Increasing the number of women on the leadership teams of FTSE 350 companies could add £47bn to their profits, according to research by gender diversity specialist The Pipeline
Its fifth annual tracking report on the number of women on executive committees and main boards in FTSE 350 companies found that those with no female representation on their executive committees have a net profit margin of 1.5%, whereas those with more than 33% women at this level reached an 15.2% net profit margin.
The report calculates that, as a result, the UK economy and shareholders have missed out on an additional £47bn in pre-tax profit, which is the amount that could have been gained if the companies with no women on their executive committees this year had performed with the same net profit margin as companies with more than 33% female membership.
Across the FTSE 350, just 16% of chief financial officers are women, only 4% of investment managers are women, and just 5% of firms are led by a female CEO. There were more CEOs named Peter (6) than there were women (5), and the number of female CEOs has dropped by one since last year, to 13.
The Pipeline argues that this has an impact on the make up of the senior team - companies in the FTSE 350 led by women have an average one in three people being women on their executive committees, which falls to an average of one in five for companies led by men.
The report identifies what it calls ‘a broken springboard’ for getting more women into the top jobs, after looking at gender ratios in executive roles containing a profit and loss (P&L) responsibility, which are considered to be key for future CEOs.
In the FTSE 350, 90% of P&L roles on executive committees are held by men and only 10% of these roles are held by women.
Over two thirds (68%) of FTSE 350 companies do not have a single female executive committee member in a P&L role. In stark contrast, just 1% of FTSE 350 companies have no men with P&L responsibility on their executive committees.
The report identified a 2.7% increase of female membership on executive committees in the FTSE 350. Women now make up 19.8% of total executive committee roles, compared to men who make up 80.2% of these roles.
Most of this increase came from the FTSE 250, as the increase of female membership on FTSE 100 executive committees has slowed to 1.4%.
However, similar numbers of companies as last year remain all-male bastions, with 15% of FTSE 350 businesses reporting no women at all on their executive committee.