Fortune - The U.K. has a 'Peter' problem

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July 29, 2020

Good morning, Broadsheet readers! MacKenzie Scott—formerly Bezos—has donated $1.7 billion of her fortune, women protest femicide in Turkey, and the U.K. has a ‘Peter’ problem. Have a thoughtful Wednesday.

– More ‘Peters’ than women. A new study out of the U.K. tells us what we’ve long known; that there’s a business case for gender diversity.

Research by gender diversity consultancy The Pipeline puts a fine point on the matter, finding that FTSE 350 companies that have executive committees with at least 33% female representation have a net profit margin over 10 times that of companies with no women at that level—15.2% versus 1.5%. In fact, this year’s study found that the gap in net profit margin between companies with executive committee-level women and those without is the biggest recorded in five years of research.

That data, however, stands apart from other revelations; it makes the case for gender diversity but the study found little progress toward that end, even as the U.K. pushes for board diversity and pay gap transparency at the federal level.

The share of women on FTSE 350 executive committees inched up 2.7% to 19.8%, but 15% of the U.K.’s largest companies still have zero women at that level. What’s more, it seems that women who are joining executive committees are being appointed to functional roles rather than those with profit and loss responsibility, a more reliable gateway to further advancement. Of all executive committee members with P&Ls, just 10% are women; over two-thirds of FTSE 350 companies do not have a single female executive committee member in a P&L role.

That sparse pipeline of female leaders is evident at the very top; 5% of FTSE 350 CEOs are women. In April, there were more men named Peter than there were women in the chief executive ranks.

Former U.K. Prime Minister Theresa May, who wrote a foreword to the study, called the results depressing. She urged companies—especially those led by men—to groom more female leaders and warned firms with too few women that they soon “will discover that they cannot recruit the talent they need to succeed.”

“Whenever data reveals a disparity of outcome between groups, the challenge to those in power should be—explain it or change it. There can be no good explanation for the massive underrepresentation of women at the top of British business,” she said, “so it must change.”

Claire Zillman
claire.zillman@fortune.com
@clairezillman

Today’s Broadsheet was curated by Emma Hinchliffe.

ALSO IN THE HEADLINES

- $cott in action. MacKenzie Scott—the former MacKenzie Bezos, now using her middle name as her surname—shared some details yesterday about her past year of philanthropic giving. The world's second-richest woman has donated $1.7 billion over the past year to charitable causes, with the most money going toward racial equity organizations, including significant gifts to historically Black colleges and universities. Fortune

- Survey says. Women are more worried about layoffs than their male coworkers, according to a new Fortune-SurveyMonkey poll: 49% of female workers are concerned about the possibility of losing their job, compared to 35% of male employees. Fortune

- Top billing. Watchmen, the HBO series starring Regina King, led Emmy nominations announced yesterday with 26 nods. Other notable honorees included Jennifer Aniston for The Morning Show , in her first nomination in a drama category, four categories for Kerry Washington, and a posthumous nomination for director Lynn Shelton. Fortune

MOVERS AND SHAKERS: The Washington Post promoted Krissah Thompson to managing editor for diversity and inclusion; she is the first person to hold the new newsroom position and is the first Black woman to hold a managing editor title at the paper. Intel promoted Dr. Ann Kelleher, who was head of Intel manufacturing, to lead Intel technology development focusing on 7nm and 5nm processes. Investment management firm LSIA named Karen McClintock president and CEO.

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IN CASE YOU MISSED IT

- Home alone. The pandemic has left adolescent and pre-adolescent girls feeling isolated and scared. With some families maintaining stricter quarantine rules than others, the loneliness is magnified on social media as girls see their friends finally getting together. Wall Street Journal

- 'We are here.' After the discovery last week of 27-year-old student Pınar Gültekin murdered by her boyfriend, women in Turkey began speaking out against femicide and violence. "We are here, Pınar, we will hold them accountable,” protesters have chanted at rallies. Guardian

- Rice choice. Another potential VP pick for Joe Biden? Former Obama administration national security adviser Susan Rice. She seriously considered running against Sen. Susan Collins in 2018, and, although she has never held an elected position, is in the running for the veep spot. New York Times

- Higher standards. The coronavirus crisis is testing the model of stakeholder capitalism, CVS Health EVP and president of the Aetna business unit Karen Lynch argues in a new op-ed. Businesses now have new and expanded responsibilities beyond a simple commitment to economic opportunity and employee benefits, she says. Fortune

ON MY RADAR

The Wing was my dream job. Working there turned into a nightmare Elle

McDonald's has a real sexual harassment problem The Nation

Michelle Wie West on motherhood, pain and a possible return to golf New York Times

PARTING WORDS

"I was empowered and happy to have nothing."

-I May Destroy You writer, creator, and star Michaela Coel on turning down a deal with Netflix over its ownership terms