February 7, 2017
In recent years the UK government has increasingly focused on promoting gender equality in business. The business community can seize the opportunity, during such heightened debate, by proactively seeking to help break down the barriers preventing women from achieving their maximum potential.
“Women, like men, should try to do the impossible. And when they fail, their failure should be a challenge to others.”
When Amelia Earhart said these words, the “traditional” family dynamics were still prominent and the obstacles women faced in achieving their dreams seemed insurmountable. Since then, there has been an unprecedented shift in attitudes and much greater recognition of gender equality in legislation, leading to more women than ever before who are financially independent and socially liberated.
A century ago, women were barely allowed to vote, let alone stand for election. Today women hold seats in parliaments across the world; in the UK a record 22.7% of MPs and 21.7% of peers are female, including the British Prime Minister.
“Women are a key source of untapped potential which we need to harness to boost economic growth in the UK.”
– Cilla Snowball, CBE (Chair), Women’s Business Council
It is not just in the political arena that women are breaking new ground. They are also making their mark in the world of business. There are now 14.4 million working women in the UK. Of the small and medium-sized enterprises in the UK, 20 per cent are now run either by women or by a team that is over 50 per cent female. These women contribute around £85 billion to the UK economy. In January 2016, there was a woman on the board of every FTSE 100 company, in stark contrast to six years ago when 21% of FTSE 100 boards had no female members. The gender pay gap for women under 40 years old working full-time has also virtually been eliminated.
Despite such monumental progress, many have the opinion that women are unlikely to be associated with higher levels of management in the UK; with only five female chief executives in the FTSE 100. There is still an under representation of women in politics with eight out of every ten parliamentarians worldwide still men and that the gender pay gap exists despite the introduction of the Equal Pay Act in 1975. The House of Commons library recently published statistics indicating that on average, female employees working full-time are paid less per hour than male full-time employees. Although there is little difference in the median hourly pay for men and women aged in their 20s and 30s, there is a large gap between men and women aged 40 and over working full-time. Additionally, 80% of those working in the low paid care and leisure sector are women, and so are 60% of those earning less than the living wage.
A study earlier this year, conducted by KPMG and the 30% Club, revealed that more than half of female students believe that their gender may hold them back in their career. Innovate UK also commissioned extra research by Ebiquity which indicated that 31% of female innovators feel that being a woman in a male-dominated industry has affected their career in a negative way. With morale and confidence low amongst many women, there are statistics indicating that women in the UK are half as likely to start a new business, and are less likely to seek external sources of finance.
Given this context, over recent years there has been an increased government focus on promoting gender equality. There have been a range of new policies on extending flexible working with a system of shared parental leave, stronger equality legislation and vital action on violence against women with investment and support to stop female genital mutilation both at home and abroad. Women are also being supported to stand for Parliament through initiatives such as Women2Win and Emily’s List and the Prime Minister herself established the Women’s Business Council whilst she was Home Secretary over four years ago. This council has sought to encourage more women to choose subjects such as science, technology and engineering at school and university and has singled out businesses for their excellent work on supporting working mothers.
Last year, the Government announced a series of mentoring roadshows for female entrepreneurs, in addition to £1.6 million of funding for rural women’s businesses and £1.1 million for superfast broadband to support female-led ventures. The Government also committed, from 2017, to double the amount of free childcare on offer for three and four year olds of working families to 30 hours a week to help more women and men balance having a family with their career. Furthermore, last July, the Government introduced measures for businesses employing more than 250 workers to publish the pay gap between average female earnings and average male earnings in their business, placing businesses under greater scrutiny to minimise the gender pay gap.
In November 2016, a report was published following a government-backed independent review chaired by Sir Philip Hampton, Chair of GlaxoSmithKline, and Dame Helen Alexander, Chair of UBM plc, which focused on increasing the number of women in the executive layer of the FTSE 350. The review stated that the UK’s corporate governance code should be amended so that all FTSE 350 companies disclose their gender balance in their annual reports and accounts. As well as setting a goal of one-third of FTSE 350 board members to be female by 2020, the review recommended that at FTSE 100 companies women should make up one-third of the employees who are on, or directly report to, executive committees. The Government has already stated that it will support and promote Lord Davies’s recommendation for a business-led 33 per cent target for FTSE 350 boards by 2020.
On her recent appointment as the UK’s second female Prime Minister, Theresa May pledged to reform corporate governance as one of her top priorities and the Department for Business, Energy & Industrial Strategy has issued a Green Paper on how to improve the UK corporate governance framework, calling on businesses and investors to give their views on what can be done on the issue (consultation closes on 17 February 2017). The Business, Energy and Industrial Strategy Committee is also currently conducting an inquiry into Corporate Governance, examining directors’ duties, executive pay, and the make-up of boards with regards to worker representation and gender balance.
All of these government actions are putting companies under increased pressure to prioritise improvements in corporate governance culture and gender equality. Businesses should view these measures as an opportunity rather than a threat, one where they can take the lead in discussing how best they and the new government can work together to promote gender equality, maximise female contribution to UK economic growth and help deliver a change in culture to better utilise the skills and talents of women throughout their careers. A genuine change in culture can only truly come about if women’s issues are also considered to be men’s issues as well as a UK economic priority.
“I want to turn around the equalities agenda and I want to change people’s perception of what the government is trying to achieve on equality.”
– Rt Hon Theresa May MP (as Women and Equalities Minister) 17 November 2010
In material terms, the government believes it is important to address the gender pay gap and ensure that women are being rewarded equally for their hard work. Of course, there should not be any excuses for paying anyone less because of their background or their gender. However, even if women are paid equally to men, gender inequality will still exist unless there is a change in culture and women feel comfortable in their working environment without being subject to biases or discrimination.
More can also be done to support women in non-traditional jobs, such as engineering and technology; this makes good business sense as it can not only help to breakdown social stereotypes and prejudices but it can make a big difference to companies in fully utilising the talents of many women and addressing the skills deficit. Particularly given the UK’s aging population, gender equality measures can boost economic growth while offsetting the impact of a decreasing workforce. The Women’s Business Council predicted that the UK could add 10% to its GDP by 2030 if all the women that wanted to work were employed. What is more, if the UK had the same female start-up business rate as the US there would be 600,000 more start- ups in the UK which would add £42 billion to the UK economy by 2030.
The business community can take advantage of this period of heightened gender equality debate to show the government and the wider society that they are adopting good practices to break down the barriers preventing women from reaching their full potential in the workplace and are embracing the benefits that diversity can bring. For example, individual companies can examine all levels within their organisations, collect data, set expectations and share best practices in helping to ensure that women get all the support, training and inspiration they need early on in their careers to progress into the top roles. Companies can also consider the incorporation of flexible working arrangements, shared parental leave and re-skilling. This can lead to many commercial improvements in terms of performance, governance and reputation.
By taking action to implement cultural changes, businesses can partner with government to support women in unlocking their potential and to help the UK maintain its reputation as one of the
best places in Europe to do business.