Turning numbers into names: how to break the gender stalemate on boards

This week, we launched the EY-Cranfield University Female FTSE Board report. The good news is the FTSE 100 and FTSE 250 have largely met the overall 40% target set in February 2022. The not so good news? I find myself reflecting on the same challenges that I raised last year.

Women still only hold nine CEO positions in the FTSE 100, and the overall increase in executive roles is marginal at 16.8%. For the third year running, the FTSE 250 has seen no change in the number of executive directorships held by women (47).

What this means is that female representation on FTSE boards remains a numbers game; the replacement of one female Chair or CEO changes the picture drastically. It’s already been announced that the number of women in FTSE 100 executive roles will drop from 36 at the time of reporting to 34 by the end of the year, which demonstrates this instability.

While targets have undoubtedly driven change, I question the value of setting new ones going forward. The data from the EY-Cranfield report confirms that meeting targets does not necessarily drive the long-term behaviours we are seeking to improve the diversity of boards - and ultimately more robust decision making.

Companies have been given the opportunity to demonstrate progress and have largely chosen compliance over disruption. The result of compliance is surface level gender diverse numbers without the distribution of power required for true gender equality.

Many boards still lack a strong pipeline of female talent and robust executive succession planning that is the heart of the solving the issue of gender parity. The result is a ‘two steps forward, one step back’ outcome every time a woman CEO or Chair is replaced, often by a man. It’s unsustainable. Last year I discussed the importance of robust and intentional management of the executive talent pipeline. This year I’m sharing practical recommendations to help break the gender stalemate.

Since EY announced our gender and ethnicity Partner targets in 2019, we’ve focused on building a strong pipeline and robust executive succession planning process. Those actions will not only radically accelerate the diversity of the Partnership and ensure that it is sustainable in the long term, but put us in the best position to deliver the distribution of power required for true gender equality.

In the UK and Ireland, we have a succession plan for our top 57 most influential leadership roles. By requiring 40% female representation on the ‘succession slate’, we provide differential investment for those women. We adopt the same approach for our Partner pipeline to sustain this progress.

From my perspective, there are three steps that will help to diversify the executive. Companies should start with individual accountability, driven from the very top. Second, moving away from the numbers game requires turning the numbers into names and challenging outdated assumptions. Finally, differential investment for women means the pipeline can sustain and nurture the female talent needed for business success and true gender equality.

Here’s how it works:

1.??????Individual accountability

One or two individuals (board members) need to hold ultimate responsibility for the diversity of the pipeline and succession slate. What this means in practice is that key decision-makers must answer to the Chair (or equivalent) on female representation.

Business leaders must be equipped to justify their pipeline and succession slate and take remedial action where diversity data is unsatisfactory or where questions remain. This process personalises the talent pipeline.

2.??????Turn numbers into names

I believe that personalising the talent pipeline helps to retain female talent. In practice, our business leaders are required to name those in their pipeline, justify their projected progression and confirm that an adequate career plan is in place.

Having a name on each pipeline and succession spot ensures that the decision-makers engage with female talent on a personal level, disrupting any default gender-biased assumptions. It also ensures that they can receive differential and tailored investment.

3.??????Differential investment

EY’s differential investment in women in the pipeline and on the succession slate, provides the required ‘career capital’ to counteract gender inequity, as research indicates men are more likely to receive ‘career capital’ informally.

Access to sponsorship at the pipeline level tells our women that we recognise these inequities - it also demonstrates that we are committed to rectifying this. When it comes to Partner appointments, our female talent is equipped and equitably championed through the process. For succession planning, differential investment seeks to remove the politics and disrupt the leader archetype. It takes the form of ongoing engagement, including encouraging women to redefine the role and make it their own.

Concluding remarks

Personalisation of the female Partner pipeline is a key enabler for EY in our ambitions to meet and sustain our female Partner target. Beyond targets, positive intent and programmes, companies need their leaders to get into the detail, including an understanding of the ambitions, opportunities and individual stories of future women leaders and making someone accountable for their career outcomes.

This year I want to challenge all businesses to apply robust strategies to executive succession planning and commit to gender equality at every level, to ensure that women aren’t just represented at the top but that they also have equal access to the positions of greatest influence.

The challenge is really to distribute power more equitably across a board that is more representative of society - talented, qualified people from a diverse range of ages, backgrounds, gender, and ethnicities, who might otherwise be overlooked. I’m focusing here on women, but I absolutely support diversity in its broadest sense.

I look forward to having a different conversation next year.?

Read more:

Alarming lack of women in executive roles despite FTSE 350 improving boardroom gender diversity (cranfield.ac.uk)