For many years businesses have been missed out on having the skills and expertise of women in their boardrooms. This is a subject that is dear to my heart, as many of you may know, and something I have been promoting internally at the IoD since I became Chairman. I have been a member of the advisory board for the Hampton-Alexander Review, a government initiative to take forward the good work put in place by the Davies Review in 2015.
The Davies Review set a target to increase representation of women on FTSE 100 boards to at least 25% by 2015 which was met. The Hampton-Alexander Review has recently extended its targets by setting out plans for FTSE 350 companies to have women fill at least one third of their senior leadership positions just below board level. FTSE 100 firms seem likely to hit this target by 2020.
These efforts, with support from Government, can markedly improve the situation. As noted above, FTSE companies have substantially increased the number of female director appointments since 2011. They have in fact doubled, proving that there always were plenty of talented and capable women out there just waiting to be given the chance to show they belonged in the boardroom.
The next challenge is to create a step-change in the proportion of senior executive positions held by women. With more women in work than ever before, and women, in general, making the majority of household spending decisions, it makes eminent business sense that they should also be setting the strategy at the top of many businesses. In these crucial decision-making roles, women can also set the tone for their organisations, ensuring there are equal promotion opportunities at all levels. In this way a pipeline of female talent can further consolidate the improvements we have seen in the last few years.
Statistics that came out last week from the World Economic Forum show that, internationally, the equality gap between men and women will take 100 years to close at its current rate. Astonishingly this is up from the 83 years it stated last year. In terms of workplace pay, women will have to wait 217 years before they earn as much as men. There will always be examples where more could, and should, be done. I hope, however, that with stark facts and government initiatives, we can ensure that we have a more diverse, thoughtful and gender-balanced workforce in the years to come. We need to encourage our women to create wealth and to stimulate our economies.
UCAS said in December 2015 that women are now 35% more likely to go to university than men – this is a gender-gap that I am content to see widen, especially to these record levels. There are now more women than men enrolled in two-thirds of higher education courses. There are big differences, however, in the courses they study. Women began to study medicine and biological science in meaningful numbers only last year, Physical sciences, mathematical sciences, computer sciences and engineering all, however, continue to be male-dominated. For example, in 2015, 5,000 women were accepted to study engineering, compared to 25,000 men.
We need to continue to encourage our daughters and girls to enter these STEM subjects at undergraduate and graduate level. These are the subjects that will keep them in the talent pipeline throughout their careers. In addition, these subjects will enable them to reach the upper echelons of both executive and non-executive boardroom roles.
In my opinion it should start even earlier. Girls should be taught the language of leadership at a very young age. When they are asked what they want to be when they grow up, they should naturally respond “I want to be a Chairman, I want to be a CEO, I want to be a boss.”
Best regards as ever,