was ahead of its time when first proposed in 2001.
If we assess a leader’s ability and skills against a traditional model of leadership those who do not fit the historical template will always be disadvantaged. Moreover they will not be accurately assessed against what is needed in the current landscape, resulting in leadership roles potentially being occupied by the wrong people. Resourcefulness, resilience, mental agility, persuasive communication, authenticity, creative solutions, partnership working and stakeholder engagement. These are increasingly the skills today’s leaders need, and these are all areas in which women can excel.
So let’s stop judging women and diverse leaders against outdated leadership criteria that no longer work in today’s world. Both men and women need to update their mindsets to the reality of where we are today, and the equal role and ability women have in truly effective leadership.
Rachel Hannan is chair of Real World Group
