I’m a white, male CEO and as such, I have a responsibility (and desire) to not only maintain gender balance and diversity, but to advance the agenda for inclusion more broadly. Our software could be used by publicly-traded companies who are still struggling to include a single woman or persons of colour on their board or exec teams. My personal view is that women bring so much more to the table - intuition, and a gentler power that men have overlooked - and hugely miscalculated - as ineffective against male ego and testosterone.
I find this most shocking because I’m a father, to a daughter. My wish is for her to grow up in a world where she can just as easily secure a board seat or CEO position - if that’s what she desires. Currently, for a generation of ambitious women, this is not the case. Why this is most surprising is that research and statistics show women-led companies outperform those who are male-led.
According to McKinsey, “companies in the top quartile for gender diversity are 21 percent more likely to have above-average profitability than companies in the bottom quartile.” It's becoming widely acknowledged that women-led or gender-balanced organisations are performing better than those led by male-led teams. Yet, in 2020, 15% of companies in the FTSE 350 have no women executives at all. Over in the U.S., only 5% of CEOs in Fortune 500 companies are women (a running total of 24 women).
"In the FTSE 100, there are more CEOs called Peter than there are women in the top job." - Pipeline, Women Count 2020.
Women-helmed companies aren't just performing; they are ultra-performing.
Diversity and inclusion specialists: The Pipeline report that London-listed companies with no women on their executive committees have a net profit of 1.5%, and those with more than one in three women at that level reach 15.2% net profit margin. That is a huge margin of difference, representing a net profit of £15,000 vs £152,000 on every £1,000,000. The difference represents a loss of £47 million in pre-tax revenue.
Interestingly - and comparatively - throughout the pandemic, women-led countries have seen some of the lowest deaths and infection rates. Coincidence? Germany's Chancellor Angela Merkel was fast to act and praised for her scientific handling of the crisis. Similarly, Jacinda Adern, Prime Minister of New Zealand has been heralded for her humanity, tact and no-BS lockdowns.
In the U.S., only 37 out of the Fortune 500 companies have female CEOs - a meagre 7.4%. Throughout the world, across many geographies, studies have consistently shown that diversity leads to higher share prices, more stable profits and longterm gains across the board. While no exact cause and effect can be identified, we can assume that diversity is undoubtedly having some positive impact here.
Women - do they do it better?
In short - yes. A Forbes report revealed that employees at women-led companies are more optimistic relating to their organisation's strategy and mission, and its ability to communicate on these topics when compared to male-led companies. Additionally, women-led companies appear better at inspiring belief in their products or services, leading to higher overall employee engagement, when compared to male-led companies.
And, employees at women-led companies seem to enjoy more autonomy and are specifically more satisfied with work-from-home policies when compared to male-led companies. Especially important considering the situation that 2020 has thrown at us all.
"Every single male CEO who looks around his boardroom table to see nine out of ten male faces staring back at him needs to ask himself what he is doing to make his business one which his daughter or granddaughter can get on in." - Teresa May, The Women Count 2020, Pipeline
What it means for boardrooms and exec teams
In 2016, the U.K. government's Hampton-Alexander review set a goal for 33% of board seats in the FTSE 350 to be held by women, which was achieved in Feb 2020. As mentioned at the top of this article, 15% of these companies still have no women representatives on their board.
The next goal is for the top 100 FTSE to have an equal gender split throughout all executive roles by the end of 2020. One way of achieving this is for women throughout these companies to be propelled into leadership roles. No doubt the refocus on the pandemic has stifled some of these plans, but the future's looking brighter for ambitious women here in the U.K.
Fighting the good fight
Despite the increases in women in board positions, the missed opportunities are far more significant. A whole generation of talented women are missing out on top posts, and as it will be years until parity is met, they may never get the chance to realise their full potential.
Companies who are succeeding with their gender-balance are usually those full-invested in the ongoing diversification of their business, not just for profitability. These businesses can proudly say to their daughters and granddaughters that they have helped to equalise gender bias. The more women in boardrooms, the more women they can pull up, and women like my daughter can access the futures they deserve.