The FTSE gender gap: why do so few women lead the nation’s top plcs?

The UK’s biggest publicly traded companies may have recently hit a landmark target in having 40% of board roles occupied by women, yet female CEOs remain few and far between

230306 Ftse 100 Gender Gap

The UK’s largest listed businesses gave themselves a big pat on the back last week for hitting a target of having women in 40% of board seats two years ahead of schedule. The government-backed FTSE Women Leaders Review announced that there is at least one woman serving on every FTSE 350 board.

Getting a woman on to each board is one matter. Entrusting her with day-to-day control of the whole business is another entirely – and it’s an area in which British plcs are still falling short.

Cast an eye down the list of FTSE 100 CEOs and you’ll spot almost as many Stephens or Andrews as the number of female names on it. In fact, there are only eight women leading FTSE 100 companies (including one in an interim capacity who’s expected to be replaced by a man). Zooming out to the FTSE 350, female CEOs are similarly thin on the ground.

It’s been 13 years since the first government-led report into the issue (the 2010 Davies review) was completed. Why is there still such a dearth of women at the top of the nation’s biggest businesses?

Bias towards female leaders

There is no getting around it, according to experts in the field: plain old sexism is still at play. You might think that we’ve moved on from the days when the upper echelons of business were seen as unsuitable for women. But Jette Nygaard-Andersen, CEO of FTSE 100 betting group Entain, believes that ambitious women are still held to a “different standard” than that expected of men. 

“Speaking from my own experience, bias against female leaders in business in general, and STEM sectors in particular, is deeply rooted. You meet it everywhere, even today,” she says. “To be successful, women often have to play by a set of rules laid out for and by men.”

Sometimes the bias is overt. At Aviva’s AGM last year, for instance, shareholders directed sexist remarks at CEO Amanda Blanc, suggesting that she was “not the man for the job” and should be “wearing trousers instead”.

‘To be successful, women often have to play by a set of rules laid out for and by men’

But it’s often more subtle. Women are more likely than men to have their judgement questioned and have others take credit for their ideas, according to 2022 research by McKinsey and Lean In. The situation is worse for women of colour and those with disabilities. 

Leadership qualities that are widely praised when displayed by men are known to be judged harshly in their female counterparts. Assertiveness is read as bossiness, directness as coldness, enthusiasm as frivolity, for instance. One study of military performance evaluations found that female personnel were assigned significantly more negative characteristics, regardless of their objective performance. Even the positive descriptors they attracted tended to refer to the relationships they formed, not the tasks they achieved.

Contrast that with assessments of Rolls-Royce’s new CEO, Tufan Erginbilgic, who was described as “not subtle” and “not hugely likeable” in a recent Sunday Times profile, but is apparently still a widely respected high achiever. 

Women are not promoted for potential

Other research suggests that women must spend longer than men proving themselves in a role before being considered for a promotion.

Of the current crop of FTSE 100 CEOs who were promoted to these positions from within the business, the women had worked there for an average of two years and eight months longer than the men before securing the top job.

Herminia Ibarra, professor of organisational behaviour at London Business School, believes that recruiting managers may cut male candidates more slack in the selection process if they don’t meet all the requirements of the role. Women, on the other hand, are expected to display a “very well established track record” of performance and are less likely to benefit from “a bet on their potential”.

Sue Vinnicombe is professor of women and leadership in Cranfield School of Management’s Gender, Leadership and Inclusion Centre. She observes that, “when you have a dozen requirements for a job, male candidates will look at them and say: ‘I can do half of those, so I’ll just learn the other half.” If women can’t tick every single box, they won’t apply.” 

Vinnicombe cites Blanc as an example of a female leader who has worked to address this tendency: “She’s reduced radically the number of requirements for each job at Aviva to the critical skills required. If someone is outstanding at those core ones and shows great potential, but needs development alongside that, she’s prepared to appoint them.”

Failure to create a talent pipeline

An inadequate pipeline of female talent has been blamed for years as a reason for the continuing lack of women leading blue-chip firms. Experts point to the fact that so few women occupy two key positions that often serve as the final stepping stone to a FTSE 100 CEO role. 

“Still you have fewer women in the big P&L roles that tend to put you on the radar for succession to CEO,” Ibarra explains. In particular, 81% of the FTSE 350 employ male CFOs, even though half of all accountants are female. 

The picture is even more unbalanced when it comes to CEOs leading companies below the top 100. Only 11 firms in the FTSE 250 are led by women, according to gender diversity business The Pipeline. 

“If women have to cut their teeth and get a smaller CEO job first, why aren’t the FTSE 250 appointing more?” Vinnicombe asks. “We’d expect to see more women there than in the largest global companies, but we don’t.”

The other route to the top of a FTSE 100 firm is to be promoted internally, as five of the current crop of female CEOs have been. That’s an unusually high proportion, according to Vinnicombe. Over decades of research, she’s found that women tend to have to switch companies to secure the promotions they’re seeking.

“In order to go for a CEO role, you have to have very broad business experience,” she says. “Unless you’ve been identified early on as being highly talented – maybe six years before the vacancy arises – and consciously moved around the organisation, you’re not likely to get it.”

NatWest’s Dame Alison Rose is one of the few to have achieved this feat. After starting at the bank as a graduate trainee in 1992, she moved steadily upwards between divisions, leading its commercial and private banking business before becoming group CEO after 27 years’ loyal service.

Women support women

There is strong research evidence to debunk the stereotype of the catty female boss and show that women in leadership nurture women seeking to emulate their success. Indeed, several female FTSE CEOs have been vocally supportive. Rose, for instance, has written a government review into female entrepreneurship.

This can help create a virtuous cycle, Ibarra says, but the support must be deliberate to be truly effective. 

“You have to ensure that the people at the very top are sponsoring the women below them,” she stresses. “This means not just mentoring them and offering general advice about how to fulfil their potential, but really helping them to work out the strategic path they can take and showing them the stepping stones.”