While gender representation has certainly seen an overall improvement in the world of work over the past few years, the question remains whether it has had an impact in business leadership yet. Recent data shows that across the  FTSE 100, there are three times more female employees today compared to ten years ago, up from 12.5% to 39.1% over the last decade. It is notable, then, that only 13.5% of directorships are held by women. 

This research also shows that it takes a critical mass for women to have an impact on leadership teams, with women reporting feeling isolated or ignored when they’re the only woman on the team. Such a situation also leads to “hyper-visibility”, where mistakes or missteps are magnified, meaning that there can be a professional or personal cost to being the sole female at the leadership table. There is a clear and quantifiable gap between having one or two “token” appointments to meet a quota, and to achieving a meaningful balance that unleashes the strategic benefits of a gender balance.

Regulation to the rescue 

A new wave of legislation recognises and aims to address this imbalance. For example, in France, there is a new requirement for companies with more than 1,000 employees to have 30% of executive leadership positions filled by women by 2027 and 40% by 2040. The UK government is making similar moves, opening a consultation on proposals that would, among other things, require companies to appoint a woman into one of the top four most critical roles – Chair, CEO, CFO, or Senior Independent Director. 

These moves provide a glimpse into a future where companies are compelled to be more intentional about achieving gender balance. The regulations also aim to address the gender balance across critical roles of influence in the organisation. While the improvement in the percentage of NEDs is good news, it represents low-hanging fruit in the gender balance agenda, with companies accessing a wider pool of external talent from which to source female candidates. In contrast, with comparatively fewer senior, suitably developed and readily available female executives in the market, these leaders are often required to come from within, and nurturing home-grown female talent requires significantly more focus and investment over a number of years.

So, what is the gap in key functional roles? 

Heidrick & Struggles’ analysis of the gender balance in executive-level functional roles in Europe’s top 500 companies shows that there is still a large gap to surmount, particularly for the two roles most likely to sit on a board, the CEO and the CFO. The CFO role holder is also increasingly the most likely succession candidate for the CEO role, meaning that the poor representation of women in this position does not bode well for addressing the gender gap at the very top in the near term future, unless we address diversity in the CFO seat. 

With the expertise, over decades, of supporting companies to build a more inclusive culture that furthers their strategic business objectives, Heidrick and Struggles have pinpointed seven steps that firms can take to drive a more sustainable gender balance from the top down. 

1. Live the gender balance as a business imperative 

An inclusive culture is a key differentiator for a firm’s ability  to attract talent in an increasingly challenging market. Leaders must ensure that their communication is authentic, with the clear message that this is not a gender issue, but rather,  a business imperative. A clear link should be drawn between gender balance, business goals and financial performance. Moreover, this link should be communicated, reinforced and evidenced in a real way across the entire organisation for it to be believable for an incoming, or an internally developing, executive. 

2. Strengthen succession planning

Many leaders we talked to tell us that even when they felt the leadership team was balanced, the difficulty was then a lack of a robust, gender-balanced pipeline of internal talent to replace critical leadership positions as women step away. Stronger succession planning aimed at identifying and nurturing talent at the mid-to-upper levels of the organisation, particularly in the functions where gender balance is faltering, can help to ensure that these roles can be filled from within without compromising on diversity. Vodafone, Pearson, NatWest, Greencore, Centrica and Senior have all promoted females from within to become their CFO, with particularly heartening examples from Diageo promoting Lavanya Chandrashekar to take over from Kathryn Mikells, and Shell’s promotion of Sinead Gorman to replace Jessica Uhl seeing women replacing women. 

3. Consider step-up talent from the outside

Championing diversity in your organisation requires a non-traditional approach not only to the breadth of skill set, but also to the duration of tenure: instead of relying on a like-for-like CFO-for-CFO replacement, stepping up talent is a critical tool in the fight for gender parity. If you do not have a fast-track development and sponsorship program that has delivered appropriate ready-now female talent internally, look to bring this in from the outside. Dunelm, Genus, Diploma and Tate & Lyle have done just that, with first-time CFOs hired into the organisation.  

4. Be realistic about where you are on the DE&I journey

Companies need to perform a realistic assessment of how they are performing when it comes to inclusivity and achieving their diversity goals. While we have talked to many companies that are genuinely focused on gender equality, there is frustration at the slow progress in moving the needle on DE&I. An example runs through the introduction of this article; while year-on-year percentage increases are positive progress, a representational increase from 15% to 20% is still far from an equal gender split. Recognise the long journey ahead, acknowledge and intentionally action what it will take to really get there. 

5. Make sure your organisational structure is future-proofed   

While the business landscape has continuously changed, many companies still have legacy executive team structures. Some organisations have begun to take a different approach, with the focus becoming less on rigidly defined roles and requirements, and more on considering the actual talent, skills and capabilities needed in the team, resulting in an appointment that ‘looks different’ to before, yet is often even more effective around the table. Still other companies have proactively used on-demand talent, bringing in fixed term executive roles, depending upon the company’s needs now and in the future. Both approaches saw more women gaining executive experience through the use of agility, creativity and lateral thinking. 

6. Make sure your processes and policies are bias-free

All company policies should be assessed to check if they contain any inherent biases that may make it more difficult for certain groups of employees to succeed. The obvious starting point is always the HR policies, from recruitment to development or performance appraisal, however the review should look at other areas such as product development, where representation brings your products or service closer to a more diverse group of customers, or communications where it enhances how your company reaches its audience. Tackling biases and inequities consistently through your organisation is essential to inclusion and retention. 

7. Measure, plan, execute, repeat

The work of inclusivity is a continual improvement agenda. Companies should measure progress using well-defined performance indicators, and continually seek to improve and refine their policies, processes, communication and documentation to ensure they are committed to achieving a more equal and diverse workforce. 

All progress is positive, and the representation of women in the boardroom is undeniably gaining ground, however, this is the time to refocus on continuing that acceleration. We can use this progress as a galvanising cry to accelerate further – towards full gender equality, with impact.