Women make up just 19 percent of senior executives in financial services. Slow progress compared with 28 percent women on boards of the UK’s five biggest banks. Comment Simon Mansfield, Managing Partner – DHR International.
Just 18.5 percent, or 246 CEOs, CFOs and board directors at the UK’s largest 280 financial services firms are women, according to FCA data provided to DHR International, the global executive search firm. DHR International says this includes banks, building societies, insurers and fund managers regulated by the FCA and PRA. Previous research by DHR shows that they are seriously lagging behind the UK’s five biggest banks, where 28 percent of senior executives are female. This suggests that women find it harder to move up the ladder at smaller financial services firms.
Whilst the big banks have been taking strides to improve diversity over the last few years, partly due to the introduction of targets for diversity, many smaller banks and building societies are still struggling to improve the proportion of senior women. The number of female directors has risen by a percentage point of just 1.2 percent, from 17.3 percent in 2015.
DHR adds that smaller banks are also lagging significantly behind their international competitors or comparators. 40 percent board members were women at the five biggest banks in continental Europe in 2017. However, as with the larger UK banks, European banks have been under more scrutiny from the press and government to improve gender diversity. For example, France introduced a mandatory quota for publicly listed companies in 2011, which aimed to have women make up 40 percent of boards by 2017.
DHR points out that the introduction of the Women in Finance Charter in the UK could put organisations under more pressure to improve diversity. The Charter was launched in March 2016, and asks all financial services firms to report on diversity DHR International explains that bigger institutions have the resources to implement changes to their boards more quickly, often through hiring executive search firms. Hiring an executive search agency with a wider range of contacts will mean a more diverse slate of candidates for organisations to choose from. Therefore, they have been able to select more women for high-level positions.
In other areas of financial services, gender diversity has also been improving at a similar rate as the UK’s smaller banks, building societies, insurers and fund managers. Previous research by DHR International showed that the proportion of female partners at PE firms and hedge funds has risen from 13.4 percent in 2015/16, to 14 percent in 2016/17.
Simon Mansfield, Managing Partner, London at DHR International, comments: “Encouraging diversity can be a long-term process – the progress for women at the top of these banks and building societies is promising, but somewhat slow. The percentage of women on the boards of the largest banks is substantially higher than the rest of the UK’s banks and building societies. This would suggest that firms that have been put under the spotlight are beginning to improve.”
“Initiatives to improve gender diversity such as setting quotas or using an external search agency have proved successful – and therefore other firms may begin to adopt these practices. Alternatively, putting in mentor schemes, flexible working or looking at ways to change company culture can also be effective ways to encourage women into more senior roles. However, these can take longer to take effect.”
“With the percentage of female senior executives at banks and building societies beginning to improve, there are distinct signs that the ‘glass ceiling’ is beginning to crack in the financial services sector.”