Politicians and Bankers Address Gender Diversity in the Financial Sector
A survey recently conducted by recruitment firm Robert Walters showed that 77 per cent of women feel under-represented in business leadership. A similar conclusion reached by consultants PwC suggests that many women see no career progression in the financial services industry causing them to leave or to avoid the sector altogether.
There is a widely-held perception that senior levels in financial institutions are a boys only club. Following a study commissioned by the Government regarding women in the financial industry, Jayne-Anne Gadhia, chief executive of Virgin Money, has released a series of proposals based upon her preliminary findings five months into the review.
The key concern is that women are under-represented in senior positions in the financial services sector. The proposed solutions put forward include linking executive bonuses to the number of women in senior roles according to proscribed targets. This would require banks to inform the public as to how many senior women they have, together with the appointment of an executive responsible for ensuring gender diversity in senior positions.
Among those politicians reacting to the proposals, John Mann, Labour MP and the longest-serving member on the Treasury select committee, said: “I think the proposals are good, pragmatic, and I think it will have an impact on bank culture — although it’s not a panacea in any way.” He also highlighted a “laddish” culture in the banking industry as a problem which he believes the inclusion of more women in prominent positions will help to resolve.
George Kerevan, also on the Treasury select committee and Scottish National Party MP, believes the proposals to make “commercial sense as well as being the right thing to do.”
“Research shows that having more women at board level improves the bottom line. We all know that remuneration at senior levels in the financial community is target-driven and paid in large measure through bonuses,” he said.
Reflecting Other Sectors
The political response is largely in keeping with party policies supporting the use of quotas and penalties as a solution for the under-representation of key demographics in particular sectors. The response from bankers to Jayne-Anne Gadhia’s proposals, whilst not openly supportive, recognised the problem and focused on current and projected resolutions.
The British Bankers’ Association said that, although the banking industry has made “significant strides” in improving female representation at all levels, it “cannot afford to be complacent on this crucial issue”. It added: “We want to ensure that best people can succeed in banking — regardless of their gender or background.”
Michelle Pinggera, who is a Goldman Sachs Partner, said: “We welcome this review and look forward to working with our industry to help drive further positive change.”
Lloyds has implemented a plan to have 40 per cent of senior roles held by women by 2020, a target the Royal Bank of Scotland claims to have already reached. This is according to Marjorie Strachan, head of inclusion at RBS, who indicates that of 5,000 senior roles in the RBS organisation, close to 40 per cent are now held by women. Strachan believes that the organisation must improve upon this ratio.
Like George Kerevan, she also noted research showing that organisations with greater gender diversity out-perform by 30 per cent those that are not gender diverse.
The lack of substantial female representation at senior levels in the financial sector has become a key concern in the industry with politicians and bankers calling for a culture shift but ultimately in disagreement as to whether the solution is a political one or a matter best left to corporate policy.
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