The growth is significant, as the organization discovered that 90% of CEOs at the country’s largest companies have risen through one of these roles.
Women are increasingly being appointed to key roles that often lead to the CEO position, but they remain underrepresented at the very top of British corporations.
According to new research by 25×25, an organization dedicated to increasing female representation in senior roles, women now hold 23% of positions such as chief financial officer, chief operating officer, divisional head, or CEO across the FTSE 100. This marks a rise from 16% in 2021.
This increase is significant, as the organization points out that 90% of CEOs at the UK’s largest companies have come up through these roles. However, despite the progress, only two out of 17 CEO appointments in the FTSE 100 between June 2023 and June 2024 were women.
The research underscores the ongoing challenges for female executives. Currently, only nine women lead FTSE 100 companies, a decline from a peak of 11 earlier this year.
“The pathways to CEO are unbelievably narrow,” said Tara Cemlyn-Jones, a former investment banker and current head of 25×25. “The vast majority of potential candidates have developed their skills and experience in very narrow, siloed roles.”
Cemlyn-Jones, whose organization includes public and private companies from various sectors such as NatWest Group, BP, Unilever, and BAE Systems, advocates for a more flexible approach to evaluating candidates’ experience. She believes this shift would help more women reach the top.
The UK is not alone in this issue. Research from Bloomberg Intelligence reveals that only 6% of CEOs globally are women, with figures ranging from 3% in emerging markets to 8% in the US and Europe.
“Women have made little progress in the C-suite,” said Adeline Diab, Director of Research and Chief ESG Strategist at Bloomberg Intelligence. “Three in four companies still have no women in C-suite positions.”
According to this year’s FTSE Women Leaders Review, women hold 35% of leadership roles across the top 350 UK companies. However, Pavita Cooper, UK Chair of the 30% Club, which advocates for greater female representation on boards, argues that this statistic “masks the truth.” She points out that many of these women do not manage significant parts of the business that would put them on the path to the CEO role.
One challenge is that certain stakeholders, such as board members and headhunters, can act as an “inadvertent drag” on women reaching the CEO position, instead favoring candidates similar to the current executive, Cemlyn-Jones noted.
“I think boards in the UK are becoming more and more risk-averse,” said Chris O’Shea, CEO of the £6.6 billion energy company Centrica. “Some of that is being driven by the governance rules we have.”
What Bloomberg Intelligence Says:
Women have made slow progress in the C-suite, but momentum may be building, with recent appointments of CEOs at S&P and HKEX, and CFOs at HSBC and Ford. Although qualified women candidates exist, more effort is needed to help them break the glass ceiling – Adeline Diab, Bloomberg Intelligence.
Recruiters also play a significant role in selecting CEOs in the UK, as half of FTSE 100 companies hire external candidates for the top job, compared to just a fifth of large US companies. This creates a direct disadvantage for women, according to 25×25’s research, as headhunter fees are often tied to the incoming CEO’s salary. Since men typically command higher salaries, this can unintentionally incentivize headhunters to prioritize male candidates.
The UK’s focus on recruiting CEOs externally is particularly problematic for women, suggesting that boards lack confidence in their own internal succession planning, 25×25 found.
Efforts to improve C-suite diversity could face challenges globally, especially with the incoming US President Donald Trump, who has promised to dismantle diversity, equity, and inclusion initiatives as part of his broader agenda to end “wokeness” in America.
However, research from Bloomberg Intelligence shows that companies with more women on their boards have delivered 2% to 5% higher returns in developed markets. These findings could help keep diversity initiatives on the agenda for companies, despite potential headwinds.
“The financial performance linked to diversity highlights its benefits and may serve as a strong counter-argument to any anti-woke rhetoric,” Diab said.
