Women chairs to drive diversity across the business

This International Women’s Day 2022, Helen Pitcher OBE, IDN President shares her thoughts on the role that women chairs play as a driving force for diversity across businesses.

It is widely recognised that the two critical dimensions driving equality in the organisational and business workplace are the roles of Chairman and CEO.  Currently however, they are acting as barriers to progression, with the woeful lack of diversity in our Chairs, CEO’s and Executive Leadership populations.  The recent FTSE Women Leaders Review Feb 2022 again highlighted this issue especially in the CEO and Executive Leadership landscape.

“The number of women in the very top job, that is the CEO remains flat and stubbornly low, and there is much more to do on Executive Committees.”

The annual Female FTSE Board Report by Cranfield University shows a positive gender progression at the NED Board level, but throws into stark relief the lack of progress on gender equality in the C-Suite, with the female Chairman leadership of our Boards at 11% in the FTSE 100 and 14% in the FTSE 250 and with only 8% female CEOs across the FTSE 350.  Additionally, female participation in executive leadership has flatlined at 13.7% in the FTSE 100 and 11.2% in the FTSE 250.

We are relying on traditional and slow solutions to solve an unsustainable situation; we need to employ spiralling creativity and innovation to drive change.  This should be a revolution of action, thought and imagination to break the mold and learn new ways of thinking and acting.

The classic rationalisation to the lack of progression for women in CEO, Executive Committees and Senior Leadership roles is the ‘supply deficiency.’  The research done by Assistant Professor Shirley Lu (Harvard Business School) indicates that we could be waiting a long time for the ‘supply side’ environment to change voluntarily.  At the same time, we have the insight from the Cranfield Report of the many capable female leaders who are around, ready and able to fulfil these most senior roles.

While the average tenure of CEO’s at 5 years, provides an insight into their short-term focus, there is little excuse for Chairman to ignore this inequality with their generational stewardship of the business.

In a recent article I suggested that Quotas was the only way to break this log jam, starting with the role of the Chairman at 40%, in order to drive diversity throughout our companies.  The female Chairs are available, ready and waiting for these appointments as demonstrated by the Cranfield Report.

It is time to act, and let’s not kid ourselves that ‘voluntary’ action alone will solve this issue.  The original 2011 Davis Review ‘Women on Boards’ was commissioned and driven by the Government who were concerned about the slow rate of progress of women onto Boards.  It did not spontaneously emerge for companies, the FRC or Companies industry bodies seeking to drive change.

The FTSE Women Leaders Review which is supported by Government and builds on the work, and success, of the Davies and Hampton-Alexander Reviews, has recognised this dilemma.  The Review has set a new recommendation for the Senior Leadership of the FTSE 350 business.  Namely, that a women should be in at least one of the most senior roles in a FTSE 350 business by 2025.  Those roles are the Chair, Senior Independent Director, CEO or CFO.  While this is a good first move, it fails to recognise the dominance of the Chair and CEO roles as the primary driving force for diversity across our businesses.

The Chairman and CEOs have had their chance to progress voluntarily, and they have failed.  It is now time for Governments, Regulators, Female Chairs, NEDs and the Diversity Lobbying Bodies, to say enough is enough, the time for substantive action to break the behavioural anchors has arrived.  Only an immediate progress on the levels of Women Chairman will drive out this inequality of female CEO’s and Leadership Executives across our business landscape.  I would be delighted to see the FTSE Women Leaders Review Recommendation drive a significant upward movement to a 40% target of women Chairs, I remain vigilant however, as to what will be achieved by the end of 2025.