“We don’t need to strengthen the business case for gender diversity; what we need is real change.”
We spoke to Sue Vinnicombe, Professor of Women and Leadership at Cranfield School of Management, about her thoughts on why we’re still talking about gender diversity (or lack of it) in 2022.
Professor Vinnicombe is co-author of the Female FTSE Board Report which analyses the progress of women into the top roles on FTSE 350 companies.
Cranfield has just published the 23rd annual Female FTSE Board Report. What do this year’s figures tell us about gender diversity at the highest ranks of UK business in 2022?
This year’s report is a story of two halves. We have seen a real increase in the number of women who sit on the boards of FTSE companies, and that’s good. On the FTSE 100, we’re at 40%, and the FTSE 250 is on the cusp of that, at 39%.
Going beyond the headline figures, though, we find there is a massive variance between companies. On the FTSE 250, for example, the top company has 80% women on its board, while the bottom has just 11%. Neither of these represent a gender-balanced board.
Delving deeper still, you can see that the vast majority of the increase in women directors comes from non-executive directorships. There has been very, very slow progress of women entering into the executive ranks, which is really disappointing. On the FTSE 100 we’re at 16%, with only nine female CEOs, while the FTSE 250 has been static at 12% for three years running.
So why aren’t we seeing more women executive directors on the boards of major UK companies?
Our special project this year focuses on the executive succession planning process. It seems to us that women are not being spotted early and their talent is not being sufficiently developed, with the result that they are not being seriously considered for these big roles when they come up.
Executive succession planning seems to typically be left to the executives, especially the CEO, which means it may not be carried out as robustly as it needs to be.
We have an extremely tight labour market in the UK right now, so companies need to make sure they have a really diverse, well-developed talent pipeline, and that women are not getting pushed out or choosing to opt out early on in their careers. That way, when it comes time to choose a new CEO, there is a bigger and more balanced pool to choose from.
This lack of diversity at the top has wider implications too, doesn’t it?
Yes, this is not just about putting women into senior roles. What we’re finding is that young women coming into these companies, where they don’t see women at the top, feel like they can’t get there either. They’re also simply not interested in working for companies where they see all these white males around them.
If you’re a young woman looking for a company to work for, especially when you’ve got choice in a tight labour market, if you look up at the top and don’t see anyone who looks like you, you’re going to look somewhere else.
It's the same with customers too. It wasn’t a surprise to me some years ago when Mothercare had significant business problems, because they had no women on their board. When you don’t represent your marketplace among your decision makers, you’re heading for difficulty.
The title of this year’s report is ‘What works?’ - in your view, what is the answer to that question?
I think we need to restructure how the executive succession planning process works. In my view, it should be clearly set out under the remit of the nominations committee, with more stringent oversight from the board.
The role of the CEO is absolutely pivotal. Evidence suggests female CEOs are more likely to promote more women, but we have so few that this becomes very difficult. So we are looking to board chairs to drive this process with the CEO, and to provide the guidance and incentives needed for CEOs to delivery on diversity targets. Board evaluation consultants (who carry out external board reviews) can also help to share best practice and their recommendations for improvements.
We’ve been impressed by the work of The Investment Association, which earlier this year announced it would continue to ‘red top’ companies that didn’t make sufficient progress in this area. As a board chair, it’s quite embarrassing if your business gets marked out in that way to investors.
What would you say to individual managers looking to improve gender diversity in their companies?
Start with your team – do you really know the people in it? To what extent do you engage with each person? Go and talk to the women in your team. Ask them about what they think of your company, and about their career progression. What are their ambitions and how can you support them to achieve them?
When it comes to promotions, look at the data:
- Are you preferencing white men, or men in general, over women?
- Are your talent management processes gender balanced?
- Who gets the highest pay?
- How many women and diverse people are you mentoring in your organisation?
- Do you actually measure any of this?
If you have input into the hiring process, can you encourage less focus on long exhaustive lists of job requirements and performance to date, and more focus on key skills and potential?
A lot of the recommendations you make assume there is a will within these companies to make a change. What if they don’t want to change?
I think board chairs perhaps need to take more responsibility for applying peer-to-peer pressure. For me, diversity works at three levels:
- Cognitively - do I understand the business case?
- Do I engage with this?
- Am I prepared to act to do something about it?
I think you’d be hard pressed to find a director in a FTSE company who doesn’t understand the business case for gender diversity, and diversity in general. It’s not about cognitive data; it’s about how we engage people emotionally.
We know from personal stories that often an executive is motivated to take action in his or her company if they have daughters who are complaining about practices where they work. I think that emotional engagement can come from other chairs saying: “I’m really surprised, John, that you only have two women on your board, or so few women in executive roles.”
When a CEO of another major company says: “Diversity isn’t just important, it’s the imperative today in managing a business.”, that’s got to hit home.
You’ve spent more than two decades looking at the issue of the lack of women in leadership. Looking back, how do you feel about the progress that’s been made? Did you think, when you started, that there would have been more progress by now?
When I look back to 1999 when we started this, and think about where we are today, we have come a long way. I don’t want to diminish the progress that has been made, because it’s been huge, to come from where we were.
In the UK, we made a distinct decision to choose to put in place voluntary targets for appointing women to the board, as opposed to mandatory quotas. At the time, I found it compelling when a senior chairman told me quotas change the numbers, but voluntary targets change the cultures of companies.
Looking back now, do I think that has been the case? In some companies, yes, but maybe they were the ones that were fairly female-friendly to begin with. Because voluntary targets haven’t changed the culture across the board, and we see this played out in the wide variance in the data between those who are leading on this, and those who are refusing to change.
I think the UK needs to think very carefully about what’s next and how we bring up the laggards. We’ve built the business case for gender diversity and we’ve built a strong narrative over many years. We don’t need to strengthen the business case; what we need now is real change.
Professor Sue Vinnicombe CBE has consulted for organisations in over twenty countries including the USA, Ireland, India, the UAE, Philippines, Trinidad, Nigeria, Australia and New Zealand, on how best to attract, retain and develop women executives. Susan is regularly interviewed by the press, on the radio and on television for her expert views on women directors and is a frequent keynote speaker at conferences. Susan is the Founder and Chair of the judges for Women in the City Awards and is a judge for the Sunday Times best NEDs of the year awards. She is Vice Patron of the charity, Working Families. Susan was a member of the Davies Steering Committee from 2010 – 2015 and has been invited onto the Advisory Board of Sir Philip Hampton/Dame Helen Alexander’s Review on the lack of women in the executive pipeline.
Susan was elected to Fellow of the British Academy of Management in 2013. She has been honoured by The International Alliance of Women (TIAW) in 2013 when she was awarded the TIAW World of Difference 100 Award 2013, which recognises those who have made a significant contribution to the economic empowerment of women. In 2016 she was made a Companion of the Chartered Institute of Management and honoured by the International Women’s Forum (IWF) Washington as a woman who has “made a difference in the world. Susan was awarded an OBE for her Services to Diversity in the Queen’s New Year’s Honours List in 2005 and subsequently awarded a CBE for her Services to Gender Equality in the Queen’s Birthday Honours, 2014.