Why are there so few women running Britain’s biggest companies?

Women make up 49% of the UK workforce over the age of 16. Yet of the 100 chief executive officers (CEOs) currently running the country’s largest public companies by market capitalisation (FTSE 100), only ten are women.

There is a lack of diversity among UK CEOs across race, class and education (Equality Group, 2023). However, the lack of diversity is greatest for women.

Figure 1: Women in CEO positions in large companies in developed countries (%)

Source: Data collected by the European Institute for Gender Equality (EIGE) since January 2017 and previously by the European Commission.

Note: Data is based on the percentage of women CEOs at the time of the annual Fortune 500 list release.

The current percentage marks an improvement from 2020, when there were more CEOs named Peter than women.

Progress has also been made on boards, where women now make up 42% of the boards (FTSE 2024 Women Leaders Review). However, board representation has not yielded the same progress on executive committees, where women hold only 30% of positions.

The barrier to women entering the C-suite (the highest management positions in a company) has been dubbed the “glass ceiling.” Why does it exist and what can be done about it?

The Business Case for Women CEOs

Studies conducted by consulting firms and financial institutions have shown that companies with female CEOs perform better, but these results are not rigorous (Jeong and Harrison, 2017; Edmans, 2018).

Peer-reviewed meta-analyses across countries have found a statistically significant positive correlation between female CEOs and business performance. However, in reality, this effect is very small (Pletzer et al., 2015; Post and Bryan, 2015).

In other words, female CEOs don’t dramatically improve a company’s bottom line. But they don’t hurt it either. If gender has little impact on a company’s bottom line, why are there so few women in top jobs?

Why are there so few women in CEO positions?

Prejudice

One potential reason for the lack of women in CEO roles is the stereotype that men are inherently better suited for the job. Prejudices about women can result in discriminatory behavior in the workplace and can disadvantage women in hiring decisions.

Society has established ideas about the characteristics of men and women. For example, stereotypical feminine characteristics include empathy, kindness, and loyalty, while stereotypical masculine characteristics include competence, competitiveness, and dominance (Heilman, 2012). These masculine characteristics are positively associated with leadership.

Moreover, when women exhibit masculine traits, they are perceived differently than men (Eagly & Carli, 2007). Assertiveness is seen as a positive trait in men but a negative one in women, unless they can also demonstrate the expected communal behaviors of women (Heilman & Okimoto, 2007).

When female CEOs express anger, their competence is reduced. But for men, perceived competence either increases or remains the same (Brescoll and Uhlmann, 2008). This suggests that the corporate world is “androcentric,” with the male perspective central (Bailey et al., 2020).

The “double bind” expresses the idea that women must walk a tightrope while exhibiting opposing traits. They are expected to be feminine, but not too feminine in dress, language, and tone of voice (Oakley, 2000).

Women face a vicious cycle. If they adopt a typically masculine language style, they may be perceived as aggressive, but if they are too feminine, they risk lacking authority (Coates, 2015).

The Gender Difference in Self-Confidence

Research reveals that women are more likely to avoid competing for promotion than men due to their different approach to competition and different levels of self-confidence (Niederle and Vesterlund 2011).

Lack of confidence can cause women to shy away from competing for higher positions: Among MBA holders (the standard postgraduate qualification in business), 12% of women aspired to a board position five years after graduation, compared with 22% of men (Weiser, 2021).

This gender confidence gap is created early in life through societal expectations, experience, and culture. This lack of confidence causes evaluators to form overly pessimistic beliefs about women (Exley & Nielsen, 2024). This creates a vicious cycle, as women may internalize this pessimism and become less confident.

Networks

In 2023, 77% of new CEO appointments were internal hires (Forsdick, 2024). Boards and CEO selection committees favor candidates they know and who have deep knowledge of the company.

This practice increases trust between the CEO and the board, as seen in reduced board monitoring when network ties are present (Fracassi & Tate, 2012). These ties include serving on the same charitable boards, attending the same colleges, and playing golf at the same clubs.

Women are less likely to receive work-related help from their informal networks (McGuire, 2002). One example from popular culture that highlights this phenomenon is the American sitcom Friends when Rachel starts smoking so as not to miss business conversations during her cigarette breaks: she gets a promotion as a result.

