UK high street urged to appoint more women to P&L roles
Britain's top retailers have been urged to appoint more women to positions with P&L responsibility after it has emerged that only 8% of such roles are filled by women in FTSE 350 retail businesses.
While retail outperforms most sectors when it comes to female members on their executive committees, which are made up of 22% women, those with P&L responsibility is "worryingly low" according to the latest figures published in Women Count, the third annual report by The Pipeline (see graphic above).
"For the second year running, this research found retail companies were in the top quartile on the three key measures analysed. However, the percentage of women in P&L roles on executive committees is worrying. In a sector that is predominantly P&L focused, without a robust pipeline of women with P&L experience, retail is unlikely to see strong growth and may lose their top spot," the report said.
Overall the report found that the representation of women in the higher echelons of FTSE 350 companies had been unchanged for three years and, by some measures, it is going backwards:
- - The ratio of women on Executive Committees of FTSE 350 companies has stayed the same at only 16% since the first report three years ago.
- - 95% of all P&L roles on Executive Committees are held by men and just 5% by women, a decrease on last year – most women instead perform ‘functional’ roles such as HR, marketing, legal or compliance.
- - The percentage of women executives on main boards has flatlined at 8% between 2017 and 2018. This means 92% are still held by men.
The report places its emphasis on the representation of women on executive committees, as opposed to main boards, as they have the power to run the company.
Despite little progress being made the report pointed to the economic benefits of appointing more women to top roles. "There is a £13bn gender dividend on offer for UK plc, if all FTSE 350 companies performed at the same level as those with women on their executive committees. FTSE 350 companies with no women on their executive committee only achieve an average 8.9% net profit margin. Where there are at least 25% women on executive committees, average net profit margins soar by 5%, to 13.9%," it said.
The report also found that women CEOs are more likely to appoint more women to top roles, stating:
- - Female CEOs have more than twice the number of women on their executive committees than male CEOs
- - Female CEOs have four times the number of women executives in P&L roles on their executive committees compared to male-led companies.
- - Only 4% of FTSE 350 companies have female CEOs, yet within a year these female CEOs have increased by 10% the average number of women executive committee members.
Ann Steer, Chief Customer Officer, at retail group N Brown said she was "surprised" at the results of the report. "I think it’s disappointing to see the lack of progress over the last three years. When I think about my journey at N Brown, when I started the board was all male, I was one of half a dozen female senior managers. Now we’ve got a female chief executive [Angela Spindler], two fifths of the Executive Committee are women and at the next level down, senior manager level, almost half are women in our business. I think it’s important to be able to relate to your customer and to champion the customer. Equally I think mixed groups men and women make better decisions together because effectively you’ve got diversity of thinking, more collaboration more flexibility as we move round different problems and challenges.”
Rt Hon Nicky Morgan MP, Chair of the Treasury Select Committee commented: “Women Count 2018 gives us the proof that having more women on executive committees boosts profitability. It unpacks in forensic detail the status of women in FTSE 350 firms, the number of women on executive committees, and the correlation between female representation and economic performance.
“This lack of progress calls into serious question the possibility of achieving the UK’s target of 33% by 2020 which I set in response to the Davies Report, as Minister for Women and Equalities in 2015. Businesses that don’t understand the need to appoint more senior executive women are failing to meet their full potential. I ask them to read this report and wake up to reality, in their own interests and the country’s interests.”