Mind the gap: Prioritising gender diversity in financial services
Finance is full of gaps. There is the budget gap, which Mr. Osborne is busy trying to fill through multiple measures. You have gap analysis, a technique of asset liability management that can be used to assess interest rate risk or liquidity risk. And then there’s gap risk, the possibility that an investment's price will change from one level to another with no trading in between.
Most recently, debate has focused on one of the most complex gaps of all – the gender gap. But are businesses really committed to tackling the imbalance of women in senior management teams and all the related issues?
“I wonder how much this inclusion thing is all about mindset” mutters a senior female trader at a recent industry event in Paris, framing it as a question of female self-esteem. She is sitting at a TradeTech roundtable, along with 40 or so women working in the trading industry globally – the type of professionals you would think “have made it”. But despite their senior titles and indisputable accomplishments, there is a feeling in the room that the scales are decidedly tipped against their favour. And, according to the recent Women in Finance survey conducted by Financial News, “the industry has moved backwards”.
Someone else in the room comments: “When I received my annual bonus, I knew that it was significantly lower than that of my colleagues in the same position. They told me that, since I was working flexible hours, this was the way they had calculated the final amount - but what has this to do with my professional achievements and the results I generated for my company?”
These complaints are backed by figures - according to recent analysis by Michael Page, male financial managers earn almost £45,000 a year more than women working in the same occupation. Data released by the World Economic Forum demonstrates that the pay gap is still very much a reality of the 21st century, affecting developed countries as well as emerging markets. Overall, the WEF study highlighted that women earn less than men and make up a smaller percentage of the workforce in every job industry.
The challenge is often less about the quantity of female workers entering the financial industry, and more about the concrete opportunities they have to climb the career ladder. “I was at this management offsite, and one of my male colleague proudly remarked that our company did not have any diversity issue because there were plenty of women working there. I looked around, and out of 30 senior executives sitting at that meeting, we were only 3 women. How could he completely miss the whole point?!”
A recent review of women in finance, led by Virgin Money chief executive Jayne-Anne Gadhia, found that in the UK women make up only 14% of executive committees and struggle to reach the top positions of financial services companies.
Yet companies with more gender diversity perform better financially: a study by McKinsey noted that a 10% increase in the representation of women at senior management level boosted earnings by 3.5%. The same change at board level was linked with an earnings boost of 4.9%.
Too few women get to the top and this is not just about childcare, or pay gap: the uncomfortable truth is that the main problem is cultural. “We were a small company at that time, and when we had meetings with clients or even internally, it felt natural for my colleagues to look at me to sort out coffee, stationery, etc…The worst thing? It was absolutely fine with me, too, until an external guest made me notice that no, it wasn’t OK” – another senior female points out.
Sadly, new sectors are every bit as prone to this as well-established ones: the booming fintech sector, which in the UK generates £20 billion revenues annually, is rife with gender imbalance as various studies pointed out. On the other hand, fintech may emerge as a catalyst for change within the broader finance industry, given the passion and commitment of hundreds of female entrepreneurs and influencers shaping the fintech agenda.
Obviously, there is so much that can be done. For example, mentorship and career coaching programmes can really inspire and support young women who are taking the first steps into the industry – considering that the Financial News survey found out that the majority of women polled had no mentor within their company to turn to for career guidance, nor any senior-level sponsor to champion their skillset to management. Several associations, from 100 Women in Hedge Funds to Helena Morrissey’s 30% Club, are actively steering the debate around gender balance further up the career ladder, taking the issue beyond a specialist diversity effort and into mainstream talent management.
But – regardless of sectors – really changing the culture means that the debate needs to move out of the ladies locker room and into the limelight. As one woman articulated, “Are we sure that we want this to be a boys vs girls challenge? For example, I wonder if excluding men from this meeting is jeopardising the chances to establish a real, honest dialogue on such a relevant subject – like we were hiding or worst, afraid to speak up”.
Getting to a point where everybody cares about diversity is still possible, but it needs to become a priority for more than half of the workforce.
By Miriam Forte
Cognito is a financial PR and marketing firm that provides strategic solutions for client challenges.comments powered by Disqus