Companies with able women in senior management make more money than those dominated by men. Yet the UK is still lagging behind on initiatives to nurture, retain and promote female talent in business.
In his groundbreaking report Women on Boards, Lord Davies raised the stakes and set a 25 per cent target for female membership of boards by 2015. He stopped short of imposing quotas, but made it clear that, if companies fail to promote talented women, they will be forced to.
Just over a year on from publication of the government-backed report and the number of female directors on FTSE 100 boards has risen significantly to 17.2 per cent, from 12.5 per cent in 2010. But this is still far short of the Davies recommendation.
Reaching his target of 25 per cent by 2015 may seem ambitious, but critics say it is not ambitious enough, particularly when viewed in a global context.
Much of Europe has followed Norway’s lead where, in 2003, legislation was introduced to enforce a 40 per cent quota. Compare this to the United States, where despite some notable exceptions, quotas are not on the agenda. Female representation is much lower and women hold only 12 to 16 per cent of board seats.
Companies with women on the board have outperformed, particularly since the 2008 economic downturn
So it is countries with enforceable quotas that are the most equal – although, even in the most progressive, there may still be little prospect of true equality.
However, this should not detract from progress being made in the UK where boards have ramped up the pace of change to avoid the threat of legislation. Latest figures show that, since March of this year, women have made up 55 per cent of newly appointed FTSE 100 board directors.
But significantly all these appointments have been non-executive roles and, according to Cranfield University, women account for just 6.6 per cent of FTSE 100 executive directorships.
Yet recent research shows that companies with women on the board have outperformed, particularly since the 2008 economic downturn. Shares of major companies with women on their boards outperformed comparable businesses with all-male boards by 26 per cent worldwide over a six-year period, according to the Credit Suisse Research Institute.
Dan Robertson, of the Employers Network for Equality and Inclusion, says the focus should be further down the talent pipeline. “The problem with putting all the emphasis on the board is that it makes the assumption that there is no problem with the journey to the board,” he says.
Forward-thinking companies recognise that the female talent pool is leaking away and a valuable human resource is being wasted at the expense of the business, not to mention the individual.
For whatever reason, women are failing to reach the top jobs on the board and elsewhere in management.
Research suggests that women are less likely to put themselves forward for promotion and that career breaks, notably to raise a family, or flexible working with hours designed for working mothers, are seen as impeding career progression.
Diversity and inclusion programmes within firms are helping to address the issue and initiatives, such as mentoring and networking schemes, are gaining pace. But clearly companies may need a helping hand, either from government or other initiatives, such as the 30% Club, to make real progress.
However, more women are blazing a trail in business as entrepreneurs and starting up their own businesses, possibly encouraged by high-profile TV role models on programmes such as Dragons’ Den.
Successful female entrepreneurs have grown their companies into national, and in some cases, global brands, despite challenges in a male-dominated environment which may restrict funding and investment.