Image: Fearless Girl by Shinya Suzuki is licensed under CC BY-ND 2.0
Just in time for International Women’s Day (8 March), the Fearless Girl
statue has made its way to one of London’s financial districts – opposite London Stock Exchange. The bronze sculpture, commissioned by State Street Global Advisors (SSGA) is a replica of the original on Wall Street, outside the New York Stock Exchange, which was installed on International Women’s Day 2017. The symbolic 4ft statue of a defiant young girl with her hands on her hips was originally commissioned as part of an SSGA campaign for companies to increase the number of women in senior leadership.
Having an equal representation of women in the workplace can have positive effects on a business. A UK government report published on 13 June 2018, Women in finance
, says benefits of gender diversity include increasing challenge, reducing the chance of 'groupthink', and improving business performance. It states: “Greater diversity for firms serving clients can help them relate to a more diverse range of clients.”
Gender diversity is very much on the radar in the financial services sector, but how much progress on it has actually been made?
According to an article by Daniela Esnerova for Money Marketing
, at the Personal Investment Management and Financial Advice Association’s (PIMFA) Wealth of Diversity Conference on 5 February 2019, John Glen MP, economic secretary to the Treasury, commended the progress of financial services to address the issue of gender parity, but admitted that progress has been slow. He called for evidence-based interventions and asked firms to learn from one another.
Gender diversity doesn’t just cover the number of women employed by a firm, or the number of women holding senior positions. One of its central issues is the gender pay gap.
Geraldine Healy, professor of employment relations at Queen Mary's School of Business and Management, led a piece of research on the gender pay gap, published in January 2019 – Gender pay gap, voluntary interventions and recession: the case of the British financial services sector
. Healy highlights some key figures in a follow-up opinion piece
: women in finance earn 27.2% less than men an hour on average; the bonus gap is at almost 50%; and there has been only a marginal decline in the pay gap since the 2008 financial crisis.
Healy also refers to a speech by International Monetary Fund managing director Christine Lagarde made at the World Economic Forum annual meeting in Davos in January 2019. She describes the poor representation of women at the top of the banking sector as “appalling”. Healy agrees, but notes that “it is not enough to simply promote women and then pay them less than men in the same positions”, pointing to the gender pay gap.
The PwC Women in work index 2019
was published in March this year and opens with a statement about the progress of gender diversity in the workplace. “Women in the OECD [countries] still face significant challenges and inequalities in the workplace. The pay gap persists, and women are still under-represented in corporate leadership, with women accounting for only one-in-five of board seats in the largest publicly-listed companies in the OECD,” the report reads.
The index shows that while progress is being made across the 33-member countries of the OECD, the pace is slow. However, the report claims there is a “huge prize at stake” from increasing female participation in work. It could reportedly boost the GDP across the countries by US$6tn and closing the pay gap has the potential to boost the GDP by US$2tn.
While the report looks at 33 countries, there is a section dedicated to the UK’s progress. Small gains have been made, with the UK moving up the index from 17th in 2000 to 13th in 2017. Scotland had the highest representation of women in the workplace in the UK.
The report says the UK is being “held back by a stubbornly persistent gender pay gap, which will require concerted government policy and business action to address”. It reports that, in the UK, if the gender pay gap is closed, female earnings would increase by £92bn, 20% of its current value.
Women in business initiatives
In February 2016, the independent Hampton-Alexander Review, supported by the UK government and chaired by Sir Phillip Hampton and the late Dame Helen Alexander, was set up to increase the number of women on FTSE 350 boards. In its November 2018 annual report
, the independent body finds that although more women are taking up board positions and only a small minority of the boards are all-male, the number of female chief executives has fallen from 15 to 12 during the year.
The Hampton-Alexander Review is committed to achieving a target of 33% female representation on boards by 2020, but the 2018 review states that UK companies have a long way to go. Almost two-thirds of board appointments within the FTSE 100 were taken up by men over the year. Unless this rate of female appointments increases, the Hampton-Alexander Review says it is likely to miss its 33% target.
However, it’s not all bad news. The HM Treasury Women in Finance Charter
asks firms in the sector to pledge to achieve gender balance and, according to the UK government’s Women in finance
report, the majority of charter members are meeting their targets. Targets are set internally within each firm and 85 have met, or are on track to meet, their targets for female representation in senior management.
Since 6 April 2017, firms in Great Britain with more than 250 staff are required by law to publish annual figures on their gender pay gap (mean and median averages), gender bonus gap (mean and median averages), the proportion of men and women receiving bonuses and the proportion of men and women in each quartile of the organisation’s pay structure. In some of the latest financial services sector figures, according to the Women in finance
report, the average mean pay gap per hour at banks and building societies is 35%, at non-life insurance companies it’s 31% and life insurance companies have a gap of 23%. The average mean bonus pay gap at banks is 52% and 56% at building societies.
Fintech leading the way?
Could women in fintech have an opportunity to reshape the sector? In February 2019, Innovate Finance, an independent, non-profit membership-based organisation for the UK fintech community, published its annual ‘Women in fintech powerlist
’. A total of 35 women were highlighted on the list, including HSBC head of digital innovation Diana Biggs, Starling Bank founder Anne Boden and Monzo chief technology officer Meri Williams.
However, another report by Innovate Finance, 2018 VC fintech investment landscape
, states that only US$54m (3%) of all UK venture capital investment was put in to companies with at least one female founder or co-founder. Does this suggest that female leaders are attracting less investment than male leaders?
A look forward
What more can be done to encourage firms to close the gap and increase appointments of women to boards? If you have ideas to share, or your employer is succeeding in this area, we would like to hear from you. Please leave your comments below.
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