Gender parity in the FTSE 350 has been pushed back 4 years due to COVID

A new report released today by The Pipeline reveals that gender parity in the FTSE 350 is crucial for the UK’s COVID-19 financial recovery. After a devastating 15 months tackling the pandemic, companies with greater gender diversity at the top achieved higher profits and companies without female executives suffered bigger COVID-19 financial losses.

Throughout the COVID-19 crisis, we have seen the benefits of men and women working together, however companies have failed to use this as an opportunity to modernise and reform. The report data shows that companies with women making up at least 50 per cent of the executive committee secured a profit margin of 21.2 per cent. In contrast, FTSE 350 companies without women on their executive committees suffered on average a fall in profits of 17.5 per cent. The data is clear: if companies continue to actively ignore the importance of gender diversity at the top, the UK will suffer financially and struggle to bounce back quickly from the pandemic 

The Women Count 2021 report is the only report in the UK that looks into the number of women on executive committees in the FTSE 350. The report revealed that the predicted year for gender parity for women holding executive positions is now 2036, a regression of four years from last year’s assessment. The pandemic provided an opportunity to push forward with meaningful change, but instead we have gone backwards and the prospect for women seeking advancement to the senior echelons of FTSE 350 companies looks as desolate as ever.

Representation of women holding executive positions has hit the exceptionally low glass ceiling and C-Suite positions are a near total male domain. The report found that UK businesses are failing to make progress on gender diversity at the top of organisations, with women accounting for just 5 per cent of CEO positions in FTSE 350 companies, a small rise from last year’s miserably low figure of 4 per cent and continuing a trend of slow incremental growth.

With research from the Women Count 2021 report showing us that 59% of companies have no women in Profit & Loss roles in their Executive Committee, it is no longer credible to defend the argument that there are not enough women who have the leadership traits, ability, and skillset to hold pre-CEO positions.

The failure to address the UK’s executive gender deficit is costing businesses and the wider economy substantial amounts of money. The research found that if all FTSE 350 companies with less than 33 per cent of women on their executive committees were to achieve the same profit margin as those with 33 per cent and greater, there would be an additional £123 billion in pre-tax profit for the UK economy. These are vital funds that could have been essential to our national recovery from the pandemic. 

Over the years, various incentives have been implemented to improve executive gender diversity, but no real change has happened. Time has run out. Now is the last opportunity for the world of business to take matters into their own hands and take voluntary action before the government steps in to implement regulations. Boris Johnson has explicitly referred to the need to create a post-pandemic settlement in a more ‘gender neutral’ way in order for society to ‘build back better’. The Pipeline’s Women Count report highlights the simple, straightforward steps companies can take to improve executive gender diversity, unlock higher profit margins and bounce back quicker from the pandemic.

Lorna Fitzsimons Co-founder of The Pipeline, said: “The last year has been dominated by Covid-19, which has disrupted so much. Times of crisis are moments that offer the possibility of major shifts away from established paradigms, but the extreme stresses involved can also drive a response that is regressive. The data in Women Count 2021 reveals that FTSE 350 companies have not used the pandemic as a transformative moment for their businesses, instead there has been a reversion to type with companies continuing to fail women.”

Margaret McDonagh Co-founder of The Pipeline, said: Women Count 2021 shows that without decisive action, the future is looking grim for both women who want to be the next boss and the wider economy. Evidence of this lies in the incredibly low-level of women who are in executive committee roles with profit and loss responsibility, which are critical pre-CEO positions, a situation that remains largely unchanged in the last 12 months.”