Political and media attention – including, it must be said, the Women at the Top project – has tended to focus board diversity discussions on large, quoted companies. New research from Creditsafe, the business intelligence company, paints a much broader picture drawing on data from more than 2m limited companies across Europe.
In the UK, according to the Department for Business, Innovation and Skills, small and medium-sized enterprises make up 99.9 per cent of UK businesses and contribute 50 per cent of annual gross domestic product. Not only that, but 59.8 per cent of private sector workers are employed by SMEs. You might be forgiven for thinking that fast-growth entrepreneurial firms should be generally more progressive than leviathan multinationals. Well, it ain’t necessarily so.
Three-quarters (76 per cent) of the directors of UK limited companies are male – or, one in every 11 male adults in the UK holds at least one directorship of a limited company registered at Companies House. This compares with one in every 33 women. The average UK company director is a 49-year-old man.
In Germany, only 20 per cent of company directors are women, while in France 25 per cent of directors are female.
Interestingly, companies with women-only boards, the research says, are on average 51 per cent more efficient at collecting debts than those will all-male directors.
I asked Creditsafe if there were any significant differences in the credit ratings of companies in their 2.6m-strong database. The data show that 26 per cent of companies with male-only directors have an adverse or negative credit rating, while 23 per cent of those with all-female boards have an adverse rating. A mixed boardroom seems to offer the best profile, with just 19 per cent of companies listed by Creditsafe having a negative credit rating.
Diversity is a proven strength, whatever the size or complexity of an operation. We need more women involved in the leadership of SMEs as much as in public companies if we are to compete more effectively. Changing the culture of almost 60 per cent of the private sector workforce would seem to be a priority.