Type-based mentoring pairs junior employees with senior employees who are similar in gender and race. This mechanism mimics natural social networks, in which people tend to communicate better when they have common interests and experiences (Athey et al., 2000).

Most senior leaders are men, so there are fewer female mentors. As a result, women do not gain the same human capital that mentoring provides. The exclusion of women from informal networks may partly explain why the majority of CEOs are still white men.

Pipeline: Commercial and Functional Roles

The traditional path to the C-suite is to complete a business-related degree, which is dominated by men, and then pursue an MBA (Murray, 2023). Women who complete this path often end up in functional positions, namely human resources (HR) and marketing, while CEOs are drawn from commercial roles (Pipeline, 2023).

Women make up 71% of HR employees, in part because of the perception that women possess the soft skills needed for these positions. In addition, in the workplace, women do more work that is defined as “non-promotional.” This can include training new employees, taking notes in meetings, and even organizing office parties (Weingart et al., 2022).

The penalty for motherhood

Women aged 16-24 make up about 50% of managers. However, as they enter their most common childbearing years (between 25 and 44), this share drops and never fully recovers.

Having children delays or stops women’s career advancement, but why?

Figure 2: Proportion of women in management positions in the UK by age

Source: Proportion of women in management positions, UK, 2012–2022, Office for National Statistics (ONS)

Having children affects women’s but not men’s earnings (Kleven et al., 2019, 2023). The earnings gap may be partly attributable to career interruptions and differences in hours worked (Bertrand et al., 2009).

These differences occur because women do most of the unpaid work, including childcare, housework, and caring for other family members. This additional work makes women less flexible workers.

The 2023 Nobel Prize winner in economics, Claudia Goldin, shows that male workers’ advancement to seniority is due to long working hours and constant availability (Goldin, 2014). Motherhood restricts women from this style of work.

Figure 3: Average hours of unpaid work done per week by age and gender in the UK in 2015

Source: Harmonised European Time Use Survey, UK, 2015, ONS

Figure 4: Percentage of employed people aged 16–64 who worked full-time and part-time, by gender

Source: Full-time and part-time work, UK, 2023, ONS

In addition, women are less likely to be employed if there is an expectation that they will take maternity leave (Booth, 2023). There is a bias that women who take time to have children are less committed to their careers or are less reliable employees (Arena et al., 2022).

This bias results in a lack of investment in women of childbearing age, which creates a gap in the recruitment process for women to CEO positions.

What can be done to solve this problem?

Both businesses and government can take steps to help close this gap.

Fighting the Motherhood Penalty

The UK government is making the largest investment in childcare in history. Reducing the cost of childcare allows women to return to work sooner, reducing the loss of human capital (Casarico, 2023).

However, monetary intervention alone is not enough. For example, in Denmark and South Korea, the motherhood penalty persists despite extensive monetary intervention (Kliff, 2018). Challenging implicit biases and adopting flexible work practices can have a positive impact on combating motherhood bias (Fox and Quinn, 2015).

From the board to top management

Increasing the number of women on boards of directors has a positive impact on the number of women in management (Matsa and Miller, 2011). Women help women in a variety of ways, including through hiring preferences, changing the company culture, and acting as role models.

In the UK, increasing the number of women on company boards has been done on a voluntary basis, while some European countries have set formal quotas.

Table 1: Quotas Requiring Women to Serve on Boards

Source: Share of women on the boards of the largest listed companies in 2010–2022, OECD; summaries of amounts are available at FTSE 2024 Women Leaders Review.

The UK’s approach has included funding three independent reports on women in FTSE 100 companies. The visibility of the issue has prompted the industry to act, with the UK now performing at a similar level to countries with quotas.

Figure 5: Share of women on the boards of the largest listed companies in developed countries (%)

Source: Share of women on the boards of the largest listed companies in 2010–2022, OECD

This FTSE Women Leaders Review Data from 2024 shows that 40% of new management positions will be filled by women (FTSE Women Leaders Review2024). More and more women are entering the industry, normalizing their leadership. While gender equality among CEOs is a long way off—it is estimated to take 76 years—progress is being made (McCulloch, 2023).