New research shows companies with female leaders outperform those dominated by men

A new report released by the House of Commons has revealed that companies with a higher percentage of female leaders, outperform those dominated by men. The research states that women should play a major role in the UK’s post-pandemic economic recovery.

As a part of the study, data was collected from the House of Commons library. It cited McKinsey research, highlighting that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the bottom. Plus, research from academics from the Universities of Glasgow and Leicester showed that companies with more than 30% female executives were more likely to outperform companies that don’t.

The data also revealed that women-led SMEs contribute roughly £85bn to economic output, but research shows that only 16% of small business employers and one in three of entrepreneurs are women. It also presented evidence that fewer women are granted access to financing and business loans, with just 15% of bank financing applications and 22% of new primary business bank accounts openings coming from women.

The shadow secretary for women and equalities, Anneliese Dodds, has accused the government of not doing enough to balance the gender inequality in the workforce, especially following the coronavirus pandemic.

Speaking to the Guardian, she stated, “When you’ve got more engagement from women, when women are in the driving seat to the extent they should be, it makes for far more successful businesses.”

She also argued that the data reveals women hold the key to a boost in our economy, but were being hindered by a lack of investment and childcare pressures. Dodds warned that the UK was facing a “childcare emergency” with early years settings struggling to recruit staff and the Early Years Alliance reporting that some areas of England have seen a 25% decline in the number of places in the past six years.

“The childcare sector is facing a short-term emergency, seeing childcare deserts in different parts of the country, with providers going bust and not being able to continue operating – that has an awful impact on working women,” said Dodds. “Childcare providers are part of our economic infrastructure, we have to find a more sustainable way forward.”

Women in leadership

Currently, just eight women, and no women of colour, are employed as CEOs in the FSTE 100. Furthermore, women hold only 14% of executive directorships, and 38% of all directorships, according to a report by the Fawcett Society 2022.

In the UK, women comprise only a fifth (20%) of executive team members, 13 companies (6%) have a female CEO, and 27 companies (13%) have a female CFO.

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