Partner Article

Getting women to the top

For over 100 years, International Women’s Day has celebrated the economic, political and social achievements of women around the globe. During this time, giant steps have been made towards gender equality, but there is no doubt that more still needs to be done to redress the balance, especially in the business sphere.

While increasing numbers of women are rising up the ranks to top positions, women in executive posts are still few and far between. According to McKinsey & Company, women make up just 12.5% of FTSE 100 boards, and are paid on average 10% less than their male counterparts.

This lack of strong female representation at board and top management level is concerning, as intelligent, capable women are being sidelined by their male counterparts. Evidence suggests that companies which promote female representation perform better than those without, and gender-diverse boards have a positive impact on performance. So if this really is the case, why aren’t there more women in business?

Research by consultancy firm Mercer shows that women more than men move in and out of the workforce, often due to childcare responsibilities. Following this, employers often see them as being less experienced than their male counterparts.

Furthermore, the presence of occupational segregation often means that women miss out on the highest paid positions. HR and Marketing are female-dominated areas, and are perceived as being less critical to key functions, which often results in women under-performing when it comes to pay awards.

According to Sophie Black, principal in Mercer’s Executive remuneration team, education must play a major part in redressing this balance.

She commented: “If men and women are encouraged to think that everything is within reach, then occupational segregation will be undermined and companies will see a much more diverse workforce.

“This can be a huge bonus to companies as it widens their talent pool, reduces turnover and absenteeism and increases innovation and creativity.”

Dr Pooran Wynaczyk, professor and director of the Small Enterprise Research Unit at Newcastle University Business School believes that headlines focusing on gender imbalance can mask advancements which are being made, which is discouraging women from reaching the highest positions in business.

“Throughout history women have always contributed to innovation, and negative perceptions and stereotypes are putting off future female businesspeople.

“Role models are incredibly important as they allow individuals to showcase their achievements and can encourage more girls to get involved in business - especially in areas such as science and technology which have traditionally been associated with men.

“While there are opportunities for businesses to raise aspirations, they often lack coherency, and universities, communities and businesses now need to establish a joined up approach to getting more girls into business.”

While women are undoubtedly under-represented in the corporate world, figures on entrepreneurship indicate that increasing numbers of women are channeling their knowledge and skills into starting a business.

There are around 620,000 majority-women owned businesses in the UK, which generate a turnover of £130 billion annually. Indeed, if women started up businesses at the same rate as men, there would be an additional 150,000 extra start-ups each year.

Heather Jackson, the founder of the “Inspirational Journey” programme which advise women on progressing their careers, believes there are a number of key factors which dissuade women from setting up on their own.

“There are three reasons why women don’t set up their own business - lack of confidence. doubt in their capability or just not enough key contacts.” She said.

Would-be entrepreneurs should not be put off by these factors and should instead look towards the potential impact they could have by developing their ideas into a viable business proposition. Women starting up in business tend to provide a more immediate economic contribution than men - with one in five coming into self-employment from unemployment compared to around one in fifteen for men.

Indeed if this statistic is anything to go by, women in the North East are beginning to use their initiative by establishing their own businesses. Over a million women in the UK are out of work, and our region has been hit hardest by job cuts. Nonetheless, figures also show that female entrepreneurship is actually on the rise, especially in the North East.

In the region female entrepreneurial activity compared to male activity has increased by 58% - something which Lorna Moran, Vice Chairman of the Entrepreneurs Forum believes should be actively encouraged. Belief in the potential of female entrepreneurs is so strong at the Forum, they are hosting a conference to inspire business leaders to think bigger and provide them with the experience they need to grow.

She added: “The success of our region its people having ambition, and inspirational women of influence can be found in various sectors at all levels.

“The route to success isn’t always a conventional one and often lies in having the courage to have self-belief, taking acting and seizing opportunities.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .