March 2018 • Topic: Driving diversity • by Yasmine Chinwala & Olivia Seddon-Daines
The UK government launched the HM Treasury Women in Finance Charter in March 2016 to encourage the financial industry to improve gender balance in senior management. This report is the first annual review of signatories to monitor their progress against their Charter commitments over the past year. And while they are off to an encouraging start – 85% have either met their targets or are on track to meet them – progress has so far been slow.
The Charter now has 205 signatories covering more than 650,000 employees across the UK. This first annual review analyses the submissions from the first cohort of 68 Charter signatories. This review also aims to offer the broadest possible insight into actions signatories are taking to drive progress towards their targets. We have focused on presenting data that we believe will help both existing and potential signatories in their efforts to improve gender diversity.
You can download a copy of the Annual Review here
The relatively low levels of representation of women at the highest levels of banking and finance is the main reason for the wide gender pay gap in the sector. This report shows what the first wave of signatories to the Women in Finance Charter are doing about it and the progress they are making towards the targets they have set themselves.
The highlights of the first Annual Review are:
1) Meeting targets: Just over a quarter (28%) of signatories have met their targets for female representation in senior management since the Charter launched 18 months ago and more than half (57%) say they are on track to meet their targets.
2) Moving in the right direction: The proportion of female senior managers is growing – more than three-quarters (78%) of signatories either increased or maintained the proportion of women in senior management during the reporting period.
3) But progress is slow: The percentage of women amongst senior managers increased by 3% on average in the first year and will need to increase by a further 27% in order to reach the average target for the cohort by 2022.
4) Laying the foundations: While a 3% increase across the cohort may seem a low figure, the signatories’ data clearly shows they have engaged in a wide range of activities in this first reporting year of the Charter in order to accelerate the pace of change in future years. Nearly half are using the Charter framework to set gender targets beyond senior management.
5) Top actions driving change: The most frequently reported actions signatories have undertaken are leadership and development programmes, widening accountability for improving gender diversity, and ensuring female representation on longlists and shortlists for senior roles.
6) An achievable number: About 2,300 women will need to join the ranks of senior managers across the 68 signatories in order for them all to meet their targets, equivalent to an increase of 16% on the number of senior female managers today. The 17 banks in the cohort will need to add two thirds of these 2,300 additional women.
7) The wider influence of the Charter: The commitments made by Charter signatories are also having an impact on their approach to non-gender diversity characteristics, particularly ethnicity.
8) Accountable executive is not just a title: The senior leader named as accountable for improving gender diversity is more than a figurehead. For 80% of signatories, the accountable executive has taken specific actions to drive gender diversity, for example advocating to build momentum around the Charter.
9) Link to pay: A third of signatories believe the link to pay has been effective as a signal of intent, even though many have not been through a bonus season yet and the actual portion of pay linked to diversity is modest.
10) The challenge ahead: Average female representation in senior management (across signatories who still have a target to reach) is 27.9%, with an average target of 35.5%.
Research methodology: This review presents annual update information reported* to HM Treasury by 68† signatories in September and October 2017. The data was shared with New Financial on a confidential basis.
All data has been anonymised and aggregated, and no confidential data has been attributed without consent from the relevant signatory. The data was analysed by Oliva Seddon-Daines and Panagiotis Asimakopoulos, under the supervision of Yasmine Chinwala and William Wright.
*The figures reported by each firm have not been verified by HM Treasury or any other body. Enquiries on any individual firm’s approach to the Charter should be directed to that firm.
†68 firms returned annual updates. Firms that signed the HM Treasury Women in Finance Charter in 2016 may not have been included where the status of the firm has changed or where reporting was not returned on time.
For more information on the Annual Review or on New Financial’s diversity programme, please contact Yasmine Chinwala on firstname.lastname@example.org
About New Financial: New Financial is a think tank and forum that makes the positive case for bigger and better capital markets in Europe. We think there is a huge opportunity for the industry and its customers to embrace change and reform, and to rethink how capital markets work. Diversity is one of our four core areas of coverage.
We provided data to Jayne-Anne Gadhia’s government-backed review of senior women in financial services, Empowering Productivity, and we are working with HM Treasury to conduct an annual review of the HM Treasury Women in Finance Charter to monitor the progress of charter signatories.