Lack of diversity in UK executive pipeline points to slow progress for female CEOs

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A lack of women in positions from which FTSE 100 chief executives are typically recruited means underrepresentation in top corporate jobs is set to continue, even at companies that employ a large proportion of women overall according to new research.

Research by the 25×25 initiative, which is backed by companies including Unilever, BP and Morgan Stanley International, found that women account for only 19 per cent of FTSE 100 divisional heads — the position that 44 per cent of current FTSE 100 chief executives previously held.

The campaign, which was founded to help tackle the lack of female senior executives in the UK, also found that 19 per cent of chief executives were formerly CFOs and 14 per cent came from operations and supply, while women make up just 25 per cent and 21 per cent of those roles, respectively.

Currently, there are only nine female chief executives in the FTSE 100, or 9 per cent, a figure substantially lower than 35 per cent of MPs, 47 per cent of permanent secretaries and 42 per cent of judges that are women.

“Executive gender balance is a great indicator of how robust an organisation’s succession and talent planning is, because women account for almost half the working population,” said Tara Cemlyn-Jones, chief executive of 25×25.

She added: “If no woman is getting through to a senior decision-making position, this suggests a structural or cultural issue.”

The 25×25 initiative wants 25 female chief executives in the FTSE 100 by 2025, and after that a quarter of the wider FTSE index of listed companies.

The group’s “Pathways to CEO” analysis of 300 organisations found no correlation between the number of women in an organisation and the number of women in the kind of senior executive positions that often precede chief executive appointments.

“This suggests that the concept that talented women will ‘bubble up’ into senior positions by virtue of volume is unfounded,” 25×25 said.

The research also shows that 13 per cent of current chief executives held the same job elsewhere beforehand, while no female chief executive in the FTSE 100 previously occupied the role at another company.

Companies are increasingly looking within their boardroom when picking a new chief executive, with consumer goods group Unilever, retailer John Lewis, financial services provider Hargreaves Lansdown and telecoms operator BT all appointing a chief executive who was already a non-executive director on their board in the past year.

According to headhunter Spencer Stuart, a third of the 59 FTSE 350 chief executives who have started in their roles since January 2022 served on the board before their appointment.

A similar initiative, the government-backed Hampton-Alexander review, has aimed to increase numbers of women in the UK’s boardrooms, and reported in February that it had reached its target of women occupying two out of five board seats at FTSE 350 companies three years early.

On Wednesday, the treasury select committee will hear evidence on sexism in the city from Aviva chief executive Amanda Blanc and Bain & Co partner Nishma Gosrani, who both worked on the UK’s Women in Finance Charter.