Tara Cemlyn-Jones is a woman on a mission. The former investment banker wants to help almost triple the number of female CEOs in the UK’s largest companies – and quickly.
A quarter of a century ago, Dame Marjorie Scardino was appointed CEO of media company Pearson, making her the first female CEO in the FTSE 100. Today, there are nine women leading the country’s 100 biggest plcs. Cemlyn-Jones wants that total to be 25 by 2025.
She’s not alone. Under the umbrella of the 25x25 initiative, a not-for-profit enterprise that she founded in March 2020, she has the support of a dozen blue-chip businesses, including GSK, NatWest and Unilever.
Cemlyn-Jones argues that diversity among CEOs, as the “public face” of business, matters immensely in setting expectations and shaping aspirations. If corporate leaders look “exclusively male – or white or heterosexual or non-disabled – you’re not going to attract the broadest range of talent”, she says.
The 25x25 campaign is as much about making the business case for change as it is about ensuring fairness. Studies have consistently found that diversity in leadership teams has a positive effect on long-term profitability. Research in October 2021 by US financial services firm Morningstar, for instance, found that the stocks of UK and North American firms with an equal gender split at board level achieved a 7.52% return on investment over three years, compared with an average of 2.09%.
Improving diversity and reducing groupthink
The reason it pays to have more female CEOs isn’t that women have a different set of skills purely because of their gender, according to Cemlyn-Jones, who is “very loath” to suggest that women or men are anything but the same when it comes to their leadership qualities. Rather, the advantage of having more female CEOs concerns the greater perspective this offers.
Gender aside, the more varied the top team is, the broader its range of experience will be, which reduces the likelihood of groupthink. (The fact that the FTSE 100 currently has no Black CEOs is another clear sign of the continuing lack of diversity on blue-chip boards and the risk this poses to the quality of their strategic decision-making.)
Cemlyn-Jones adds that women’s historically high representation in the HR profession is also pertinent. With the UK’s economy becoming ever more service-oriented, the need for CEOs to be masters of people management is increasing quickly, she argues. Given her recent experience of working in the fast-growing fintech industry, she thinks this factor is something that big plcs, which have traditionally appointed leaders with strong financial skills, have been slow to grasp.
“When you compare FTSE firms against tech companies, you suddenly realise that the skills required of a CEO have changed completely,” she says.
The appointment of Unilever’s former head of human resources, Leena Nair, as CEO of fashion house Chanel in December suggests that things might at last be changing. If so, female HR directors could be well placed to benefit.
Nonetheless, meaningful change will not happen without a push. Before its official launch in November 2021, 25x25 conducted extensive research among business leaders. This found that entrenched cultural biases about who is – and isn’t – suited to the top job still run deep. Such attitudes persist despite successive government-led drives – for instance, the Davies review in 2010 and the Hampton-Alexander review in 2016 – to improve the situation.
“There’s been quite a lot of work on gender representation in the boardroom, but that hasn’t moved the dial much in terms of CEO numbers,” Cemlyn-Jones says.
Providing a path to the top
This is mostly because the responsibilities of the role are very specific, as are the routes into it. Just because boards feature more women, this doesn’t automatically translate into having more female CEOs. It’s why 25x25 has a strong focus on the concept of ‘pathways’ into the top job – in other words, how firms pick, prepare and promote high-potential candidates from within or recruit them externally.
Some improvements to the selection process would be relatively simple to make. For instance, having an independent observer sit in on job interviews could alert the company to any unintentional biases, Cemlyn-Jones suggests.
But, in addition to any quick fixes, firms must ask hard questions of their talent development and promotion processes, she argues. Consider an oil major or a global engineering company, for instance. The CEOs of such firms tend to have gained broad operational experience in several areas of the business, which is fine on paper. Yet is the expectation on candidates to up sticks and move regularly from posting to posting really fair to women, given its implications for family life and the insecurity of certain overseas roles?
The 25x25 initiative has so far resisted proposing a set framework for companies to follow. Instead, its main request of them is to “continue to question traditional models, which may not be appropriate for the CEO of the future”, says Cemlyn-Jones, who adds that target-setting is also vital. Hard objectives can better oil the wheels of institutions and make change more likely. Putting it more bluntly, she says: “If it’s left to chance, we know nothing happens.”
With this in mind, participating firms are encouraged to set clear targets for gender balance across the top two to three levels of management.
“It’s very easy for people to say: ‘Oh, I looked for a good female candidate and I didn’t find any,’” she notes. “If a senior person then tells them: ‘Look again, because this is important,’ they will look again and they will find one. It happens every time.”
Another 25x25 priority is for existing business leaders to start championing the cause of greater female representation more vocally. At present, a “handful of companies” are pushing this agenda hard, she says. Welcome as this is, if more don’t follow suit, “we will simply end up with the same problem”.
Cemlyn-Jones explains: “If a CEO steps up and says: ‘This is important to me,’ what we find is that proper work then gets done.”
It’s clear that several male CEOs in the FTSE 100 must become prominent cheerleaders for the campaign if it’s to succeed. Having signed up as ‘lead ambassadors’ for 25x25, it’s a mantle that BP’s Bernard Looney, Unilever’s Alan Jope, and BAE Systems’ Charles Woodburn have already accepted.
So, fast-forward three years and imagine that Cemlyn-Jones’s efforts to change the face of FTSE-100 leadership have succeeded. What difference would it make? Perhaps the most obvious impact would be on the sense of opportunity granted to half of the nation’s working population, she says. The more female CEOs there are, the more normal that situation becomes for everyone.
Cemlyn-Jones’s vision is that of a virtuous circle in which “everything seems to work together”: more open doors for talented women, better-balanced leadership teams, happier workers all round and so on. Furthermore, it would mean a more productive private sector in general. By encouraging greater diversity, firms will shake off old habits and start benefiting from an influx of new skills and perspectives.
“We’re doing this because we do actually think [a higher percentage of female CEOs] will deliver better performance,” she says. “If you open up the talent base, you’ll get the skills coming through faster and you can accelerate growth.”
Being a blue-chip CEO is not for everyone, of course. The hours are long, the responsibilities are huge and the expectations are colossal. But everyone should at least have the chance of reaching the top of the tree. That’s only fair – and smart.