The Reykjavic Index finds ONE in TEN respondents explicitly not comfortable having a female CEO
As the UK confronts its first recession since the global economic crash of 2008, entrepreneurship remains key in combatting the ongoing crisis as innovative technologies, products and services serve as a key vehicles for job creation and growth. Although women account for about one in three entrepreneurs in Britain, only 16 per cent of all equity finance is raised by female business owners, making it a difficult and potentially unattractive proposition. Further to this, new data from The Reykjavic Index for Leadership – which surveys all G7 nations – found that in the current climate, trust for women in positions of power has decreased with one in 10 respondents explicitly stating they would not be comfortable with a female CEO.
Trachet – a female-led advisory helping entrepreneurs accelerate growth – highlights the gaps yet to be bridged in terms of creating equal opportunities for women in the UK, particularly in terms of investment. Trachet commissioned landmark national research which found 28% of women in Britain believe investors won’t consider them as a viable investment opportunity simply due to their gender. The data further unveils a staggering 52% of Brits state they share the sentiment that women must work twice as hard or be twice as qualified as men to reach the same objectives in business – an issue which is further exacerbated when it comes to female-founded companies. Perhaps unsurprisingly, this need to work harder is having a knock-on effect on their mental health, with 36% of respondents stating they often feel tired, helpless, or lonely from the world of work due to their workload.
Furthermore, the Rose Review progress report – which sets out the full extent of progress made into gender equality in business – announced that the UK economy finds its growth hampered by nearly £250bn due to a lack of investment and support into female-founded businesses. Women lead 40% of all micro businesses and 38% of small businesses yet only 26% of women lead medium sized businesses, with the percentages getting gradually lower as the businesses get bigger. This is seemingly due to the barriers women encounter when seeking finance to scale-up their firms. Women start their businesses on average with 53% less capital than men, and a report by Deloitte states that 46% of would-be borrowers did not seek finance because they expected issues with the loan process.
Claire Trachet, founder of Trachet, a female-led advisory disruptor, discusses the challenges women continue to face in the workplace and in securing finance:
“Women-led businesses have to do with lesser capital (to avoid dilution) and hence see their growth potential tethered which puts the business’ survival at risk – especially in light of the challenging economic climate which will be an important factor over the next six months. The silver lining is that women are used to being resourceful and doing with less capital, hence are well experienced for tougher market conditions. This is also probably a key reason why women-led businesses generate better ROI over time.
“Social models are still significantly biased against women and minorities. This is reflected in business by lower salaries, a slower career path, distinct lack of access to C-suite or board positions and both fewer and smaller investments received. There is no chance of reaching a more balanced set of opportunities for women and men without society making conscious choices to start with – just like getting into any new habit.
“Crucially, it is important to note that this is not advocating for the promotion of subpar businesses because they are led by women. It is about giving people a fair shot and owning the fact that biases run deep within businesses and institutions all around the world, including tech.
“Female entrepreneurs bring a different perspective that opens fresh solutions to age-old problems. One such example is CodeOp, a female-founded company that built a business which demonstrates every day that, when it comes to diversity in tech, the “pipeline problem” is a myth that prevents accountability for biases in organisations. Accountability and actions are a path to the balancing of opportunities.
“Women-led businesses regularly outperform other businesses, meaning excess returns for the investors, and they tend to reach these top echelons of performance in a more capital-efficient way. On top of this, their businesses tend to be less volatile during crises – something we have seen countless times in the businesses we advise. Female entrepreneurs also tend to build businesses that are more diverse, hence the added creativity in problem-solving, and have increased capacity to attract and retain talent in this era of the “great resignation.”
