Gender equality – getting women into finance in 2021
Is the financial services industry “male, pale and stale?” Only one in four of those who reach a senior position in the UK finance industry is a woman.
The increase of women in the sector has been more of a trickle than a flood as the percentage of women working in senior positions increased by only 1.5% in the last 2 years.
There’s clearly a way to go. Amid the current surge of campaigns and popular support for gender equality and speaking up about inappropriate behaviour, giving women equal rights and fair representation in the workplace has never seemed more relevant.
So how can the finance industry help women succeed in the sector and bridge the gap for gender equality?
Collective initiatives to foster gender equality
Women have been stealthily creeping up the career ladder in finance, but the prevalence of women in senior roles peters out in senior management roles. With only 12% of CEOs in US finance companies being women, there is clearly a lot more work to be done in order to foster more gender equality.
Women in Finance charter
Getting women into the industry requires buy-in from businesses themselves, and there is a perceptible shift. For starters, the UK Government-led initiative ‘Women in Finance Charter’ which encourages firms to reconsider their recruitment practices and initiatives, is an excellent catalyst for the industry to collectively address the gender equality issue. Signing up to the Charter demands a commitment to fair and inclusive recruitment practices and supporting the professional development of women and gender equality.
The Charter now includes a total of 141 firms which covers the Post Office (UK), Citi and KPMG. The intention for firms who sign up to the charter is a commitment to publish their diversity targets and aim for a 50/50 gender split in C-level roles.
A review conducted by the New Financial think tank in March 2021 confirmed that out of the 330 firms involved in the Women in Finance Charter, 70% claimed to have met their diversity targets and were on course to meet future targets. Around 60% of firms outlined a target of 33% female representation in senior management roles.
81 firms claimed they were on course to meet their diversity targets by the end of 2020 but over half failed to do so, suggesting that their targets were too ambitious. The impacts of COVID-19 will have also played a part in diversity targets not being met during this period.
In response, the Financial Conduct Authority (FCA) have stated that there will be a regulatory crackdown amongst firms who fail to meet their diversity targets.
How does this initiative promote gender equality?
The purpose of the charter is to improve gender equality and diversity in senior positions in the finance industry, by connecting their remuneration and bonus schemes in leadership positions to these specific targets.
Those companies who have signed up to the charter have also committed to publicly publishing their progress against these targets.
It seems like a great idea, but is it working? Yes, almost two-thirds of firms who have signed up to the Charter have taken specific and measurable action to promote women in the workplace, and encourage women into more senior roles.
Some of the specific tactics used have included succession planning, reviewing recruitment practices and unconscious bias training, to help staff break down any obvious and more subtle cultural obstacles in the workplace.
So successful have been the tactics used to promote gender equality, many firms are starting to use the principles of the ‘Women in Finance Charter’ elsewhere in their firms, to ensure diversity of ethnicity and sexual orientation.
Guiding the next generation in supporting gender equality
Demonstrating positive role models and ensuring that there are equal opportunities for women in the finance industry is crucial for the next generation. Many firms are now starting to offer mentoring schemes for women intending to move into the finance industry or young women aspiring to start their careers. Whether they’re small informal events, larger structured schemes, or peer support on an ad-hoc basis, all of these contribute to encouraging gender equality and women to join the finance industry.
How can these events benefit gender equality?
Many young women may benefit from mentoring on everything from personal finance and starting their career, understanding how they can finance further training, through to business skills to help them get ahead. Likewise, celebrating women who have already made it to the top will help amplify the message that women are welcome in the finance industry.
Gender equality – demonstrating women’s impact
Many firms are waking up to the fact that promoting women into senior roles isn’t just a box-ticking exercise. The diversity of leadership in an organisation is crucial to keeping firms at the cutting edge, dealing with some of the issues faced by the finance sector, and will improve the business performance over time.
There is evidence that with alternative perspectives, female leadership or equality of gender representation helps firms to a higher level of effectiveness and better returns. Both of those are essential for the finance industry to innovate and grow.
In the workplace, women are likely to prioritise socially responsible and positive investments, meaning that women-led initiatives are highly likely to advance the industry.
Ways to support women in finance and gender equality
Younger employees such as millennials are starting to take a lead in the global economy. That is likely to mean that socially responsible investment will become more and more popular.
There is, without doubt, plenty of work for the finance industry to do to help encourage gender equality and more women to join their ranks. Equally, there are also ways in which female employees can make themselves stand out from the crowd to help progress their careers in a very competitive market.
Gender equality and overseas opportunities for women
One way to is to diversify and develop work-based skills by working abroad. Working overseas in a foreign business environment requires a very specific set of skills which many employees may not develop in their own country. This includes dealing with cultural issues where females are dealt with differently to how they’d expect to be treated in their home country. While this may not always be a positive experience, many women have used it to their advantage.
Those who have succeeded in their careers abroad in the finance and banking sector claimed that this experience helped to develop key personal characteristics and helped them to have a sense of self-confidence and worth, and a flexible attitude and open-mindedness to different ways of working.
The future of gender equality – in the UK and overseas
The future for females in the finance industry does look promising. While it’s easy to highlight the lack of equality in the finance industry, we should be showcasing and celebrating the examples where firms are actively encouraging women to succeed. It’s only through doing this that the industry will begin to change more rapidly.