Comment: The gender problem in SMEs

Holly AbbottUncategorized


The Government is backing a drive to increase female representation in business leadership positions. The move is targeted at FTSE 300 companies, after a similar initiative in FTSE 100 companies saw female board representation rise from 12.5% to 26%.

How, though, does this kind of initiative relate to SMEs?

Is there a problem?

The drive to increase female representation on boards is derived from a view that there are prejudicial barriers to having women in leadership positions. Of course, having a woman on a board is very different to having women in real executive leadership positions, where they have real organisational power.

At Spirit Ventures, we’ve never been fans of quotas or other ‘positive discrimination’ schemes to improve female representation at leadership level. We currently have 2 women on our Executive Board, and 2 of our 3 board advisors are women. In our ventures, our biggest subsidiary has a 50/50 split on its Operating Board (the equivalent of a management committee), and our second biggest has a similar split. The women on these boards are not there just to satisfy an arbitrary need for ‘diversity’. They’re in those positions because they add real value and deliver excellent performance. They’ve outperformed male (and female) colleagues.

Yet, sexism in business, sadly, still seems fairly common. One of our women in leadership has faced numerous examples of explicit or implicit sexism from clients and suppliers. Needless to say, they’ve all been met with short, sharp ripostes. Is there, then, a problem in SMEs?

Are quotas the solution?

It’s uncertain whether board quotes or initiatives will have success for SMEs because of the smaller size of their boards. Such initiatives also fail to address the real causes of the gender imbalance. Different people have identified different barriers. A lack of female role models at the top of business, the confidence to lead, and the more well known issues over childcare, ‘flexitime’, and parental leave.

However, one Harvard Business Review article raises what may be an even deeper issue. It highlights that women may have different (but equally valuable) leadership qualities than those typically shown by men. They are seen as not having the “right” skill-set, when in fact they just have a slightly different skill-set to those shown by traditional, male leaders. The problem is that “the human tendency to gravitate to people like oneself leads powerful men to sponsor and advocate for other men when leadership opportunities arise”.

As with business and the environment, then, the issue is cultural. Just as in social care, the problem is not with the victims of discrimination, but our own prejudices and notions of what is “right”. Businesses need to break out of the embedded archetype of the male business leader and appreciate that leadership comes in many forms. Hopefully, as we see more famous women in business leadership positions – such as Karren Brady, Kelly Hoppen and Michelle Mone – these deeply held attitudes will change.