If Lehman Brothers had been Lehman Sisters, would they have precipitated the same credit crunch and subsequent banking crisis? Christine Lagarde, the newly-nominated President of the European Bank, posed this question ten years ago and business is still working out the answer. So let me have a go.
Having men and women at the top table makes Boards and Executive Committees smarter and leads to better decision making. Given that a core requirement of businesses is to make fewer stupid decisions, it’s an easy win.
Pre-banking crisis, UK productivity growth bounced along at 2% to 3% annually. Today, we are in a ‘productivity recession’ with three successive quarters of negative growth. If we continue to exclude half the population from decision making roles in our leading companies it’s hard to see how we dig ourselves out of this very big hole.
That’s why Women Count 2019 is a depressing read. It can’t be right that 85% of FTSE 350 companies have no female executives from the business on their main boards. Gender balance is static or in reverse, we continue to act without sufficient seriousness or pace, and the potential gains are being lost.
The Pipeline’s report recommends that if companies won’t address gender imbalance, then it’s time for the investment community to give them some encouragement. Women Count 2019 shows that the proportion of women on Boards and Executive teams is a good indicator for profitability. Taking this into account when investment decisions are made is now long overdue.
British Economist & Vice Chairman, Northern Powerhouse & Chairman, Chatham House and Trustee, SHINE
It is a pleasure to endorse The Pipeline’s Women Count 2019 report and the calls to action it proposes. It confirms everything my own career in business has taught me about people, culture and success.
I have no doubt that Siemens continues to strengthen its position as a world-leading business because our people have the richest range of experience from as many viewpoints and backgrounds as possible.
We are often asked to explain our inclusion policies and the next time I visit another company to advocate improved gender balance, I’ll be taking a copy of Women Count 2019 along with me! It provides hard evidence that promoting more women isn’t just ‘the right thing to do’ – it produces measurable returns.
The Pipeline’s analysis clearly shows that FTSE 350 companies with more than 25% women on their Executive Committee have profit margins almost three times higher than firms with all-male Executive Committees. Sadly we don’t have enough companies with the right diversity on Executive Committees.
So, I hope this report provides the evidence to spur many more of us on to change that. If you believe as I do that talent is distributed evenly between the sexes and from people of all backgrounds, then we have to do better. The alternative is to miss out on the significant economic gains for Britain’s businesses.
CBE CEO, Siemens UK & Fellow, Institution of Engineering & Technology and Fellow, Royal Academy of Engineering