STEM skills shouldn’t hold companies back
10 July 2017
Women Count 2017, the second annual report by the Pipeline, has tracked and analysed the number of women on Executive Committees of FTSE 350 companies.
We found that progress across all industry sectors on gender diversity in senior roles has regressed. We have made no progress as we still only have 16 percent of Executive Committees being women, the same as in 2016. This is further compounded by more companies having no women at all on their Executive committees and no women holding in roles with profit and loss (P&L) responsibility on their Executive Committee than in 2016.
Amongst this depressing picture, we were surprised to find that Electricity, Oil, Gas Steam, Waste and Water were in the top quartile for all three measures we examined (presence of at least 25 percent women on Executive Committees, women executives in P&L roles and women executives on main plc boards).
Given how well this group of companies do, even though it is formed from a low baseline (i.e. disappointing numbers of women in senior roles), we now know it is possible for other sectors who also recruit employees with STEM based skills, such as manufacturing, engineering, construction and mining, to increase gender diversity at the top:
• Electricity, Oil, Gas, Steam, Waste and Water were the highest performer on companies with at least 25 percent females on their Executive Committees
• 45 percent of Electricity, Oil, Gas, Steam, Waste and Water women executives in the FTSE 350 are in P&L roles (placing them in the top quartile)
• Electricity, Oil, Gas, Steam, Waste and Water companies were also the highest performer with women executives on their main plc board
Analysis from the report also showed the demonstrable economic benefits for companies who have women in more senior roles. Net profit margins almost double in companies with at least 25 percent females on their Executive committee compared to those with none.
• If all FTSE 350 companies performed at the same level as those with at least 25 percent females on their Executive Committee, the impact could be a £5bn gender dividend for Corporate UK.
• Companies with a female CEO have, on average, almost twice the number of women on Executive Committees than those run by men and more than three times the number of female executives in P&L roles than those led by men.
• Retail performed better than other industries at appointing women to executive roles. One in two companies have an Executive Committee which is at least 25 percent female (double the number found across the FTSE 350). Again though, this sector like others, can do more to increase gender diversity at the top, as the baseline is low.
Commenting on the findings, Donald Brydon, Chairman of the London Stock Exchange Group said: “Women Count 2017 continues to confirm that FTSE 350 companies with 25 percent or more women on their Executive Committees perform better financially. It is therefore concerning that the percentage of women on Executive Committees has stagnated at 16 percent for the second year. It is clear that companies will have to do more systematically to meet the Government’s target of 33 percent by 2020.”
Lorna Fitzsimons, Co-founder of The Pipeline said: “This report is ringing a very loud alarm bell for business. With agendas dominated by Brexit, the focus on gender diversity at senior levels has been slipping. Women Count shows there is an increase in profit for companies who have over 25 percent women on their Executive Committees. In this post Brexit era can this return be ignored by other companies?
“This is a wake-up call for everyone who supports the Hampton-Alexander recommendation to Government to achieve 33 percent representation of women on FTSE 100 executive committees and their direct reports by 2020. This target is in danger of being missed. Businesses and Government need to renew their drive and be relentless to achieve this goal.
“This is not an equality issue. This is an economic issue and there are signs we are starting to slip back. This report should serve as a call to arms for us all.”