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Female representation on Scotland’s public boards reaches 50%

Written by Claire Elliott

For the first time in Scotland’s history, more than half of all board members appointed to oversee public bodies are women, three years ahead of the target set by the Scottish Government. The increase in female representation on public boards in the last few years is staggering, up 45% from 2016, and shows how quickly changes can be made if there is the political wherewithal. Yet, as this only applies to some public boards, it reminds us that more needs to be done to fully release the potential of Scotland’s female population.

The 2022 target was set in March 2018 through the Gender Representation on Public Boards (Scotland) Act, the first to set a statuary target, which required 50% of non-executive board members to be women. The Act only applies to certain public bodies such as health boards, enterprise agencies, the Scottish Police Authority, Scottish Fire and Rescue Service, colleges and universities. These are organisations which are responsible for significant public expenditure and so represent a significant step in equalising decision-making power.

This achievement puts a much needed dent in the glass ceiling, the term used to describe the sometimes invisible barriers to success that many women face in their careers. These barriers are deeply embedded in cultural norms and cognitive biases which make it more difficult for women to reach the highest position in their field. For instance, attributes which are considered most effective in business and leadership tend to favour men whilst attributes which are more commonly attributed to women are not traditionally favoured in these arenas. 

There are many reasons why the number of women on boards is significant. From an economic standpoint it is true that when women do better, everyone benefits.

Research shows that boards with a more equal gender balance are more effective. The main reason for this is that diversity drives innovation. Board members have different ways of approaching problems, coming up with solutions and thinking of new ideas.

Balanced boards are also good for finances. Companies with more female directors tend to outperform their competitors in sales, share performance and stock price growth. Swiss institute Credit Suisse looked at 3,000 companies and compared boards with some women to boards with no women and found that one woman on the board had the effect of a higher return on equity by 4%. Having more women on boards appears to be highly beneficial especially in times of economic downturn, with companies with women on the board faring better during recessions with less volatility reported in company profits.

Women are also likely to be ambitious about expansion – in a survey by Women’s Enterprise Scotland 87% of surveyed female-led enterprises were planning growth in the next year and 27% were planning rapid growth.

An interlinked bonus of women in board rooms is that it is likely to encourage other women to become involved in business and apply for senior management roles. As it stands rates of female business ownership are consistently low, only 21% of Scotland’s small-medium sized businesses are majority-led by women. The Federation of Small Businesses estimate that the contribution of women-owned businesses to the Scottish economy has increased 76% since 2015 to £8.8 billion (measured in gross value added).

The same report estimates that women-owned businesses are now responsible for creating 231,000 Scottish jobs, up from 153,000 in 2012.

Yet there is still an enterprise gap which comes at a cost to the economy. If levels of female business ownership were equal to that of men, there would be 32% more businesses selling products, innovating and hiring staff. These extra 108,480 businesses would create to a 5.3% growth in the size of the Scottish economy, worth £7.6 billion

In Scotland, women make up 58% of university entrants and the majority of public sector workers. Increasing opportunities for women to advance to senior positions leverages this talent and human capital more effectively.

So, although the equalisation of female representation on public boards is welcome, much more needs to be done to increase female representation on all boards as well as break down barriers for women participating in businesses. What this does demonstrate is the ability of governments to accelerate change through targets and other programmes which break the glass ceiling. The 2022 target was met early. Future targets should be equally ambitious as the benefits of women in the board room for the economy are indisputable.

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About the author

Claire Elliott

Claire is a political science graduate of the Central European University with a particular interest in EU politics and environmental issues. She is an economics and policy research executive with Business for Scotland.

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