NSCG

Female FTSE 100 directors’ pay still significantly lower than males’

23 August 2021

Our latest research found that the average pay for FTSE100 female directors currently stands at £237,000. This is 73% less than the average pay for FTSE100 male directors at £875,900.

The research shows that the gender pay gap amongst FTSE100 directors is far worse than in the broader job market, with women receiving 15.5% less pay than men.

Why does this gap exist?
The large pay gap at board-level is largely due to 91% of female directors at FTSE100 companies holding non-executive rather than executive roles. Non-executive roles tend to have a much lower remuneration than executive roles. Therefore, women are not only earning less but they are also being deprived of higher-earning jobs.

Further to this, women that do make it to executive roles still face a significant wage gap. Female executive directors earn on average £1.5m, whilst men in the same role earn £2.5m.

Whilst great progress has been made in bringing more women onto boards, this research shows there is much more to do. Focusing solely on the percentages of directors that are women is not enough when trying to approach equality.

How do we prevent gender inequality?
Most businesses want to end the old boys club that exists at the top. The key to doing that will be ensuring that women have more executive responsibilities and are trained and prepared properly for taking on that responsibility. Allocating them with the right assignments and projects is essential to that process.

NSCG can help women reach executive roles. Our leadership development professionals can identify potential leaders and develop them up the ranks to diversify and innovate your company’s talent pool.

Ultimately the catalyst for change lies with the boards themselves. It will be a case of their examining whether there are any barriers that are preventing females from reaching the very top at their organisation, and if there’s anything they can do to help overcome these.

At NSCG, our executive search and interim management specialists can assist in identifying female leaders to beneficially impact your company and make the necessary changes to allow women to reach the top.

Furthermore, our talent intelligence team can assist in widening your talent pool, identifying niche skill sets and recruiting for greater diversity.

What are the benefits of female influence at board-level?
Studies show that having females on boards has been associated with better future financial performance, including higher profits and stock market returns. A report by the FRC estimates that having at least one woman on the board could increase stock prices by 10% in just one year. This increases to 25% in five years for boards with a 33% representation of women*. Data has also suggested that a lack of gender diversity leads to inefficiencies.

It is also arguable that female non-execs would be less of a role model to other women than executive directors. Non-executive directors often have little to no interaction with the wider business outside of the boardroom. Therefore, placing women at executive-level could inspire more female presence at board-level, further benefitting the company.

*Financial Reporting Council (FRC), London Business School and SQW, July 2021

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