Why women entrepreneurs?
(transcript of Common Business School lecture at Liverpool Hope University)
Now we come to the second reason, and here I have to confess that I have a considerable advantage over most business students.
My first degree is in Zoology and as part of that degree course I studied Human Evolution, so please bear with me if my argument becomes overly complex and too scientific. The early record of human evolution threw up a number of incredible metrics, some of which are as true today as they were when early hominids first started to move from the East African Rift Valley. The most important statistic for our discussion today is the staggering revelation that 51% of the population are women. Yes, women are not a minority group …. BUT
- women make up just 22.5% of women MP’s. The picture is slightly better in Scotland but the number of women MSP’s is the second lowest in four Holyrood elections at just 34%
Staggering though this is, it is the high point as,
- women make up just 15% of High Court Judges – which may go some way to explaining why prisons are filling up with single mums whose main crime is a failure to cope. But that is a discussion for another day.
- according to the Davies Report women make up only 12.5% of the members of the corporate
boards of FTSE 100 companies. Admittedly this does represent an improvement from 2004 when the figure was just 9.4%. At this rate of growth it will take 70 years to achieve gender-balanced boardrooms in the UK’s largest 100 companies. Under Lord Davies’ recommendations, FTSE-listed boards are required to have 25% of positions held by women by 2015. We’ll look at progress in this regard a little later.
- just 10% of bank CEO’s are women. In 2011 the EU issued draft proposals to force banks to take on more women directors. The proposal calls for women to make up one-third of bank directors. At the time the proposal was launched, Royal Bank of Scotland and Lloyds Banking Group had female representation on the boards lower than 10%, at HSBC it was 25%, at Barclays 15% and Standard Chartered 13%. Ana Patricia Botín of Santander is the only female chief executive of a major bank.
- only 5% of national newspaper editors are women – and remember what the Icelandic experience tells us about the importance of a positive media profile.
- and 0% of the monetary committee are female. I’m not a fan of (the late) Margaret Thatcher, to put it mildly, as I was still in Liverpool when she was determined to destroy economic development in the city, but she did suggest that balancing the national budget was little different to what every woman did week in and week out in the home. I quote, “”Any woman who understands the problems of running a home will be nearer to understanding the problems of running a country.” I can’t help feeling that under the current economic circumstances having more women on the committee wouldn’t be a bad idea.
And the imbalance continues when we consider entrepreneurial activity. Women are only half as likely to be involved in entrepreneurial activity as men. The figures are woefully low in the UK for both sexes actually, with the result that only 5% of women are involved in entrepreneurial activity.
And it is reflected in the statistics showing who has control of the small businesses in the UK as over half of SME’s are run entirely by men. For those that don’t recognise the acronym, SME’s are small or medium-sized enterprises and defined as those businesses having less than 250 employees. For completeness the figures collected in 2010 show that
- 52% of SME’s are entirely male led
- 9% of SME’s are majority led by men
- 25% of SME’s are joint led
- 14%of SME’s are majority female led
Returning to the issue of women on boards for a moment, after an initial upsurge in female board appointments in the wake of the Davis Report, progress is slowing. This is not just my opinion but that of Business Secretary Vince Cable responding to the latest report from the Cranfield International Centre for Women Leaders.
The latest figures show that the percentage of female appointments to FTSE 100 boards in the last six months is 26%. This is a considerable slow down from the previous six month period measured by Cranfield, where female appointments to the FTSE 100 were 44% . To dramatically emphasise just where we are now;
- Right now there are only 18 women in executive positions in the FTSE 100, compared to 292 men.
So the second reason is the simple one of equity. It seems only fair that a gender that represents over 50% of the population should be proportionally represented in offices of state, in the board rooms of our major corporations and in SME’s.
As a post-script to this part of the discussion and an affirmation of Part I, Penny de Valk, Chief Executive of Cedar, said in response to the slow-down; “The lack of female role models in senior positions feeds a vicious cycle, where the summit looks like a risky and alien place for women and the personal cost of success may seem too high.”
So we need more women entrepreneurs;
- To provide role models for the next generation of young women and
- Simply as a matter of fairness
The 3rd reason, which we’ll discuss next, is the simplest and most compelling, because it makes economic sense.