Women in Finance Charter review shows small steps forward and one big step back

Measuring the average gender balance in top positions in the financial services industry, the recently published review revealed it remained at 33% in 2021 — the same as the previous year.

The first stationary figure since the Charter was launched to mirror the government’s goals to boost women in senior management roles clearly shows there is more work to be done.

The report — which analyses annual updates from 209 signatories that signed the Charter before September 2020, provided an annual update to HM Treasury in September 2021, and have at least 100 staff — shows the highest number of signatories (70) reporting a drop in female representation since the Charter was established in 2016.

“I am concerned to see progress stagnating,” said Amanda Blanc, group CEO at Aviva, and Women in Finance champion. “Frankly, up to now there has been too much tinkering at the edges and not enough fundamental change.”

She added that sweeping change was undoubtedly hard, but it was vital to hit the nail on the head. “For the sake of women, companies and society, we’ve got to work quicker and harder.”

A major reason for signatories to improve their figures is that a balanced workforce is good for businesses and customers, not to mention it attracts more investors.

However, there is a glimmer of hope to be found in the review, with more ambitious targets being set and met. 

In another first, over 400 firms — covering one million employees — are now signed up, with all pledging to set internal targets to improve diversity and publicly report on progress, in addition to supporting more women entering senior financial services roles.

The report revealed that 78 (37%) of the 209 analysed signatories met their targets for female representation in senior management. The 78 companies have a wide range of targets, from as low as 5% up to 50%, with the average standing at 35% (lower than the 37% average for the whole cohort of signatories).

The largest number of businesses in this group (17) that met their targets are from the UK banking sector, and include Unity Trust Bank, Danske Bank (UK), Monzo Bank, TSB, NatWest Group, Starling Bank, Metro Bank, Sainsbury’s Bank, Triodos Bank and Barclays.

Some 33 signatories met their targets ahead of their deadlines, such as Yorkshire Building Society, HSBC UK, Paragon Banking Group, OneSavings Bank and Atom Bank.

A further 41% of businesses that have targets with future deadlines said they are on the right road to meet them.

Out of the 76 signatories that had a 2021 deadline, 45 hit their target, while 31 missed.

John Glen, economic secretary to the Treasury, stated: “I welcome this year’s progress, but setting targets is just one part of the process — I am calling on firms to double down on their commitments and continue to deliver greater gender equality in the workplace.”

Reactions from women in the finance industry

Commenting on the review, Nicola Firth, founder and CEO of Knowledge Bank, said: “This makes depressing reading and I’m afraid that efforts to make pretty scant progress look positive will be demoralising for many women in finance hoping for real change.”

Nicola believes it sends a message that the subject is not being broached seriously.  

“There are a raft of talented and motivated women in financial services, and their equal representation at the top table of financial firms should be a matter of course.” 

Juliet Baboolal, Partner at Seddons, touched on the most common reasons that were cited for the absence of progress in the review: restructuring and the pandemic.

“While these factors may have delayed the progress, there appears to be a general lack of accountability across the sector and, without accountability, female leadership will not and cannot become a core business objective. 

“Firms have fallen short of focusing on their diversity agenda and need to actively and purposefully address this shortcoming to reaffirm the need for female leadership.”

Juliet added that this involved a basic identity shift, since humans are inclined to veer to people who are similar, which is why men seek out other men when leadership opportunities turn up, and women are still considered to have low ambitions.

“This underrepresentation of female leaders promotes the current status quo, and it is only when women have power in sufficient numbers will we create a society that genuinely works for all women,” she commented. 

Alison Houghton-Corfield, national relationship director at Master Private Finance, also emphasised the affinity bias. She said she had too often witnessed the habit people have of connecting with those who have a lot in common, claiming that it is widespread in the industry. 

“We are all different and our differences should be embraced and celebrated as our strengths, and this will lead to dynamic, diverse and inclusive businesses,” the not-so-shocked, but disappointed, Houghton-Corfield said.

She stressed hiring someone who shared the same kind of interests, experiences and backgrounds would not help a team expand and diversify.  

In addition, Houghton-Corfield feels conformity bias — when people act like those around them — “leads to closed minds and a lack of authenticity within business”. This kind of peer pressure also stops people voicing their beliefs, she claimed. 

The fact that 31 out of 76 signatories with a 2021 target hadn’t met their goals makes Houghton-Corfield — who acknowledges that the pandemic and the big reshuffle have a part to play in the outcomes — wonder if those companies really know what needs to be done. 

She also considers the number of signatories that delayed or didn’t publish an online update of their progress (41%) makes female representation seem like a low priority. 

An additional 97 signatories (with 100 staff or less) provided an annual update, and seem to be the ones leading the best example, with 76% of them achieving their targets, while another 16% heading in the right direction for their deadlines. 

Those in the smaller signatory category that have met their targets include Bridging Finance Solutions (60% target), Hope Capital (45%), VIBE Financial Services (100%), Brightstar Financial (45%), Connect IFA (40%), and Coreco Group (50%). 

“Along with this, the average level of female representation in senior management [for the group of smaller signatories] sits at 50% — and this is an accolade to be applauded,” Houghton-Corfield stated. 

“Perhaps the bigger players can learn from the smaller, agile firms that have achieved their targets. To do this though, they need to really look at where all the power, status and influence sits within their organisations and take positive authentic action to balance representation.”

Eager to see if things will change next year, and if the cohort will achieve their targets, Houghton-Corfield highlighted that change would take time after so many years of inherent behaviour. Yet she is happy to see progress and the conversations and strategies that are in play. 

Alison Pallett, managing director of sales at LiveMore, said: “Basically, firms must try harder, not just where women are concerned, but also [for] ethnic minorities. 

“Firms need to stop using International Women’s Day to make soundbite posts — they need to formulate an action plan and deliver on it.” 

Pallett stipulated that one of the challenges was looking at how to attract more women to apply for senior roles and believes imposter syndrome and fear of failure is holding many women back. “It’s all about building a culture of confidence for female employees so they feel empowered to reach for roles where they don’t fulfil 100% of the job specification,” she noted. “This can be easily managed by putting in place a development plan to bridge any gaps, along with making sure help and support is available.”

“My experience over the years is that, given the correct support mechanisms, the payback to firms is immeasurable, with strong loyalty and passion for the role and company,” she concluded. 

Tiba Raja, director at Market Financial Solutions, said: "When it comes to diversity and inclusivity, the most dangerous thing we can do is to assume there will be steady progress, simply because it feels like things are headed in the right direction.”

She believes two things must happen simultaneously to improve female representation in the sector, especially in senior positions. “Company policies must not discriminate against either gender in terms of how, when and where work is carried out, while cultures must be welcoming and supportive, eradicating any traditions of this sector being a boys' club.”

Tiba said a lot of challenges have presented themselves during the pandemic, and more recently, the cost-of-living crisis, however D&I cannot be thwarted.

“All of us as employers must ask the hard question: are we really doing enough to support and nurture staff, regardless of their gender, ethnicity or background? Let us hope that we see figures moving in the right direction again next year and beyond."