According to new research, female directors at FTSE 350 firms are, on average, are paid half a million pounds less than directors who are male.
Research conducted by Fox and Partners, an employment and partnership law firm, found that women are less likely to be promoted to executive roles and are facing a large pay gap.
Overall, female directors within FTSE-350 companies are receiving, on average, salaries of £247,100 compared to male counterparts who earn around £722,300, with a £500,000 shortfall between the two.
This disparity has been largely attributed to the lack of women in executive roles as directors.
Whilst diversity may be increasing for women on company boards, the research suggests that female directors are largely occupying non-executive positions.
Within the survey, over four out of five female directors (86 per cent) were classed as non-executive, carrying less day-to-day responsibility and therefore, being lower paid.
Conversely, under a fifth (15 per cent) of female directors were in executive positions, allowing only a small proportion of women to receive the highest salary.
As such, the research states that, whilst appointing women to non-executive roles was a “step in the right direction”, companies need to ensure women are promoted to permanent, senior executive positions, allowing them to have more influence at a senior, strategic level and creating a greater long-term change.
Diversity has been a significant focus for many FTSE 100 and 350 companies, with a recent review finding that almost a fifth of FTSE 100 companies have no ethnic diversity on their boards.
In addition, intersectionality is also being taken into account by companies with almost half of the ethnic minority directors within the FTSE 100 (118 directors) also being women.
Catriona Watt, Partner at Fox & Partners, says:
Despite having greater levels of diversity at more junior levels, financial services firms are still struggling to reflect that shift at the senior executive level.
In order to see long term change, firms must be committed to taking steps that will lead to more women progressing through the ranks, getting into senior executive positions and closing the pay gap.
Boards need to be open to challenging themselves by asking honest questions about the barriers in their organisation that might prevent women reaching the very top.
*This research was conducted within an analysis of board members pay FTSE350 listed financial services companies, excluding equity investment trusts.