There is a dark cloud hanging over UK businesses. Slow growth and a lack of real innovation has left the UK as by far and away the least productive nation in the G7. Perhaps then it is time to review how and more importantly who is running our businesses. It is depressingly unsurprising to learn that women not only make up only 9% of FTSE 100 chief executives, while progress towards equality seems to be as sluggish as our businesses themselves, with women not projected to reach CEO gender parity until 2076. These numbers should be of concern not just for its clear unfairness but also on pure economic grounds. Low levels of equality in the boardroom go hand in hand with our lack of competitiveness. Simply put, British businesses do not have their finger on the pulse of the wider population, and a closer look at what women can bring to executive level roles is long overdue.
Above all, the case for getting more women in at the top is one of simple economics. With 60% of personal wealth projected to be in the hands of women in the UK by next year, there has never been a greater need for female representation. Women understand what women want. In every industry from finance to retail, there is an implicit need in every business to understand why and where people spend money in the ways they do. Take Angela Ahrendts for example, Head of Retail for Apple between 2014-2019, who implemented various changes to Apple’s retail business to make it more appealing for women, with the turn towards a more personalised and community-oriented experience coinciding with a huge boom in Apple’s sales. With gender identity being arguably the most predictable determinant of how we see the world, understanding female behaviour must be a critical part of any business, ignoring them as a key demographic would be akin to a company such as Apple neglecting to market to China and India combined.
Beyond the benefit of their lived experience, women are also proven to be more capital efficient when placed in charge. While the reasoning behind this sizable difference is debatable, with some putting it down to the more consultative and risk-averse approach taken by women, the numbers speak for themselves. Forbes reports that female-led tech companies in the US achieve an impressive 35% higher ROI, and startups initiated by women consistently yield approximately double the revenue per dollar invested. Similar patterns emerge in the UK, where BBC reports highlight the stark contrast between London-listed companies with no women on their executive committees, managing a mere 1.5% net profit margin, and those with over one in three women at that level, boasting an impressive 15.2%. The seven-year reign of Carolyn McCall at easyJet serves as a resounding testament to the calm and unwavering leadership that women can provide.Throughout turbulent times for the airline industry, with the 2008 financial crash still hampering markets, McCall oversaw a quadrupling of easyJet’s share price and was commended for her pragmatic approach to Brexit, with her little publicised move into the continental European market outpacing that of Ryanair and other competitors.
Women possess a unique ability to break free from conventional CEO norms, frequently setting aside ego and excelling in the essential ‘soft skills’ crucial for business triumph. Research from Forbes tells us that women outshine men in 11 of the 12 major emotional intelligence characteristics, particularly excelling in traits like compassion and integrity, while CEOs who exhibit strength in these areas consistently outperform their peers. The UK has a rich history of dynamic female CEOs shaking up industry for the better. Take Nicola Foulston for instance, who took over legacy racing business Brands Hatch at the tender age of just 22. In her nine years at the helm, Foulston transformed a £6mn business where ‘calculations on the back of cigarette packets’ was the norm to a far more commercially minded $150mn business at the time of sale. Foulston has gone on to speak about how her position as a young female executive was a benefit, allowing her to make fewer assumptions and put her ego to one side – challenges all too often seen by men in leadership roles.
In essence, the UK’s business landscape is in dire need of a shake-up. The sluggish growth, lack of innovation, and abysmal gender disparity at the top levels of corporations are not just moral concerns; they’re hampering economic progress. The evidence is clear: diverse leadership isn’t just a matter of fairness; it’s a catalyst for success. The untapped potential of female leaders in understanding consumer behaviour, delivering higher returns on investment, and excelling in emotional intelligence shouldn’t be ignored. It’s time for businesses to break free from outdated norms, embrace diversity, and reap the rewards of a more dynamic and prosperous future.
Photo by Kelly Sikkema on Unsplash
