'One step forward, one step back' for gender diversity in leadership

24 July 2018 Consultancy.uk

Empowering women to become leaders in sometimes male dominated business environments is no easy task, although change is increasingly on the cards, as various initiatives, from government policies to shifts in the business environment, make themselves felt. Yet while change is happening, a new report notes that in some instances companies are feigning change, rather than championing it.

A study released by Grant Thornton has shown that efforts to elevate women to the top of the world’s biggest businesses have yielded a degree of success in recent years. The proportion of businesses with at least one woman in senior management has grown from 68% in 2015, to 75% this year. However, while there are more women represented at companies that formerly had no female representation in their senior leadership; the absolute increase in women across all senior roles has been more muted. Having improved by 3% in 2016 to 25%, the level actually declined to 24% this year.

According to researchers, concern remains that elevation is part of saving face or meeting regulatory requirements, rather than genuine change to reduce the explicit and implicit barriers faced by women seeking to advance their career to leadership – while arguments that diversity has positive benefits to business outcomes may be being ignored.

Top gender equality

This would seem to correlate with the recent Parliamentary hearing on women in executive management for the House of Commons’ Women and Equalities Committee, which quizzed representatives from the water company Severn Trent, packaging company Smurfit Kappa, car parts and bike retailer Halfords, the infrastructure firm Stobart Group and house-builder Persimmon in July. At the hearing, MPs were broadly informed by the executives that shareholders are more concerned about environmental issues than promoting women to senior positions in boardrooms, while some are not convinced that businesses need more women in top jobs at all.

Rest of the World

Interestingly, Africa remains a key bastion of female leaderships, at a 30% proportion, while Eastern Europe is well ahead of the EU average at 36% and 27% respectively. Since the election of more conservative leaders in the US, male dominance at US companies has reasserted itself, with the proportion falling 2% from last year to 21%.

In terms of the kinds of policies companies have in place to improve outcomes for women, focus on equal pay for men and women performing the same role was cited by 81% of respondents – unequal pay remains a key concern in the UK with women. Some focus has also been placed on non-discrimination policies for recruitment (71%) of respondents, as well as paid parental leave (59%) of respondents.

Gender equality policies

Expanding businesses to include more women in leadership positions is for many not simply a public reputation or box ticking exercise. 65% of respondents cited attracting and retaining employees, while 65% also said it would allow them to live up to organisational values. Around half said gender equality policies boost company performance.

Glass ceiling

Grant Thornton also found a number of factors impose barriers and prevent equality policies and practices from being introduced. These include levels of complexity in translating good intentions into policy (cited by 22%), stereotypes about gender roles (21%) and a lack of evidence that it has a positive impact on company performance (16%).

In addition to this, bosses have traditionally neglected the needs of their female workforce in terms of familial support – often indirectly penalising women who take time away to start families. Family focused policies launched by firms are aiming to change that, featuring prominently in their change packages, including provision for paid parental leave (59%), flexible working hours, (57%) and part-time working (54%). Remote working (40%), publication of data on gender diversity and subsidised childcare are less highly valued factors – with around 20% each in terms of buy-in.

Interestingly, the report also revealed that much maligned quotas are not often used by companies, cited by just 16% of respondents. Analysts did find that there is some call for more use of such measures – which tend to be less positively seen – as the gender gap prevails.

Championing the cause

One of the primary support mechanisms for delivering change is for leadership, to champion the cause of change. Policies, while a part of wider efforts to effective change – do need to be policed and rollout – in part to avoid tokenism, reduce mini- me recruitment and promotion and introduce sponsorship. Championship also boosts cultural shift – with entrenched cultures and implicit biases being key areas of concern. Finally, leadership can make inclusion and diversity close values, they can set goals and link progress with regards.

Commenting on the study, Francesca Lagerberg, the Global Leader for Network Capability at Grant Thornton International, said, “The last year has seen global business take one step forward but one step back when it comes to gender diversity in leadership.”

She added that there is no single initiative that will solve the problem of gender diversity. Increasing the number of women in business leadership, like any worthwhile change, will take time and may be hard, and Lagerberg concluded, “Businesses, including Grant Thornton, must navigate their way and a key part of that will be showing to those potential future leaders that this journey is worthwhile. But by highlighting in this report the current state of play and providing recommendations for business leaders looking to realise the commercial benefit of gender diversity, we hope to help drive change.”

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Women remain underrepresented in UK's hospitality industry leadership

12 April 2019 Consultancy.uk

Female engagement at the top level of the UK hospitality industry is still lagging, with the vast majority of decision-making roles continue to be held by men. Only 7% of the industry’s FTSE 350 CEOs are women; however, the pay gap in hospitality and leisure is far better than in other industries, at a median of approximately 7%.

The hospitality, travel and leisure (HTL) sector is one of the UK’s largest employers, with 3.2 million people working in its segments. Despite a poor 2018 in terms of tightening consumer spending, the industry is still one of the top sectors in terms of economic activity, hitting £130 billion last year – besting the UK’s automotive, pharmaceutical and aeronautical sectors’ combined activities.

While the industry is one of the country’s largest employers, it still faces considerable issues around diversity at the top. New analysis from PwC has explored the matter, as well what initiatives the industry has engaged to open up its top ranks to a more diverse background.

Female representation at board level for UK companies and HTLs

According to a survey of CEOs, Chairs or HR Directors of over 100 of the most significant leisure businesses across the UK, the hospitality industry has a relatively male-dominated top level. This lags behind the FTSE 100, where companies have female board level representation at 32.2%. Meanwhile, the figure for the combined executive committee and direct reports stands at 28%. This is well above FTSE 250 levels, where female board level representation stands at 22.4% and executive committee & direct reports stand at 27.8%.

For the hospitality industry as a whole, board level representation came in at 23.6%, with FTSE 350 for the industry performing slightly better at 25.1%, while non-listed companies performed considerably worse at 18.2%. The firm notes that the figures hide that while some companies are making strides to improve equality, others are not moving forward – with the positive result reflecting more often the good work of some, while others are not taking the issue seriously in their agenda setting.

Blind spot

The study states, however, that while the overall numbers are relatively strong, the industry has a number of acute weaknesses. These include CEO numbers, with only 7% of HTL FTSE 350 companies helmed by women and 11% of non-listed companies led by female CEOs. Meanwhile, female chairs at FTSE 350 companies for the sector stand at zero. In terms of wider diversity representation, only 1 in 33 leaders at industry companies is from a BAME background.

Pay gap for HTL and hospitality

The report noted discrepancies between FTSE 100 companies and FTSE 250 in terms of improving the number of women at executive level. The majority have met the Hampton-Alexander Review target of 33% women at board level, up from around 25% in 2016. However, the remaining ~40% are not on target, and are unlikely to meet the target by 2020. A similar trend is noted when it comes to executive committee and direct reporting numbers.

Jon Terry, Diversity & Inclusion Consulting Leader at PwC, said, "To make real progress in diversity and inclusion, businesses need to elevate it onto the CEO’s agenda and align diversity & inclusion strategy to the fundamentals of the business."

Tracking progress FTSE 250 level

However, one area where hospitality travel and leisure companies are outperforming other companies in the wider UK economy, is the mean and median pay gap between men and women. PwC found that the median of the wider UK economy comes is approximately 14% – with upper quartile companies noted for a gap of low 20%, and lower quartile companies noted for differences of around 2%.

The median pay gap for HTL comes in at well below 7%, with the median close to parity. There are considerable differences, however, with hospitality at 7%, while travel comes in considerably higher, at 22%. The latter figure reflects fewer women in higher paid pilot and technical positions within the industry.