As diversity, equity, and inclusion initiatives face growing scrutiny, the financial services sector risks not only its reputation but its bottom line. In celebration of International Women’s Day, we’re grateful to Professor Geeta Nargund (pictured), Chair of leading UK gender parity consultancy, The Pipeline, for sharing her insight with us and making it clear why prioritising parity is not just the right thing to do — it’s a business imperative.
The financial services sector has been in the spotlight recently in terms of gender parity and equality reporting. Just last week, the FTSE Women Leaders Review report highlighted positive progress for women on boards in the sector – although this is certainly not a green light to rest on our laurels.
It is incredibly important to delve deeper into research findings, to get a true picture of where we stand so far in gender parity – and it is not reassuring. For example, the latest edition of our own annual report, the Women Count, investigated gender parity of executive committees specifically – the positions where true operational power of a business lie – and highlighted shocking backwards steps, with female representation in executive roles on the FTSE 350 falling for the first time in 8 years. Furthermore, fewer than one fifth of FTSE 350 Chief Financial Officers are female, a figure that is flatlining and has not grown since 2022. It is critical that when we assess progress for women in leadership, we are looking at the roles which are most likely to drive forward change for future talent.
Further putting the gender parity issues within FS under the spotlight was the recent Sexism in the City report – which detailed the glacial progress that has been made over the years, and why we should not yet be celebrating wins in this space. The report found that, whilst the percentage of women holding senior management roles had risen to 35% in 2022, this is only up from 27% in 2016, meaning that there has only been a change of around one percentage point per year. This does not constitute growth and is certainly indicative of the effort being made.
So why is the gender parity in executive roles continuing to fall and halt – particularly in the FS sector – despite there being a wealth of future talent? Sadly, this is the result of a mixture of failing DEI processes, inaction and political challenges. Progress in this space is fragile, and we must ensure it does not get left behind. This is particularly in mind given International Women’s Day this week – if we continue at the current rate; this could well be the last one that people feel motivated to take action over, which would be an immense loss to both societal and business progress.
A concerning shift in DEI landscape
We are all acutely aware of the fight against DEI presently, particularly the conversations happening across the pond. Bank of America, Deloitte and Meta are just a handful of the big names who have revoked or revised their DEI processes in recent months, a concerning backwards step. Although there are more reassuring murmurs in the UK, which has, overall, stood against these changes to date – we must not become complacent, and instead should reiterate the importance of not only keeping these processes in place, but bolstering them.
The cost to the financial services industry
Loss of support for women in the workplace would not just be felt socially, but economically. The World Bank has stated that equality for women in employment has the potential to improve global GDP by 20%. This reiterates the immense business opportunity here – as they too can reap rewards. For example, BlackRock’s 2023 report shows that companies with the most diverse workforces achieved an average 29% higher annual return on assets per year, compared to their least diverse counterparts. There are generations of highly intelligent, capable and inspiring young women who may soon be ready to step into the FS sector – but what is their motivation if they aren’t seeing women already succeed in these key leadership positions? Lack of support and DEI processes could not only push women already in the sector out but add a barrier for those wanting to join.
Making meaningful changes
Surface-level change is not enough. It must be sustainable and meaningful. Businesses who have a genuine desire to turn the tables are the ones who will unlock the benefits.
This can be a hard road to navigate, but often, change starts in the same place. Most notably in the FS sector, this is workplace culture, and organisations should review, and possibly rethink, their workplace dynamics. To try and shift the tide, workplaces should be environments in which women are encouraged to progress, supported to exceed, and allowed to thrive. This goes far beyond ‘box ticking’ and numbers on a page; it is a value that must be at the core of a company. Sadly, many women still experience toxic working environments; filled with sexism. This can take shape in many forms, one being picking up additional roles (such as admin, or event planning) that are seen as ‘female tasks’, detracting from their real talents.
There are a few ways in which businesses can eradicate these issues, in the hopes of seeing positive change, including:
- Implement progressive policies: The balancing act of work and motherhood is a stressful reality for many – and shockingly so overlooked. Flexible working, parental leave, and understanding women’s health issues are small policies for a business, that come with an immense impact for the employee. This breathing room could allow so many women to remain in roles they otherwise may have had to leave – thanks to time and empathy being offered.
- Leading from the top: Companies who have leaders that champion gender parity through unrelenting support drive real progress. Show steadfast commitment to wanting the best for your entire workforce, stand against removal of DEI protocols that could push out your key talent, and show that career progression is an equal possibility for all.
- Holding yourself accountable: Similarly, progress accelerates when leaders are held accountable, especially when this is data-driven. Set targets and stick to them; and if you fall short – be transparent and work on the reasons why.
- Show commitment: Positive change doesn’t happen overnight – but negative change can. Refrain from celebrating victory too quickly and be sure to tie gender parity to organisational strategy; setting key milestones and pushing to achieve them.
Looking ahead to an inclusive future
As with many industries, FS businesses rely on fresh ideas, a range of talents and different lived experiences to improve performance; elements that are brought in by a diverse pool of talent. I hope to see a future where gender parity is our norm, but until then, we must fight to challenge DEI pushback, and ensure correct support is implemented wherever possible. Our current system is repressing women at the top – and we will pay a huge price if this continues.
