Small and medium-sized businesses – or SMEs – are seen as the lifeblood of the UK economy. However, should they do more to create opportunities for women to take leadership positions? Victoria Symons, Head of Corporate at Cripps, argues that female leaders are being locked out of senior roles – and quotas, rather than targets, are the best solution.
Gender quotas for SMEs might seem far-fetched. It’s true that at the moment, the UK does not even have gender board diversity quotas in place for the largest, listed businesses. Instead, the Financial Conduct Authority (FCA) has set a target for FTSE 350 businesses to achieve at least 40% female representation on their boards. However, nearly a fifth of FTSE 100 firms do not meet this target, often opting to ‘explain’ rather than ‘comply’.
Some of these businesses are the best-resourced in the UK – even in the world – but even these large corporates struggle to meet this reasonable and well-researched target. Meanwhile smaller businesses, which have no such targets, show even less progress, with only 24% of SMEs equally led by both men and women and 18% led by women in 2022—a figure unchanged since 2015.
This demonstrates that while targets have some impact, there are limitations without enforcement. Businesses are operating in a challenging environment and there is a fierce war for talent. Unfortunately, Cripps’ own research into female leaders at mid-sized businesses demonstrates that women are in an environment which is not just challenging but actively hostile: 100% of respondents had experienced some form of gender bias, impacting their career progression.
So, what can businesses to do support an environment of equality of opportunity for women, and create an environment in which gender board quotas could be easily met?
SMEs often face unique challenges in attracting and retaining female leaders. These include limited access to childcare, fewer opportunities for professional networking, and pervasive gender biases.
Significant barriers prevent women from progressing to leadership positions. Professional barriers, such as limited opportunities to demonstrate leadership skills, and personal barriers, like confidence and self-belief, need to be addressed. Initiatives such as gender equality workplace goals, mentoring and leadership programs, and gender quotas can help.
Childcare options are limited and expensive, with 22% of female leaders in our survey citing access to affordable childcare as a critical barrier to career progression. Additionally, 18% cited a lack of support post-parental leave as a barrier. Addressing these issues is crucial for enabling women to progress in their careers.
Interventions are needed both at the policy level and within businesses. This includes improving access to childcare and supporting women in building their professional networks and confidence.
Moreover, without addressing the root causes of gender-related barriers, achieving true gender equality remains challenging. Mandatory gender bias and unconscious bias training for all employees, along with diversity and inclusion initiatives, can help create a more inclusive work environment. Allyship is crucial, with both men and women calling out unacceptable behaviour and attitudes.
Leadership must set the tone, with C-suite leaders publicly acknowledging the inadequacy of the current status quo. Leadership should reflect the customer demographic and society’s evolving nature. The war for talent is immediate, and a lack of diversity exacerbates the issue. C-suite intolerance of male-dominated boards, sponsorship of potential female leaders, policy changes, and a focus on outcomes over presentism are necessary.
The current policy landscape still falls short of adequately supporting female-led businesses, particularly in the mid-market. Cripps’ research revealed, 22% of female business leaders in mid-sized support the idea of gender quotas for boards and leadership roles as a way to overcome barriers to women’s progression. Introducing quotas for both board and mid-management would make a significant difference to creating equality in the workplace. This should be supported through the government provision of mentorship, education, and training for women aspiring to entrepreneurship, and extending and enhancing childcare provisions and pay for both parents taking family leave.
Businesses can also make a difference without policy intervention, by building women’s confidence through mentorship and networking opportunities. Implementing diverse hiring and promotion practices, including inclusive job descriptions and training for promotions, is also crucial. Most of all, training on gender bias and unconscious bias should be mandated to ensure that women are working and progressing in environments which are conducive to success, rather than having to battle outdated gender stereotypes.
Over the years, a combination of government-backed voluntary targets, shareholder pressure, and industry initiatives has led to significant improvements in gender equity in the boardrooms of listed companies. In 2024, 42% of FTSE 350 directorships were held by women, up from 26% in 2015. By contrast, the representation of women in leadership roles within SMEs has remained stagnant.
Given the documented benefits of gender diversity and the persistent barriers within SMEs, it may be time to consider more robust measures, such as gender quotas, to foster a more equitable and profitable business environment. However, these measures should be carefully designed and implemented to avoid unintended consequences and ensure genuine progress towards gender parity.
