Survey: Share of women on SME boards significantly up

The most recent Yrittäjägallup business-owner survey shows that the share of women on the boards of SMEs has increased. There are now women on two thirds of working boards.

Over a third (36%) of SMEs have working boards, the recent Yrittäjägallup survey finds. This share has grown slightly since 2019, when the survey was last conducted.

Of companies employing more than 10 people, 61% have a working board. In 2019, the share was 60%. Working boards are most common in industry and retail companies.

The share of women on the boards of SMEs has increased. Women sit on 67% of working boards. In 2019, the share was 55%. On 30% of boards, the number of women and men is equal (in 2019, 27%), and women are the majority or form the entire board on 18% of boards (in 2019, 13%).

“It’s positive to see a significant rise in the share of women on SME boards. It shows that businesses want to use their skills more broadly,” says Mikael Pentikäinen, CEO of Suomen Yrittäjät, the Finnish SME association.

The share of women is highest in service industries and retail, and lowest in construction. The highest number of entirely male boards is in Southern Finland (excluding the capital region).

One board in four (26%) has independent members. In 2019, the share was 24%. Independent board members are most common in young business owners’ companies (49%).

The Yrittäjägallup survey was answered by 1,154 representatives of micro-enterprises and SMEs between 25 September and 1 October.

Staff involvement more common

The chair of the board is more frequently employed by the company. In 2019, the chair of 22% of working boards did not work in the company; now, that share has declined to 17%. The chair of the board is generally (89%) the company owner. In 2019, the share was 90%.

A staff representative more frequently sits on the company board. In 2019, the staff were represented in 22% of working boards; now, that share is 27%. The staff are quite evenly represented in employer companies of different sizes, with the highest share in construction and young business owners’ companies.

A working management team is in place at 28% of companies. That share has remained the same. However, 56% of companies employing more than ten people have a management team. A staff representative is part of one in four (24%) management teams, most frequently in young business owners’ companies.

“The increase in staff representation is a positive thing. It shows that boards want to capitalize on employees’ skills. It also commits employees,” CEO Pentikäinen says.

“It’s important to remember that companies have very diverse administrative and leadership models and cultures. That’s why companies have to be able to agree on the forms of participation at the company level, and those forms have to form part of the company’s leadership culture. The board often focuses on ownership policy. In that case, it’s the wrong place for a staff representative. The management team might be a better place, if there is one.

“It’s promising to see young business owners in particular bravely reinventing leadership and administrative practices, as well as using public services for business,” Pentikäinen says.

Bonuses not proliferated

Just over one in five companies (22%) uses an incentive scheme. The share is roughly the same as in 2019 (23%). A bonus model is most common in companies that employ more than ten people, in industry and in the capital region.

“It’s a little surprising that the number of incentive schemes hasn’t increased. Maybe across-the-board pay rises have starved incentive schemes of oxygen. Bonus schemes generally improve productivity and profits. That’s why I’d recommend SMEs also develop results-based incentives.”

In 22% of SMEs, the staff own shares in the company. The proportion has remained the same (in 2019, 23%). Staff ownership is most common in specialist service firms in the capital region and least common in the retail sector.

The most used external advisers in SMEs are accounting firms (74%), auditors (39%) and a mentor or adviser (38%). The share of companies using accounting firms’ services has dropped. In 2019, the share was 79%. The share of companies using auditors has also declined. The use of public business advisers is most common in Eastern Finland and among young business owners.

Recommendations for SMEs:

1. Clarify and document strategy.
2. Build an active board.
3. Also include independent board members.
4. Set up an advisory board, as a minimum.
5. Set up a management team and develop it.
6. Involve the staff in your leadership structures.
7. Review the company’s situation regularly as a group.
8. Launch an incentive scheme.
9. Boldly seek out growth.
10. Make a “successor plan” for your company.

Read the results in more detail here.

How the survey was conducted

A total of 1,154 representatives of SMEs responded to the survey, conducted by Veriana on behalf of Suomen Yrittäjät between 25 September and 1 October.

The confidence interval for the survey results is +/- 2.9 percentage points.

 

Further information:

President and CEO Mikael Pentikäinen, Suomen Yrittäjät, tel. +358 40 504 1944