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Women in Finance Charter improves diversity at senior level

Women in Finance Charter improves diversity at senior level

Three-quarters of signatories to the Women in Finance Charter have increased or maintained the proportion of women in senior management, according to a review by think tank New Financial.

Analysis of 187 signatories found almost two-thirds (64 per cent) had increased the proportion of women in senior management over the past year while one in 10 (12 per cent) had maintained the same level of representation.

But the proportion of women had fallen at a quarter (24 per cent) of organisations signed up to the charter, which is designed to improve gender balance in senior management.

The analysis also found the overall average female representation as a proportion of senior management had increased marginally year-on-year among the signatories reviewed, from 31 per cent in 2018 to 32 per cent in 2019.

However, the think tank described this as a “slow pace of change” and “far short of parity”. According to New Financial, it equated to roughly 2,000 women joining senior management in the period.

Additionally, the analysis found that four out of five signatories had met, or were on track to meet, their targets for female representation in senior management, with targets ranging from five to 50 per cent in the most successful firms.

Yasmine Chinwala, partner at New Financial and co-author of the report, said: “The analysis shows how the charter principles are becoming increasingly embedded in how signatories approach diversity in their everyday business.

"There are firms that are taking this agenda seriously and driving strategic change. Those that do not take action, and swiftly, run a real risk of being left behind."

She added: “The Covid crisis has shown just how quickly companies can adapt. Aspects of diversity and inclusion were front and centre of the remote working transition and remain front and centre of plans for returning to workplaces.

"There is an opportunity now to challenge legacy thinking in all areas (not just flexible working), cement diversity as a strategic business priority and accelerate the pace of change.” 

The voluntary Women in Finance Charter was launched by the government in March 2016 to encourage the financial services industry to improve gender balance in senior management.

It has more than 370 signatories, covering 900,000 employees across the sector.

Signatories have the flexibility to choose their targets in recognition of factors such as variations in company sectors, types, sizes and structures.

They can also choose how their senior management population is defined under the charter, again due to differences in company types, sizes and management structures across the industry.

For half of signatories in the review, the definition accounted for up to 10 per cent of staff.

On a sector level, the global and investment banking signatories in the analysis had the lowest average proportion of women in senior management last year at 25 per cent, as well as the lowest average target of 28 per cent, reflecting previous years.

In contrast, the review found the government, regulator and trade body sector, as well as the building society and credit union sector, had the highest average levels of female representation in senior management last year at 40 per cent.