CompaniesJun 24 2020

Women in Finance Charter improves diversity at senior level

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Women in Finance Charter improves diversity at senior level

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.

Catherine McGuinness, chair of the policy and resources committee at City of London Corporation, said: “This review shows signatories are moving in the right direction, but we need to increase the pace. We all face a much more challenging environment now, and women have been hit particularly hard by the economic impact of Covid 19.

“I hope we can all contribute to further progress in the difficult times ahead and ensure we do not lose any of the progress which has already been made. As we adapt to new ways of working and rebuild our economy, let us use this opportunity to support women in finance.”

The review by New Financial comes after the Government Equalities Office announced in March that employers would not be expected to report their gender pay gap data for the 2019-20 year as a result of the coronavirus.

In normal circumstances, employers who fail to report their data could face court action and an unlimited fine.

Commentators have warned that diversity and inclusion efforts must not take a ‘back seat’ as companies grapple with different working practices brought about by the coronavirus.

chloe.cheung@ft.com