Despite progress at boardroom and below, the number of women at executive committee level has not increased for over two years in FTSE 100 businesses.
This is according to new research by the Cracking the Code team, a collaboration between KPMG, Why Women Work, YSC and the 30% Club, which analysed 850 roles in executive committees in the FTSE 100, looked at diversity data from 15 large corporates, and conducted follow up interviews with 70 of the 89 women the team interviewed for its original research in 2014.
The findings highlight a career bottleneck for senior female executives at executive committee level in FTSE 100 businesses, where the number of women has remained virtually static at 17% for more than two years. This is despite progress being made at every other level of the executive pipeline in the wider FTSE 250, with the number of women holding roles in the ranks immediately below the executive committee increasing by 2%, to 25% in 2016.
Based on this current pace of change, the report warns that it is impossible to predict whether, let alone when, businesses will see 30% of executive committee roles being performed by women.
In order to effect change, Cracking the Code is calling for companies to take more radical action, including publicly reporting the gender balance in their organisation. This would include organisations working with the Hampton-Alexander Review to agree and adopt standardised methodology to help monitor female participation in the executive pipeline.
Melanie Richards, Vice Chair at KPMG, introduced the publication of detailed diversity monitoring and targets at the firm. She said: “While businesses are making progress at boardroom level and below, there remains a clear bottleneck for women at executive committee level. This must be overcome if women are to advance in business.
“It’s clear there remains a degree of ‘corporate nervousness’ when it comes to monitoring and reporting diversity, with many leaders concerned that the data will lead to a bad news story for the business. However, failing to collate and interrogate diversity data merely contributes to a lack of clarity on cause and effect. By monitoring the progression of women at all levels, both business and government will be able to better understand where women tend to stall in the executive pipeline compared with men.”
The researchers also found external hiring was a key factor driving change, rather than businesses investing in developing their own female talent. Since 2012 YSC has seen an increase of 6% in the proportion of female executives being assessed at a senior leadership level as part of an external hiring process.
Gurnek Bains, Chairman of YSC, said: “We are seeing progress, but it’s being led by a number of enlightened leaders rather than a wholescale shift towards parity. Better reporting would enable both government and corporates to shine a light on this issue and help us all to understand the factors helping and hindering progress.”
Women are confident that broader cultural change is taking place within the business community. As part of the research, Why Women Work conducted 70 follow-up interviews with women originally interviewed in 2014. The majority of these women have made career moves in the last two years and at the very top of business, female executives said they no longer feel they are the ‘token woman’. Instead they described a more inclusive environment with themselves and other diverse individuals being valued for the different types of experience and expertise that they bring.
The research confirmed their 2014 findings that childrearing is not the main barrier to career progression. All of those on maternity leave interviewed are intending to return to work and continue with their careers as working parents. Those still planning to have children are unsure how they will make use of shared parental leave provisions.
Rachel Short, Director of Why Women Work, said:“Despite the longstanding myths about women at work, they are taking more control over their own careers, making proactive moves from one role to another or from one employer to another. There are two areas where women are still more reticent (or less ruthless) than their male peers in their career-building. They seem to be less visible or less demanding when accessing leadership development experience and can hold back from difficult conversations with their other half when it comes to sharing time out of the workplace for childcare.
“Most exciting for me are the signs that women seem to be succeeding on their own terms and doing what feels right for them rather than replicating what works for men at work. As their numbers tip beyond 30% at all levels, they are helping to reshape organisational dynamics and what leadership looks like in large corporates.”
Brenda Trenowden, Global Chair of the 30% Club and Head of Financial Institutions, Europe, ANZ, commented:“It is genuinely encouraging to note the uplift of women in the pipeline within organisations taking part in this research. However the key challenges going forward will be to tackle the issue at Executive Committee level where efforts to date have not yet paid off and the number of women is still stubbornly low.
"As a result we are asking companies to set themselves a minimum 30% target for their Executive Committee and one level below."
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
The world’s premier independent leadership consultancy.YSC partner with clients across their leadership and talent agendas, helping organisations to achieve sustainable success by releasing the power of their people. They make broad impact through deep insight, underpinned by rigorous independence and led by qualified, characterful and authentic consultants. YSC are global in reach, supporting iconic multinational, regional and local companies, as well as government bodies and not-for-profit organisations. Key client offerings include cutting-edge services and thought leadership in the arenas of Board and CEO development and succession planning; executive assessment; executive coaching; leadership development; leadership frameworks and culture change; diversity and inclusion; executive team development; and emerging talent and identifying potential.
About Why Women Work
Why Women Work is an innovative social enterprise, founded in 2015, to boost the number of women in corporate leadership roles. Our aim is to create an ecosystem that gets the best collective leadership out of male and female talent and enables experiential diversity to feed into a vibrant, innovative organisation that outperforms. Partnering can range from advisory services on diversity initiatives, to demonstrating a live, localised business case for diversity, through to executive collective coaching (‘E-Co-Coaching’) on changing the diversity climate. The underlying ethos is always the same; to understand what is working for men and women in a specific context and to use this insight to accelerate change. We draw on cognitive and social psychology along with emerging neuropsychology and behavioural economics to tailor the solution according to the evidence. Run on a commercial basis, all profits are channelled into supporting pro bono research and community activism on gender diversity.