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Why are so few women running British Business?

2 February 2016

Currently only 4% of businesses have a female CEO. While 94% of FTSE 350 companies have at least one woman on the board, only 13% have at least one female executive. There are only 26 (9.6%) women executive directors in FTSE 100 companies and 28 (5.2%) in FTSE 250 companies. What can be done to improve the gender balance?

Government Review

Following the Davies Review (PDF, 1.89 MB), which successfully focussed on increasing the number of non-executive directors, Women and Equalities Minister Nicky Morgan announced in October that the Government would set up a new review focusing on increasing women in executive positions.

While the Women and Equalities Committee keenly await details of the Government's plans, it has decided to hold a one-off evidence session to crystallise the scale of the problem and consider what further action can be taken by Government and business.

Witnesses

Tuesday 2 February 2016, Committee room 16, Palace of Westminster

At 10.30am

Purpose of the session

Discussions focus on:

  • The Davies Review, and whether its approach could be extended to women in executive roles
  • Barriers, bottlenecks and role models
  • Action by business and Government, and how the committee might influence progress

Chair's comments

Committee Chair Maria Miller said:

"Despite the fact that women have been achieving the best degrees from the best universities for more than a decade and a half, too few are reaching their full potential in the workplace when compared with their male counter parts. If Britain is to tackle its productivity problem then we need to ensure the most talented people are running British business. At the moment too many businesses appear to be failing to find a successful way of retaining female business talent.

We need to look at the main barriers and bottlenecks, caring responsibilities, what can be learnt from the Davies Review and whether the same approach could usefully be extended to women in executive roles."

Background

The Davies Review

This was set up in 2010 to promote gender equality on boards of listed companies, to identify barriers preventing more women reaching the boardroom, and to make recommendations for action by government and business. Between 2010 and 2015, the proportion of women on boards increased from 12.5% to 26.1%, meeting the 25% target without quotas, with limited legislation, through persuasion by Government and voluntary actions by business.

It was described by its Chair, Lord Davies of Abersoch, as "a near revolution which has taken place in the boardroom and profound cultural change at the heart of British business."  

Barriers

The Davies Review's first annual report explained the barriers to increasing the numbers of women on boards. It concluded that the low numbers were in part a symptom of insufficient numbers of women emerging at the top of the management structure and in senior management generally.

Other factors included women being overlooked for development opportunities, differences in the way men and women are sponsored, and women undervaluing their own skills and achievements – with stereotypes and perceived difficulties reinforced by the relatively low number of successful female role models.

The review also found that informal networks, a lack of transparency around selection criteria and the way in which executive search firms operate together made up a significant barrier. 

A report by Grant Thornton (PDF, 0.99 MB) found that the number of women leaving companies to start families in mid-career was also a problem which companies need to solve to keep the pipeline strong, and that the commitment to extra hours required strong support networks at home.

Action by Government and business

The Institute of Directors has recently announced a collaboration with the Women's Executive Network (WXN), to focus on women who should be identified and encouraged from an early age to aspire to become executive directors and CEOs.

Quotas have had some success, notably in France and Australia, but are controversial: not everyone believes that they are in the longer term interests of women and business, and the Davies Review found evidence that a voluntary approach can have impact.

The Government plans to establish a new review focusing on women in executive management.

Discussion will focus on the scale of the problem, legislation, quotas, and whether the review should be led by business or Government. 

Call for evidence

The committee will hold a further evidence session in summer 2016 focussing on the Government's commitment to the continuation of the Davies Review work with a focus on executive management. The committee will issue a call for evidence shortly.

Further information

Image: iStockphoto