Lack of gender diversity sees business missing out

Deloitte and PwC are backing calls for increased gender diversity at board level although women still account for less than one in five partners 

The past two years have seen very little progress globally on improving gender diversity in the boardroom, while UK boards have less than a quarter female representation, Deloitte research has found.

Women hold just 16.9% of board seats globally, according to the firm’s sixth report on the topic, a 1.9% increase from the previous edition. Meanwhile women hold 12.7% of CFO roles globally – nearly three times that of CEO positions.

UK boards now have less than a quarter of female representation (22.7%), compared to 20.3% when the report was last released in 2017.

Companies with a female chair or chief executive are making greater strides towards gender diversity in the boardroom and have almost twice as many women directors as corporations led by men. Globally there are 28.3% of women on boards with a female chair, compared to 17.1% with a male chair.

Sharon Thorne, Deloitte global board chair, said: ‘It’s clear that progress in boardroom diversity is painfully slow. If the global trend continues at its current rate of an approximately one per cent increase of women on boards per year, we will be waiting more than 30 years to achieve global gender parity at the board level.’

The data shows six countries that have over 30% of women on boards — Norway, France, Sweden, Finland, New Zealand, and Belgium. Three of these six have implemented gender quota legislation, while the other half have addressed diversity efforts without gender quotas.

Thorne said: ‘There is no quick fix to diversity in business, however corporate culture is by far one of the most important forces in encouraging change - not just at the top but throughout an organisation. Programmes and targets are critical but neither of these on their own will succeed in improving diversity without a culture of inclusion.’

Top accounting firms are not meeting gender targets either with the Big Four still having some way to go themselves on gender diversity.

In the Accountancy Daily Top 75 Firms Survey 2019, a breakdown of partner numbers by gender showed that the largest UK firm PwC had only 176 women partners, out of 908, representing 19% of the total.

Deloitte had the best split among Big Four accounting firms, having made significant progress to improve the gender balance, with one in four partners (26%) being women with 184 out of 702. EY had a 21% split with 139 women partners out of 678 while KPMG was at 19% with 120 women partners against a total of 635.

On salaries, PwC has made greater inroads: in April it reported a mean pay gap of 9.7%, down from 12.2%, and a mean bonus gap of 30.6% (was 37.8%). Deloitte published data last month showing its mean pay gap was 18.7% (18.1% in 2018) and mean bonus gap was 51.1% (52.3% in 2018).

Dimple Agarwal, managing partner for people & purpose at Deloitte UK, said: ‘The trickle-down effect of women in the boardroom, such as breaking down stereotypes, encouraging girls and young women to raise their sights, believe in their potential and pursue careers traditionally dominated by men, and reducing the gender pay gap are all important steps along the way to greater economic opportunity for women and to more inclusive workforces and societies.’

There is support for this view from a report published by the 30% Club and PwC which says companies that fail to consider gender in areas such as strategy development, product and  service design, marketing, customer experience and supply chains are likely to ‘miss millions’ of insights, customers, and revenues.

Case studies in the report show how businesses have increased customers, revenues and evolved relationships with suppliers as a result of focusing on gender considerations. For example, Vodafone has identified 200m women in emerging markets without access to a mobile, 50m of whom it aims to connect by 2025. Through re-designing its products and services specifically for women, Vodafone has already connected 20m women.

Unilever found that recognising under-represented audiences and focusing on diverse, inclusive and unstereotypical character portrayals created 37% more brand impact and 28% higher purchase intent for its brands, as well as improving the relevance, credibility and enjoyability of its adverts for millions of consumers globally. 

Brenda Trenowden, global co-chair of the 30% Club and partner at PwC said: ‘It is time for the 30% Club to extend its influence beyond representation and pay, and work with businesses to help them address the commercial benefits of gender diversity.

‘Our report shares the commercial imperative for putting a gender lens on all business activities. Those who are slow to adopt this approach in the current climate...risk being left behind.’

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