Female representation in finance improves despite pandemic
Five years since the launch of a review into female representation in finance, the vast majority of firms have reached or are on track to meet their targets according to new research.
The Treasury launched its Women in Finance Charter after a review led by Dame Jayne-Anne Gadhia in 2016 which called on firms to track various data points, including the gender split of the firm, board and each business unit.
Half a decade later more than a third – 35 per cent – of the 209 Charter signatories who signed the Charter before September 2019 have met their targets while 36 per cent are on track to meet them, according to research by think tank New Financial.
However the pandemic proved to be a big test for finance firms particularly given a group of 81 signatories were due to hit their targets by the end of 2020. Just 37 met the targets for representation in senior management, according to the fourth annual review into the Charter.
But of the 44 that missed the deadline, 35 came within five percentage points or 10 female appointments of hitting their target, laying the blame with recruitment to promotion freezes.
Speaking at the launch event this morning, the director of financial services at the Treasury Gwyneth Nurse warned those failing to meet targets will be taken out of the Charter.
“Diversity must continue to shift from a side-of-desk activity to be treated just as any other strategic objective for the business,” Yasmine Chinwala OBE, author of the report said.
“A negative knock-on effect [from the pandemic] on female representation is not inevitable. This review shows examples of signatories seeking to understand and mitigate the impacts of Covid on its workforce, particularly women,” she added.
The chief executive of the Financial Conduct Authority also spoke about the importance of diversity and inclusion in regulation. “This lack of diversity at the top raises questions about firms’ ability to understand the different communities they serve, and their different needs,” he said.
“I would question if any firm can adequately respond to the needs of these consumers if they do not have the diversity of background and experience required to overcome biases and blind spots.”
He added the regulator was eyeing Nasdaq-style listing rules to promote diversity.
“In the US, we have seen the Nasdaq take the lead with its listing rules, which will require all companies listed on its US exchange to have, or explain why they do not have, at least two diverse directors”, he said.
“We will be exploring whether we should make similar requirements part of our premium listing rules.”