We Need More Women in Business

It's not just that there is a 'moral case' for greater diversity in business. Capitalising on women's potential makes economic sense. Having more women on corporate boards has been shown to increase both the share price and the return on equity. It doesn't surprise me that the 2013 list of the world's most valuable brands showed companies with a greater than average proportion of female board members outperforms those with an all-male board. So why are women undervalued across the business spectrum?

One element which constricts our economy, whichever government is in power, is the continued refusal to acknowledge the economic potential of women. Isn't it about time we seriously tackled this longstanding situation?

Statistics highlight the extent to which we undervalue women in the business world. Women represent just 20% of FTSE 100 directors and account for only 33% of all senior managerial positions. It is true that in recent years things have slightly improved, in 2003 the number of female FTSE 100 directors was 9%, but this progress has been painfully slow.

The situation for FTSE 250 companies is even worse. According to the Business, Innovation and Skills (BIS) department there are 48 all-male boards and female representation in boardrooms is running at 15.6%. There is also a wide disparity between the numbers of women holding executive and non-executive directorships.

It is not just at director level that women are in short supply. Recent estimates show that just 19% of our small and medium enterprises (SMEs) are majority women-led. These women-led SMEs make a staggering £75 billion contribution in terms of Gross Value Added benefit to the UK economy.

Shockingly the gender pay gap still exists, with women paid up to 20% less than their male counterparts. How can female employees feel valued at work, or have a sense of self-worth, if male colleagues receive much more pay for similar work?

It's not just that there is a 'moral case' for greater diversity in business. Capitalising on women's potential makes economic sense. Having more women on corporate boards has been shown to increase both the share price and the return on equity. It doesn't surprise me that the 2013 list of the world's most valuable brands showed companies with a greater than average proportion of female board members outperforms those with an all-male board.

So why are women undervalued across the business spectrum? The answer is culture. The corporate culture in workplaces seriously hampers the aspirations of many women. Long hours and the increasing requirements for employees to be available 'anytime, anywhere', combined with the absence of family friendly working practices.

As Ann Francke, chief executive of the Chartered Management Institute, commented: "The real issue we need to confront is the lack of women in the talent pipeline. Too many talented women opt out before they fulfil their potential, because business culture puts them off."

It is promising that some leading businesses are taking action to address this imbalance. Lloyds Banking Group recently announced its aim for 40% of its top 5000 roles to be women. Honda has recently appointed its first female board member, an especially important step for a male dominated industry.

But if we rely solely on business we risk waiting for another 200 years before gender parity is achieved. Evidence shows that the UK's biggest companies are likely to appoint a female director only if the post has been vacated by another woman. It is clear that despite some progress, gender bias remains entrenched at the top of British business.

Government must act. BIS has set corporate boards a target of achieving 25% female representation by 2015. This is welcome but more needs to be done. There has to be a radical change in culture, taking account of unconscious bias that continues to see men as more fit to take on these roles.

Practical measures are also needed - childcare costs have risen by 30% in the last four years, and as many as 50,000 women face pregnancy discrimination. Workplace sexism is still rife, not the type of environment that encourages women to thrive as entrepreneurs.

Knocking down barriers facing women in business, helping to maximise women's contribution to the economy, will reap substantial economic benefits for the UK. There is no single approach which will create the profound systemic change needed. But if we really want to address the paucity of women in business, we cannot take our foot off the accelerator.

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