Why it pays for companies to free female employees from the baby trap

This is an extract from an article originally published in Ethical Corporation magazine. Read the full article.

There is growing representation of women on company boards in the UK, with women making up 43.4% of FTSE 100 boards, and 42.4% of FTSE 250. While this offers an optimistic narrative, it masks a deeper issue: the stagnation of women in executive director roles, as opposed to non-executive directorships.

Systemic barriers to women’s career progression persist.

Despite progress in board appointments in the UK, our research shows that the number of female executive directors has stalled at 81 over the past two years, with only 76 FTSE 350 companies having any female executive directors. This isn’t only an issue for the UK. Just 52 companies in the S&P 500 and 25 in the Euronext 100 have female executive directors, highlighting the global challenge of achieving gender equality in senior leadership.

This is despite a growing body of evidence that points to how it’s not simply an issue of equality, but the particular contribution of women to business performance. New research suggests organisations with more C-suite women are more profitable, more likely to engage in socially responsible practices, and more committed to the customer experience.

The CFO role, traditionally a finance-focused position, has evolved into a broader strategic leadership role, increasingly seen as a stepping stone to the CEO position, with 23% of FTSE CEOs having previously served as CFOs. Yet, women remain under-represented in this critical role.

In FTSE companies in the UK, the CFO is typically one of the two executives, alongside the CEO, who sit on the board allowing direct influence on strategic decision-making and ensuring financial insights are integrated into governance. Across the FTSE 350, women hold 22% of CFO positions (compared with 18% in S&P 500 companies, and 21% for Euronex 100).

While the number of female CFOs in FTSE 350 companies have slowly increased, this progress occurred against a backdrop of high turnover: in 2023, there were 57 CFO transitions in FTSE 350 companies, but only 11 of the new appointees were women. FTSE 350 companies are clearly demonstrating their preference for men, with 80% of CFO appointments going to male candidates.

To understand why women are overlooked for senior leadership roles, we interviewed 18 female FTSE CFOs and senior finance executives. Despite their success in achieving the CFO role, the women we spoke to faced significant barriers, particularly at the intersections of gender bias, maternity leave and workplace culture.

While their hard work, resilience and strategic career moves were clear, systemic issues – including male-dominated environments, maternity bias and exorbitant childcare costs – continue to hinder women’s progress and push many out of the workforce.

Gender diversity remains  a strategic imperative for business and key to a growth agenda

The loss of talented women at mid-career levels not only affects individual women’s financial outcomes; it also limits organisations’ access to diverse talent, and stifles economic growth and innovation.

While progress has been made in increasing female representation on corporate boards, significant barriers remain in achieving true gender equality across organisations. The stagnation and recent decline of female representation in executive level roles highlights the persistence of gender bias, structural inequalities and the societal expectations placed on women, particularly around motherhood and caregiving, all of which contribute to a leaky pipeline.

Addressing this issue isn’t just a win for women – it’s a strategic imperative for businesses, and a catalyst for economic growth.