The head of one of the UK’s leading business groups has raised concerns about the fall in the number of top level CFOs revealed by Financial Director earlier this month.
Ann Francke, who heads up the influential Chartered Management Institute, said: “Frankly it’s concerning to see that the number of female FTSE 100 CFOs has fallen in the last year, despite all the efforts of Hampton-Alexander, the 30% Club and others to improve female representation in the C- Suite.”
Coming on the back of a ten year rise in the number of female finance chiefs in the top flight of companies, she said: “Female leaders are stuck in what we call ‘the glass pyramid’. Women hold the majority of junior managerial roles, (66%) but slip off the higher up the ladder you go – women hold only 25 percent of the the top roles,” reflecting on the CMI’s own research.
“Not only is gender representation limited at the top, but the gender pay gap is wider- especially when bonuses are factored in. Yet not nearly enough progress is being made, despite the overwhelming evidence that diversity delivers results,” added Francke, who is recognised as an expert on challenges facing women in the workplace.
Francke, who has held senior positions at Boots, Yell and was European Vice President at Mars, said diverse boards are key to achieving gender balance throughout a business and set the example from the top down.
“Improving gender balance in the executive pipeline isn’t about promoting women, it’s about boosting organisations’ leadership capability and performance – diversity delivers results.
“According to McKinsey, equal representation of men and women could add £150bn to the UK economy in the next 10 years. Not only is diversity good for the economy, it’s good for business – improving financial performance, employee engagement and decision making,” added Francke, who was named in the top 100 women to watch in the 2015 Female FTSE report by Cranfield University.
But the author of the Financial Times Guide to Management: How to Make a Difference and Get Results said she was against the idea of introducing quotas for C-suite roles.
“While quotas have clearly worked for many countries, we believe that organisations should resolve this issue voluntarily to be truly accountable. The gender pay gap reporting regulations provide transparency and the ability to benchmark progress.
“Employers should treat this as they would any other business initiative – set transparent targets for getting more women into senior roles, adopt the necessary cultural and process changes and track the results. After all, what gets measured gets managed,” added Francke.
Value of diversity
In a 2016 report, the McKinsey Global Institute (MGI), found improving gender parity in work – including workforce participation, hours worked, and sector mix of employment – could realistically add £150 billion in GDP in 2025.
The report added that if full parity were to be achieved – meaning women were involved in the workforce identically to men — a total of £600 billion of additional GDP could be added to business-as-usual forecasts in 2025.
But the MGI added in the report that while the £600 billion is an over-ambitious goal for the next decade, the £150 billion figure can “realistically” be achieved if every UK region matches the pace of the fastest-improving region for gender parity over the past decade.
In a recent report launched by the ICAEW Charitable Trusts entitled Diversity and the accounting profession, systemic problems that are making a slow pace of change to a more diverse accountancy profession were identified.
“General findings from the report are that workplaces are built to favour white males – this could be to do with ‘fitting in’ better, not having childcare commitments, client activities tending to include male-interest activities, and business development requiring more confidence/assertiveness, which women/other cultures might not be used to,” said the report.
Among the findings were the need for strong female numbers as students, diversity networks are positive, but only present in larger firms. Many participants were concerned about negative associations with joining a network (ie joining LGBTQ network would mean ‘outing’ yourself)
It was also recognised that flexi working can be exploited by employers who expect employees to work excessive hours and that diversity in recruitment is improving, but career pathways for minorities are still an issue.
Recommendations within the report include the need to extend diversity training, use focus groups to understand employees’ experiences of diversity management, employ exit interviews and develop informal mentoring groups.