Work still to on diversity
Women still overlooked for senior board roles
While one in four (23%) board directors are women, only one in seven (14%) executive committee members are female, according to a report.
Gender balance in UK financial services has leapt up the agenda since the government asked Jayne-Anne Gadhia (pictured), chief executive of Virgin Money, to lead a review of women in senior management, and launched HM Treasury’s Women in Finance Charter.
Now the New Financial think tank has found a big difference between female representation on executive committees and boards.
At investment banks, 30% of board members are female, but only 12% sit on the executive committees.
The report finds that the UK government’s actions, such as the Davies Review, have focused on boards and this latest data shows this has not impacted on executive committees.
It says that 14% is the natural baseline for women on these committees.
“Where women do sit on executive committees, they tend to be in support roles, seen as cost centres, rather than ‘profit and loss’ functions, seen as revenue generating or profit centres,” says the report.”
It found that women made up nearly two-thirds of heads of HR (61%) and more than half of heads of communications (52%), but only 9% of heads of a division or region, and just 10% of the C-suite.
While the number of women on boards has increased to 23%, the report says this “disguises the lack of women in executive directorships”. The proportion of female non-execs (27%) is nearly four times that of female executive board directors (7%).
The UK government is now focused on increasing the number of women in the executive pipeline.
The Gadhia Review and HM Treasury Charter are catalysts not only for discussion but also provide a clear set of action points – including setting targets for improving gender balance – designed to shift the dial.
New Financial’s Diversity Disclosure 2015 research shows just 27% of companies publicly disclose any kind of diversity target, 26% disclose a gender-based target, 24% disclose a target for women in management and 10% a target for women on boards.
“While it won’t be easy, no financial services company would expect sales to improve without setting a clear target and having a strategy to achieve it,” the report finds.
Yasmine Chinwala, partner at New Financial and author of the report, said: “The data clearly shows that without an active focus on improving gender balance in the executive pipeline, it just won’t happen.
“Companies need to work out for themselves why diversity is strategically important to their business, and the Gadhia Review and HM Treasury’s Women in Finance Charter provide a framework for them to take decisive action for permanent, sustainable change.”
Ms Gadhia, chief executive of Virgin Money, which supported the report, said: “Too few women get to the top, so they leave the industry prematurely because the culture isn’t right, and this needs to change.
“The social and economic benefits of fairness, equality and inclusion are clear, and getting the gender balance right is proven beyond doubt to enable companies to drive superior results. Financial institutions must embrace diversity in their organisation in order to reap the benefits and help create a more balanced and fair financial services industry.”
Harriet Steele, head of business development, Hermes investment Management which supported the report, said: “Senior management can often see diversity as a legislative chore, or another target to be met, and may not recognise why diversity is important and the advantages it brings to a business.
“Men and women approach business differently and their collaboration can lead to more informed decisions and astute risk management. Evidence shows that businesses led by single-sex management are more likely to be subject to ‘group think’ and by definition have less understanding of a gender diverse client base.
“Change must start within the education system and companies need to follow that with supportive policies that allow all their best talent to thrive.”