New Recommendations for Strengthening the UK Pipeline for Executive Women

By Melissa J. Anderson (New York City)

A recent report [PDF] released in July by the UK’s Conservative Women’s Forum and sponsored by Microsoft provides a robust group of recommendations for strengthening the pipeline of female executives. According to the report, in recent years, the proportion of women in executive roles in the UK has decreased dramatically.

For example, only three percent of CEOs in the FTSE 100 are female – down from five percent in 2011. Similarly, only 5.8 percent of executive directors are female, down from 6.6 percent just last year. And perhaps most distressingly, the pipeline of women for top jobs like CEO and executive director – women on executive committees – has shown a marked decline over the past few years, sliding from 18.1 percent in 2009 to 15.3 percent today.

The authors of the report, Mary Macleod MP and Dr. Thérèse Coffey MP, believe that this decline can be turned around by implementing a number of targeted initiatives in the business sector, encouraging women to be more strategic about advancement, and instituting government programs designed to level the playing field for women in business.

They also suggest that the key goal set by the Lord Davies report – to increase the percentage of women board directors in the FTSE 100 to 25 percent by 2015 – should be extended to the public sector and professional services. They write:

“We challenge the public sector and the professional services to embrace gender diversity at the highest levels. We believe fresh impetus is needed in both cases to replicate the progress made in FTSE boardrooms. The Government should extend the remit of Lord Davies’ work in order to cover the public sector and the professional services. This will make a real difference to the opportunities for women in all sectors to achieve their potential.”

Here are Macleod and Coffey’s suggestions for plugging the leaky pipeline of women to executive roles.

Strengthening the Pipeline

The report provides a number of suggestions for what women can do strategically, to increase their chances of making it to the executive suite. “At present, women are less likely than men to seek out a sponsor; negotiate pay or promotion; and they often progress into functional roles, unable to attain critical assignment positions or profit and loss (P&L) experience, and hence are not viewed as having the skills to be a future board member.”

But, Macleod and Coffey continue, most of the burden should fall on business and government to clear the barriers to advancement that stand in the way of high potential women. “Efforts to strengthen the female pipeline will remain a challenge until the wider corporate culture changes and every level of the pipeline is addressed,” they say.

On the business side, they suggest first and foremost that companies implement careful measurements systems to find out where the roadblocks and leaks are in their pipeline. “Different sectors have leakages and blockages at different stages so that companies must know their own numbers. Publishing pipeline data, for instance as advocated by the ‘Think, Act, Report’ initiative, may also benefit a company’s reputation among clients, employees and investors,” the authors explain. “Data published should include the numbers of male and female employees at each level of management, the numbers of employees promoted by gender, the average pay gap between genders at each rank and attrition rates at each level by gender.”

They encourage companies to require members of the executive suite to sponsor promising women, formalize flexible work arrangements that can help not just women but everyone on the workforce, and build pathways for a smoother transition back to the workplace for women after going on parental leave. “Such initiatives would cost much less than the price paid for losing women in whom a business may have invested for years,” Macleod and Coffey suggest.

They also emphasize the importance of recognizing that unconscious bias is a serious deterrent for women executives. The report says:

“Training to recognise unconscious bias through self-assessment tests or workshops is increasingly common and, so long as the results are put into practice, is a simple, cheap but effective tool. Our witnesses were strongly supportive of its beneficial impact, with one even claiming it to be the first step in transforming company hiring practices and making the most fundamental difference of any corporate policy.”

The report also encouraged a few government initiatives designed to strengthen the pipeline of women to the executive suite. First, they believe that the government should expand its requirement that listed companies report on gender diversity in the executive committee to include the three levels below the executive suite as well.

They also encouraged the UK government to extend its Tax-Free Childcare initiative to 2014. “Average childcare price rises last year were more than four times the increase in average earnings,” they write. “We strongly welcome the Government’s new policy but fear that, if these trends continue, by the time of full implementation of the scheme cost may dwarf support.”

Macleod and Coffey also encouraged both business and government to support further initiatives to get more girls involved in STEM subjects. “It has been estimated that closing the gender skills gap would add up to £23bn to the economy. We welcome the Government’s reforms to careers advice but believe more could be done to consider the gender challenges and in particular to increase the numbers of women taking science, technology, engineering and maths (STEM) subjects.”

There is no single solution or simple bandaid that can strengthen the pipeline of women to executive leadership, and this report acknowledges that with a comprehensive set of recommendations for dismantling the structural barriers that women encounter in their climb to the top. All in all, the business case for women at the top is clear – companies with more women in executive roles do better financially in terms of ROE and stock performance. Corporate governance and decision making also improves when leadership is more diverse. At a time when the UK is mired in a slow (or negative) cycle of growth, it’s possible that paying more attention to the importance of gender diversity could turn the situation around.