Companies in the FTSE 350 with more diverse executive leadership teams perform considerably better and have higher profit margins, a new report said today.
Analysis by gender diversity business the Pipeline showed more diverse companies — which have executive committees with female memberships of more than 33 per cent — have a net profit margin over 10 times greater than those companies with no women at this level.
This leads to approximately £47bn in pre-tax profit being missed out on, if those companies had performed at the same level this year as those with more women on their boards.
In 2020, there are just 13 female chief executives of FTSE 350 companies, equating to five per cent of company leaders. As of April this year, there were more chief executives named Peter than there were women.
Meanwhile just 16 per cent of chief financial officers are women, with men taking 84 per cent of these roles.
“Whenever data reveals a disparity of outcome between groups, the challenge to those in power should be — explain it or change it,” said former Prime Minister Theresa May.
“There can be no good explanation for the massive underrepresentation of women at the top of British business — so it must change.
“Every single male CEO who looks around his boardroom table to see nine out of 10 male faces staring back at him needs to ask himself what he is doing to make his business one which his daughter or granddaughter can get on in.”
Retail and construction were the two worst performing sectors in terms of executive gender diversity, with the proportion of women at the top of construction companies falling two per cent in the last year to 11 per cent.
The retail sector is not far behind with only 24 per cent of women on executive committees, and zero female chief executives or board chairs.
“The failure to develop and promote women into CEO or C-Suite roles has serious consequences, not least for profitability, especially for those companies who have yet to place a single woman onto their executive committee,” said CBI president Lord Karan Bilimoria.
“We must do better than this. Dealing with the legacy of Covid-19 will require us to create and sustain an economy that works for and recognises the value of everyone, where we achieve a better Britain by all working together.”