Women on boards ‘increase profits tenfold’

COMPANIES with more women on their boards bring in 10 times greater profits, a study has suggested.

The research found that executive committees whose makeup was more than a third female had a net profit margin of 15.2 per cent, while those with none made just 1.5 per cent.

The report, Women Count 2020, claims that this gap is costing the economy a potential £47billion of pre-tax profit. Lorna Fitzsimons, co-founder of The Pipeline, which commissioned the report, said firms that were more representative had a “better understanding of clients and customer need”.

Diverse teams tended to be better at “problem solving and have a better collective intelligence”, the former Labour MP for Rochdale added. The report claimed a refusal by businesses to change the gender dynamic at the top of their organisations had created an “almost hostile” environment for female leaders.

It found that, as of April 17, there were more CEOS named Peter than there were women, with just 13 female leaders of FTSE 350 firms. While female membership of boards was up by 2 per cent from last year, there were “worrying signs amid the green shoots of progress”, including “huge female under-representation” in the position of chief financial officer – with 84 per cent in FTSE 350 firms being men.

In a foreword, Theresa May called on businesses to “act now” to “make the most of every talent”. The former prime minister added: “You need to have a healthy pipeline of female talent running right through an organisation. That means identifying and removing barriers.” Mrs May called on ministers to “create a regulatory environment which promotes good business”.