MPs plan reforms to boost gender equality at top of UK firms

Banks, venture capitalists and private investors could be forced to track and report the genders of the founders whose businesses they finance under new proposals by a cross-party group of MPs.

A report by the all-party parliamentary group (APPG) on women and work, published last week, found that women-led businesses face “structural and cultural barriers to accessing capital”. The APPG is chaired by Baroness Karren Brady, the vice-chair of West Ham football club.

Sarah Russell, co-chair of the APPG on women and work, told The Observer that in 2024, 2% of equity funding went to female entrepreneurs, down from 2.5% the year before. More than 80% went to all-male teams, she said. Just 15% of investment committee members are women, according to the report.

“This isn’t just unfair – it’s economically nonsensical,” Russell said. “If women started and scaled businesses at the same rate as men, the UK economy could see up to £250bn in new value. Reporting by gender shines a light on these gaps, holds investors accountable, and could unlock massive productivity gains.”

The government has indicated that it would intervene in the venture capital industry to increase the number of women-led businesses raising finance. In a response to a report by the Women and Equalities Committee, which highlighted the difficulties facing female-led businesses in accessing capital, it said it would “not rule out interventions in the future if the level of venture capital investment in female entrepreneurs shows no sign of improvement”.

Russell said the government needed to act quickly. “Successive governments have tried to encourage voluntary action from investors. I don't think we should wait much longer,” she said.

However, Sophie Winwood, the chief executive of Unlock VC, a platform for women working in the sector, said that although mandatory reporting of gender disparity would be a “very helpful” first step, it risks becoming “a checkbox exercise”. “Instead of just the data, you need to figure out why this is happening.”

Anu Adebajo, chief executive of Newton Venture Program, which provides education for venture capitalists, said data is “only one side of the coin”. “Reporting initiatives need to be rolled out alongside incentives that change behaviours.”

The report was published the day after a landmark review of women on boards showed “slow progress” on increasing the number of women in top executive positions at the UK’s biggest companies.

The FTSE Women Leaders Review found that women took up just 15.4% of executive director roles on the FTSE 350, compared to nearly half of non-executive director roles. There are just eight women chief executives on the FTSE 100, down from 10 in 2023.

Photograph Leon Neal/AFP via Getty Images