Gender Diversity in the Marketplace

The latest research by The LCap Group on gender diversity within boards at exit within private equity (PE) backed organisations reveals a stark disparity in the representation of women in key executive roles. This analysis delves into the rates of female executives across various functions, providing a detailed examination of the underlying trends and the broader implications for the PE sector and corporate governance.

In the UK's PE marketplace, women represent 17% of all executives. This figure is emblematic of the broader issues of gender inequality in the business world, especially in high-stakes, high-impact positions. When disaggregating this data by role, the disparities become even more pronounced:

• Chairs: Only 2% of chairs are female, translating to a ratio of one in fifty. This is particularly concerning given the chairs' critical role in setting strategic directions and overseeing the entire board's function.

• CEOs: As the face of their companies and primary decision-makers, only 7% of CEOs are female, or one in fourteen. The CEO role is pivotal for shaping the company's culture, strategy, and financial success.

• CFOs: Women hold 13% of CFO positions or one in eight. While slightly better than other roles, the CFO's crucial influence on financial stewardship and strategic fiscal planning remains predominantly male.

• Technology Leaders: In a sector critical for future-proofing businesses and driving innovation, only 5% of technology leaders are women, approximately one in twenty. This underrepresentation in technology leadership is especially significant given the increasing importance of tech in all sectors.

• Revenue & Marketing Leaders: These roles, critical for driving business growth and customer engagement, have a relatively higher representation at 16% female, or one in six. While better, it still reflects a significant gap.

• HR Leaders: This is the only function where women are significantly represented, holding 71% of these positions, or three in four. The high percentage of women in HR roles suggests that traditional gender role stereotyping may still influence career paths.

• Operations Leaders: Women, or one in twelve, hold 8% of these roles. Operations leadership, crucial for overseeing the daily functioning of businesses, continues to see low female participation.

These statistics reflect a broader issue within the private equity industry and its backed organisations, where gender diversity at the executive level is a matter of social equity and business efficacy. Numerous studies have shown that diverse boards and leadership teams can enhance decision-making processes, foster creative solutions, and mirror the gender composition of customer bases and lower-level employees.

The underrepresentation of women in these high-ranking roles may stem from several systemic barriers:

• Cultural Norms and Biases: There remains a persistent bias against women's capabilities in leadership, often exacerbated by a lack of visible role models.

• Network Effects: Executive positions are frequently filled through networks that are traditionally male-dominated.

• Work-Life Balance Challenges: The demands of top executive roles are often seen as incompatible with traditional family responsibilities, which disproportionately affect women.

For further reading you may find the following links interesting:

1. https://carolinecriadoperez.com/book/invisible-women/

2. The state of diversity in global private markets: 2022 | McKinsey

3. Do women investors think differently to men? | Lombard Odier

4. https://www.maryannsieghart.com/the-authority-gap/