Over the years, a combination of Government backed voluntary targets, shareholder pressure and industry initiatives have resulted in significant improvements to gender equity in the boardrooms of listed companies. In 2024, it was reported that 42% of FTSE 350 directorships were held by women, compared to 26% in 2015. By contrast, only 18% of SMEs were led by women in 2022, a statistic which hasn’t changed since 20151.
The advantages of having a more equitable workforce have been well documented, with evidence from McKinsey’s Diversity Wins report suggesting 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 fourth quartile2. Similarly, the Alison Rose Review of Female Entrepreneurship states that up to £250bn of new value could be added to the UK economy if women started and scaled new businesses at the same rate as men3. So, what is causing the stagnation of gender parity within small to mid-market businesses and how do we overcome it?
We take a look at why there are still so few female leaders running mid-market businesses and speak to women in business to understand what needs to be done to enable them to progress. Evidence suggests that while there are more female-founded start-ups, less of these progress to more established businesses, relative to the overall population, so we also explore what the barriers are for female entrepreneurs to grow their businesses. The GEM 2024 global report shows the entrepreneurial inequality between men and women is much more prevalent in those owning established businesses than in those starting new ones4. So, what prevents growth and progression?
We conducted a survey with 101 female business leaders to explore these issues and a staggering 100% of our survey respondents said they had experienced some form of gender bias in the workplace, with 95% saying this impacted their career in some shape or form. In the sectors we surveyed, overt sexual harassment appears to be on the decline, although worryingly 17% of respondents have experienced this. More subtle forms of discrimination are much more prevalent, including gender stereotyping (26%), role assumptions (25%) and micro-aggressions (24%). Sometimes these attitudes are unintentional, sometimes not, and it’s worth noting can be perpetuated by both men and women. Whatever the intention, discrimination is undoubtedly having an impact on women in business, with 37% saying it had made them lose confidence in their abilities.
Diversity, in all forms, increases business performance and protects against ‘groupthink’. The findings in this report are a call to arms to us all to work together to level the playing field and make our businesses stronger.
1 FTSE Women Leaders Review: Achieving Gender Balance, FTSE Women Leaders, p.27
2 Diversity Wins: How inclusion matters, McKinsey & Company, p.8
3 The Alison Rose Review of Female Entrepreneurship: Progress Report, NatWest, p.3
4 GEM 2023/2024 Global Report, Global Entrepreneurship Monitor