This article was published in the Huffington Post 3rd March 2016. Author Sophia Morrell is an associate director at Lansons.
Will we ever have gender equality in financial services? Genuine equality – parity of earnings, representation on boards and recognition of women’s talent, merit and contribution, in exactly the same way men have enjoyed since the City began?
For the uninitiated, “The City” can conjure up images of a Wolf of Wall Street style office packed with rich, braying brokers. Some may ask why in the global struggle for female equality, fighting for parity in this environment, a well-capitalised industry populated by typically educated and already privileged women, is of priority (and if it really is like Wolf of Wall Street, why would you want to?)
Fortunately, in the main the sector doesn’t resemble Scorsese’s raucous depictions, but its control of wealth is precisely why it matters. Financial services are the wheels and cogs of how the UK’s capital is allocated. As the financial crisis demonstrated, these institutions can have a disproportionate impact on all of our lives. The sector is in many ways exceptionally close to politics, and as a result its upper echelons are a powerful and influential place to be, replete with opportunities for the talented and ambitious.
It is not only unjust that women are excluded from having a fair shot at these jobs, but critically they are not equally participating in activities that affect the rest of the economy and society. Women are half of the population, but in many ways are being shut out of the capital allocation decisions that impact them.
The figures speak for themselves: only an estimated 2% of fund managers in the US are female, women only make up 16% of executive committees in European capital markets, and in 2013, out of 150 financial institutions globally, only 4% had a female CEO.
Yet the evidence shows, time and time again, that companies with diverse boards perform better than their counterparts. It stands to reason – financial services companies that embrace diversity policies have access to a significantly larger talent pool that others will miss out on.
The Young Fabians Finance Network, in association with ICAEW and Labour in the City, yesterday launched a report with actionable policy ideas on breaking down barriers. This includes contributions from voices within politics and the industry: the CBI, Shadow Chief Secretary to the Treasury, Social Market Foundation, the Women’s Business Council, ShareAction, Mentore Consulting, and The Finance Innovation Lab.
The contributors to the report examine the many obstacles conspiring to halt women’s progress in the industry, few of which are unique to the City. The lack of flexible working, expectation that women will shoulder the burden of domestic and childcare responsibilities, the ancient and often unconscious prejudice that women somehow aren’t quite up to the job, and the lack of confidence that dissuades women from going for the top positions.
The broad recommendations in the report could collectively smash these barriers. If women lack confidence to apply for senior positions, implement in-house schemes that focus on mentoring and sponsorship. Similarly, female executives could visit schools to start teaching young girls before they even enter the workplace that they are just as worthy of, and suited to, a financial career as their male classmates. Detailed company reporting of gender pay gaps would leave institutions running skewed remuneration policies with nowhere to hide. Senior management-led cultural change could encourage new fathers to take Shared Parental Leave. How might things change for all of us if there were genuine equality for fathers in the City who want to spend more time with their children?
There are encouraging signs at the moment that forces for change are gathering momentum. While there is still considerable work to be done, board representation is improving and on the right track. The targeted inquiries of the Women and Equalities Committee are bringing these issues to the fore in a range of sectors in the UK, and the imminent publication of the Gadhia Review will draw media and policymaker attention.
Senior management within financial services firms is not made up of homogenous sexists. The simple truth is that many do not see the imbalance in front of them until it is pointed out, as we have become so acclimatised to the “wallpaper” of man majority. By calling out environments where women are being excluded, intentionally or otherwise, we may be able to bring about the resounding shift that will create genuine equality for the next generation of women in finance. Who knows what change that could bring for society?