Gender diversity in financial services has not increased significantly since 2005, according to the latest research from the Financial Conduct Authority.
The stubbornly static figures – with women making up a paltry 17 per cent per cent of FCA-approved individuals – show little progress, even though there is a higher proportion of women (23 per cent) in senior roles at larger companies.
Investment institutions are most likely to have a greater diversity in senior management roles – some might say because they have the money to put into the development of a diverse workplace.
But that is a flippant, lazy answer that would not do credit to the person saying it.
The Women in Finance Charter has been in place since 2016 and more than 330 companies committed to implementing its recommendations.
Yet there has still been too little improvement in diversity across financial services.
The FCA survey stated: “There is evidence to suggest that women in senior positions at UK financial firms tend to represent support functions, rather than profit-generating ones (The Female FTSE Board Report, 2017).
“But while the lack of diversity at the top of UK financial firms is well-documented, the composition of staff across different levels of seniority has not been studied systematically.”
Why the different levels have not been studied is open to interpretation, but that it has not been should be a cause for concern.
It begs the question as to whether there is still a largely misogynistic culture in financial services.
In all honesty, I suspect that there is, but I do not know the real answer. I am sure many people will have stories to both support and deny it.
However, it would be wrong to say there has been no improvement whatsoever.
When it comes to major institutions, the survey identifies that, of a sub-sample of 94 major institutions, the diversity at senior management level has doubled from 9 per cent in 2005 to 18 per cent in 2019. Undoubtedly, this is progress.
But when you consider that the entire female population of the UK is marginally more than half the total population, according to the latest data from the Office for National Statistics, this figure is still woefully inadequate.
There are likely to be myriad reasons for a lack of gender diversity across financial services if you ask those in charge of companies with the lowest diversity figures, but there is a much bigger reason for companies to really start paying attention to the composition of its workforce – especially the senior roles within the business.
There is a wealth of research that shows companies with a higher level of diversity in the business are more profitable.
For example, the International Labour Organization’s Bureau for Employers’ Activities surveyed 13,000 enterprises in 70 countries for its 2019 Women in Business and Management report, where there was clear evidence that a more diverse business culture led to higher profits.
Three quarters of those surveyed who were monitoring gender diversity in their business saw profit increases of between 5 per cent and 20 per cent, the majority seeing a 10-15 per cent increase.
Any company being offered a double-digit increase in their profits would most likely snap your arm off to get it, yet many refuse to accept it can be achieved with a better gender split.
Deborah France-Massin, director of the ILO Bureau for Employers’ Activities, said: “When you consider the efforts companies make in other areas to get just an extra 2 or 3 per cent in profits, the significance is clear. Companies should look at gender balance as a bottom line issue, not just a human resource issue.” Of course, she is right.
The unsurprising knock-on of this is that increasing female employment in companies has a positive impact on a country’s GDP, according to the ILO survey. This is no figure plucked out of the air either, it is based on data from 186 countries between 1991 and 2017.
So, you would think that moves to make companies more diverse should not need to be legislated for. It should be done automatically because, if for no other reason, it is likely to make the company more profitable.
However, even when it comes to wage parity, there is still a gender pay gap that has become entrenched and, despite the Equal Pay Act having been in force since 1975, we see little real progress.
Under the current legislation, every private company with 250 employees or more has to report each year on the pay differential between men and women.
This has been happening since April 2018, but as yet it is hard to see any palpable benefit as even the naming and shaming of companies who persist in paying women less does not seem to have prompted a significant change in approach.
If your company is looking for a reason to address the gender diversity in your business, few can surely be better than “it is likely to make your business more profitable”.
It is time to look at your company to see if you are doing everything you can and should to improve diversity, and, consequently, your bottom line.
Alison Steed is a freelance journalist
