Gender Diversity in British Business: A Tale of Competing Narratives

In yesterday’s Financial Times, the newspaper ran with a headline that ‘Leading UK companies at risk of falling short of gender targets’. Here in Financial Regulation Matters we have discussed the issue of gender diversity within the business arena on multiple occasions, and in relation to a number of different jurisdictions (here, here, and here). However, upon reading the article it quickly becomes clear that there are competing narratives at play, whilst there are also narratives and important issues that are not included in the discussion. In this post we will look at the highlights of the article but also the wider issues.

The article is based upon the latest report from the Hampton-Alexander Review, a review set up to build on the work developed by the Davis Review. The Davis Review compiled evidence from 2011 onwards regarding the composition of Boardrooms in the largest of FTSE companies (100, 250, and 350) and, in 2015, declared that much improvement had been made; the Review starts by declaring that representation on FTSE 100 boards had doubled since 2011 to 26.1% (and 19.6% for FTSE 250). In attempting to push this further, the Hampton-Alexander Review has set a target for FTSE 350 companies to have at least 33% of Board positions held by women. Their penultimate report was recently published and forms the basis for the FT article. The headline statistics are that female representation at FTSE 350 companies had increased to 28.6% from 27% in 2018, but that ‘175 companies were still “well adrift” of the 33% goal, with a “surprising” 44 all-male executive committees across the listed market’. The concern is that this grouping will not meet the target by 2020 because, if it were to do so, then half of all available roles available in the next year would have to go to women – a statistic which is unlikely given recent and historic performance. The leaders of the Review are both positive and a little negative about the results, with the CEO Denise Wilson proclaiming that ‘there are over 900 women now serving on FTSE 350 boards, providing an ever-increasing pool of women with substantial board experience’, but that based on the fact there are only 14 female CEOs in the FTSE 350, ‘only 25 women have been appointed into the chair role, even fewer women CEOs and [this is] showing little sign of change’.

Yet, the FTSE 100 is ahead of schedule in terms of meeting the set targets, whilst the FTSE 250 is fully expected to meet its targets in time for the cut-off point. There are instances of outlying organisations – the FT focuses on Daejan Holdings and the Kainos Group who each have all-male boards, as well as 39 other so-called ‘one and done’ boards who have a solitary woman on their boards – but the sentiment displayed by those in the Review and by the article is that there is momentum on their side. The article and the Review conclude by discussing the need for further development and also further development at the Executive level, not just at the Board level. It is clear then that there are positive and negative elements. Clearly, since 2011, the rate of development has been relatively rapid, and this is incredibly encouraging. Negatively, there is still plenty of work to be done and, more importantly, at a number of different levels so that true diversity is achieved within the British sector. However, this concept of ‘true diversity’ is extremely important and, in light of some further statistics that are not discussed in this article or the Review, there is an incredible amount of work still to do.

There are only one or two references to race within the 79-page report, and this is not surprising. Writing in January, the FT found that all of the 25 female executive directors working for FTSE 100 companies were white, and 97% of the female executive directors of FTSE 250 companies were white also. The January article makes the obvious but necessary point that organisations that promote corporate gender diversity – such as the City Women Network and the 30% Club – are mostly controlled by white women, whilst Reviews such as the Hampton-Alexander Review are led by white man and women. The article states that when they interviewed senior corporate leaders about the lack of racial diversity amongst female corporate leaders, ‘some of them suggested that black women were unqualified and lacked the drive and intellectual rigour to break the glass ceiling’. Whilst this quote is very anecdotal, there are two issues that arise from it. One is that language is particularly colonial in its sentiment and the focus on black women in particular is telling. Another is that, as the article makes clear, between 2014 and 2017 ‘the proportion of Chinese, Indian, Black African and white 16- to 64-year-olds in the UK who had university degrees was 60%, 52%, 41%, and 28% respectively. Clearly then, qualifications and intellectual rigour should not be an issue. The Trades Union Congress last year declared that BME people are still facing disproportionate discrimination in the British workplace, with the FT article confirming that race is the dominant explanatory variable for imbalances in pay and promotion once differences in age, education, and gender are controlled for. It is also important to note that, not surprisingly, this level of under-representation occurs when applied to black males also – since the creation of the FTSE 100, there has only ever been one black male CEO; Tidjane Thiam of Prudential. The FT article contrasts this with the fact that, in that same time, the number of white female CEOs at FTSE 100 has risen from one in 1997 to six in 2018. Further analysis of the FTSE 100 reveals a stark situation: of the 300 senior executive positions in the FTSE 100 (chair, chief executive, or chief financial officer), the positions were held by predominantly by white people – 271 white men, 25 white women, four Asians, and no black men or women (Thiam departed Prudential in 2013).

These remarkable figures (or perhaps not so remarkable) tell us one thing, perhaps. Whilst it is vital that we celebrate advancements in gender diversity within British business, we must not fall into the trap of ‘whitewashing’ the narrative. The appalling under-representation of black women, even in the narratives being presented regarding gender diversity, must come to an end of true diversity to be achieved. This is even before we look at resolving the appalling under-representation demonstrated across the board. There is a similar narrative-based problem within other fields, like the legal field, whereby statistics applauding increases in ‘BAME’ recruitment wash over the fact that, for certain categories of people (black men and women in this instance), the rate of advancement is painfully slow. Statistics must be promoted in the right light and, crucially, from within a holistic narrative. If they are not, they only tell portions of the story, and that is of limited use. Perhaps the real need is for people to alter what the concept of ‘diversity’ means for them – it cannot mean diversity for this group or that group, because that is not diversity. There is still work to be done based upon the report from the Review discussed in this article, but closer examination reveals there is much more work to be done than even they realise.

Keywords – business, gender, diversity, race, @finregmatters