News
Tech firms miss ‘diversity premium’
Posted on 30th October 2018
Gender-diverse boards earn more, and internationally diverse boards raise more capital, Tech Nation says this week, after analysing open data from millions of UK firms. But, despite numerous diversity initiatives, it says that the UK tech sector is lagging behind.
Directors sitting on company boards with gender diversity have an average of £70,000 higher turnover than those that don’t – and those on internationally diverse boards raise 453% more investment than boards from a single country.
The new data draws on analysis of all 12.5m UK directorships and companies.
Government-backed agency Tech Nation has used open data to produce its findings, drawing on research by data scientist Henri Egle Sorotos. “This ain’t no anecdote – it pays to be diverse in UK tech,” he blogged this week.
Egle Sorotos reported that directors sitting on boards with gender diversity make 0.7% higher turnover than those that don’t.
“It’s clear that having a gender diverse and internationally-mixed board leads to better financial outcomes. With diversity in the tech industry notoriously poor, this research shows there is a huge economic incentive and opportunity in its promotion,” he said.
But Tech Nation says that what it calls “financial diversity premiums” are not being felt by enough, particularly among technology businesses, “and that’s a problem”. It says that, in the UK tech sector:
- 77% of tech directors are men (with a broader tech workforce that is 81% male)
- Tech sub-sector boards vary broadly in their makeup, with 87% of computer game developer directors male, and “the most polarised tech sub-sector for gender representation”.
- The proportion of men and women being appointed directors of tech companies has remained almost exactly the same since 2000, “despite a burgeoning number of interventions that aim to shed light on, and address gender disparity in the boardroom”.
If the present trajectory continues, the gap between men and women appointed to boards will continue to grow, predicts Egle Sorotos.
There is more encouraging news on the international make-up of boards, with 18% of directorships held by individuals with a non-British nationality, compared to 13% in the wider economy and UK population. “Tech leadership is highly international,” says Tech Nation.
The report coincides with the launch of OneTech, a new diversity initiative led by Capital Enterprise to double the number of female and black and minority ethnic founders in three London boroughs (to start with) by 2020.
