The UK’s biggest companies are facing greater gender income inequality compared to the overall population, a new report shows. According to recent data from the leadership consulting and talent solutions provider, New Street Consulting Group, women who are directors of the largest UK companies receive an income that is merely a fraction of that of males.
These companies are defined as the Financial Times Stock Exchange’s index for the 100 most successful companies in market capitalisation within the London stock exchange. And with the figures showing that men earn 73% more than women, it is revealed that well-established and financially strong companies are particularly more likely to engage in gender discrimination regarding the pay gap, far more than that which prevails among the general population. In this regard, the Office for National Statistics reported in 2020 that women earn 15.5% less than men within the wider spectrum of employment.
The significant financial gap is largely caused by the fact that most female directors at FTSE 100 companies work in “non-executive” roles, which reportedly give lower incomes than the executive counterpart.
Claire Carter, a director from New Street Consulting Group, said that although “great progress has been made in bringing more women on to boards,” the data indicated that the progress is incomplete.
“Focusing solely on the percentages of directors that are women is not enough when trying to approach equality,” Carter added.
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The Hampton-Alexander review, which was completed in February 2021, was an initiative aiming to increase female roles in senior leadership. According to The Guardian, the review reached its goal of having 33% of FTSE 100 and FTSE 250 (Index for the 101st to 350th most successful companies in market capitalisation) firm board positions carried by women for 2020. The Financial Times reports that in January 2021, 34.3% of these board positions within FTSE 350 were taken by women, which is a 21.9% increase since October 2015.
The chair of the review, Sir Philip Hampton, applauded this improvement but said it is necessary that businesses appoint and promote women to high-ranking executive roles “to sustain the changes made.”
“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. 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.”
The business management consultancy also found that male non-executive directors at FTSE 100 firms earn an average of £170, 400 – still considerably more than the female equivalent that only earns £104, 800.
Executive directors face an even bigger disparity between incomes, as women in these roles earn £1.5 million on average, whilst men earn £2.5 million.
Thus, whilst it is evident that there is less inequality between male and female non-executive directors than in the recent past, it is nevertheless still an issue, and as women enter higher positions, the gender pay gap becomes ever more apparent.
Editor’s Note: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com.— In the Featured Photo: A person working on a Laptop. Featured Photo Credit: Mimi Thian