KATIE CORRIGAN assesses the potential benefits for both business, and wider society of greater diversity within business leadership positions
International Women’s Day (IWD) each March is a celebration of the social, economic, cultural, and political achievements of women, as well as a reminder that there is still a way to go for gender equality. As a day on which to campaign for change, IWD has been around since 1911, and whilst great strides have been made since then, gender equality still eludes us in certain aspects of life.
In the UK, for example, the gender pay gap although viewed as a barometer of progress remains at 14.3% for median pay across all employees, and 7.8% for full-time employees, according to 2023 ONS data.
Seven years on from the introduction of mandatory reporting for UK companies with over 250 employees to publish gender pay gap data, the size of the overall gap highlights why we still need positive action to promote gender equality generally, but particularly in the workplace.
Recent research studies undertaken by organisations such as Deloitte, McKinsey, Forbes, and the American Psychological Association, have documented the benefits of having women in leadership positions in business.
Companies with diverse leadership teams are shown to perform better financially, with women bringing unique perspectives and experiences to decision-making resulting in more innovative solutions and a more collaborative work culture.
At a wider level women in leadership serve as role models for future female business leaders, and companies prioritising gender diversity in leadership are shown to benefit both in terms of business performance and societal contribution.
Some progress has been made over the past 10 years in the UK business sector. The latest FTSE Women Leaders Review (February 2024), tracking the representation of women on boards and in leadership positions of FTSE 350, and 50 of the UK’s largest private companies, reports that female representation on FTSE 350 boards has now surpassed the target of 40%. Nevertheless there remain some FTSE 350 companies which have no female representation on their executive committee.
All of this matters not only from an equality perspective in itself, but also in the context of an ever-changing business landscape where environmental, social and governance criteria are now as much key measures of performance for investors and stakeholders, as financial performance.
In the business sector predominant in my working life, namely real estate investment, the product (business premises) has evolved over the past decade, with an increased focus on the environmental performance of buildings and the provision of energy performance certificates (EPC).
That we need to improve the energy performance of buildings cannot be ignored as they contribute around 19% of total UK greenhouse gas emissions, so have an important role to play in reaching the net zero target (2045 for Scotland).
But unlike the voluntary drive amongst large businesses to increase female representation on boards, it has been necessary for government regulation to implement change here, meaning that in Scotland EPC improvements are now mandatory for properties over 1000m2.
While inertia may be a factor in the lack of voluntarily implementation of EPC recommendations among property owners and tenants, a more significant factor is cost, and the question of who bears it.
Whether it is the building owner whose building will increase in value as a result, or the tenant who will benefit from lower bills.
There can, however, be changes to the impact business premises have on the environment without capital expenditure on microgeneration of energy or efficiency upgrades. A
change of mindset, and a collaborative approach around dilapidations, would go some way to mitigating the impact of the default position currently requiring a tenant to remove all alterations and replace carbon-embedded items such as carpet tiles at the end of a lease.
Where reuse of an existing fit-out is possible, cost and time savings to both tenant parties and to the Landlord could be significant and the environmental saving even greater.
This is just one example of how a change of approach could represent a cost-effective way of helping a sector to perform better both in terms of business operation and its impact on society and the environment.
But, as with gender parity and greater benefits that can bring to both business and society, there will be an ongoing need for proactive measures to ensure that progress continues.
Katie Corrigan is a senior legal director and head of real estate at Vialex
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