To really move the dial on gender diversity, companies should focus on key interventions, says Lorna Fitzimons…
Recent coverage of the BBC’s gender pay gap data reignited the debate on women in senior roles. So how do transport companies stack up on gender diversity?
The Pipeline looked at FTSE 350 companies which transport goods or people on road, rail, air or sea and the results were generally disappointing. Women Count 2017, the most comprehensive report on the number, role and value of women executives in the FTSE 350, found just 13 per cent of these companies have executive committees (EC) which are at least 25 per cent female.
It’s true that we also found 50 per cent of women executives in these companies are in roles with profit & loss (P&L) responsibility. On the surface it looks like these companies seem to be bucking one trend. Delve deeper and there are two key points that stand out. Firstly, the baseline of women executives, and thus those in P&L roles, is very low so this is simply showing a move in the right direction. Secondly, take out companies with female CEO’s (Easyjet and Royal Mail) and those running airlines and there are no female executives at all. But, does it really matter?
It certainly does for the rail industry. Huge infrastructure investment is happening, as well as on the horizon, and the world’s rail supply is expected to grow by 2.7 per cent1. With the UK rail companies facing an aging population, a skills gap is looming. Attracting more women to the industry will help companies address this.
In addition, Women Count 2017, like other noteworthy studies by the IMF and McKinsey2, confirmed there is a positive correlation between women in senior roles and business performance. Profit margins are almost double in companies with at least 25 per cent females on their executive committee compared to those with none3.
Also, if all FTSE 350 companies performed at the same level as those with at least 25 per cent females on their EC, the impact could be a £5 billion gender dividend for Corporate UK. In this low growth economy and with Brexit still looming, most companies would relish getting their share of that gender dividend.
Focus on key interventions
There are now more industry-wide and company initiatives, for example by Women in Rail, Crossrail and Network Rail, actively trying to change the image girls and women have of rail. However, these positive steps are only part of the answer. To really move the dial on gender diversity, individual companies should focus on key interventions: starting at the top, addressing the ‘attainment’ trap, recognising risk aversion, CEO’s owning the issue, setting targets publicly and championing sponsorship. Let’s look more closely at the first three.
The most important first step is to increase the number of women in the most senior roles. Nearly half of female executives feel a lack of role models holds them back4 and reduces their willingness to go for promotion5. It can even be a factor to them leaving the organisation.
Refreshingly, once you have more women in senior roles, the figures show that women promote women. An FTSE 350 company with a female CEO has on average almost twice the number of women on its executive committee. This means that if companies increase women in senior roles they get two benefits simultaneously; more role models for women in middle management as well as the role models themselves growing talent internally.
The attainment trap is based on the understanding that women are promoted for attainment and men for potential6. This general environment causes many women to overvalue becoming a subject matter expert and develop great attention to detail but failing to demonstrate capabilities which are key to future career success; such as developing strategic networks, building a strong personal brand among decision makers and having the support of sponsors.
Failure to progress means that women have few female role models to learn from which links back to the importance of women in senior jobs. This leads women to believe that they themselves will not succeed hence the retention problem. It also relates the next barrier – risk aversion. Because women are appointed for attainment, it means they have a tendency not to go for jobs they are qualified for and employers are more risk averse at appointing women than men which, in turn, suppresses the pipeline. To resolve this barrier, risk aversion needs to be understood and addressed, otherwise nothing will change.
Rail companies may think they are different but other companies in sectors with a macho image are achieving their gender diversity goals. Thames Water Utilities has recently promoted its third woman onto its executive committee and E.ON has three women on its UK EC. Easyjet led the way in airline companies with five women on its EC. It will be interesting to see which rail company will be first to seize this business opportunity and be at the forefront of the UK economy.
Lorna Fitzsimons is CEO and co-founder of The Pipeline
1. Women in Rail 2015: Industry Survey
2. IMF (2016): Unlocking Female Potential in Europe and McKinsey & Company (2015): Diversity Matters
3. The Pipeline (2017): Women Count
4. Catalyst (2004): Women and Men in US Corporate Leadership, 2004
5. MWM Consulting (2014): Cracking the Code – Getting more women into senior executive roles a blueprint for practitioners
6. Denise Kingsmill (2001): Review of Women’s Employment and Pay