The Gender Pay Gap in Britain’s Boardrooms
It’s high time men and women are paid equal wages across all sectors.
According to new research by New Street Consulting Group, female board members at the UK’s biggest companies are being paid 40% less than their male counterparts. The average pay for FTSE 100 female directors is around £237,000 vs £875,900 for men. For executive board members, the average income for women was £2.5m for men and £1.5m for women.
The figures show a stark contrast in the gender pay gap to the broader job market, where women were paid 15.5% less than men, according to data from the Office for National Statistics from 2020.
The large pay gap in boardrooms is because 91% of female directors at FTSE 100 companies have non-executive roles. According to Claire Carter, director at New Street Consulting Group, having female directors in non-executive roles can undercut a company’s efforts to offer female role models if there is limited interaction outside the boardroom. Women need to be provided training to prepare them for taking on more executive responsibility. Also, the allocation of women to suitable assignments and projects is essential to the process, according to Ms Carter.
This year’s final update on the Hampton-Alexander review, which analyses female representation at the top of business, its target of reaching 33% of board positions at FTSE 100 and FTSE 250 firms being held by women by 2020 has been achieved.
The number of female directors at FTSE 100 firms has increased over the last five years. However, there is much more to do. Solely focusing on the percentages of directors that are women is insufficient when trying to reach equality.
Having women hold executive roles also affects financial performance. The Financial Report Council approximated that at least one woman on the board could increase stock prices and higher profits.
Next Up, In Conversation With Financial Feminist Tori Dunlap