Clare Jupp, director of people development, Brightstar
Speaking at a Treasury committee evidence session on 12 June, FCA executive director of supervision for investment, wholesale and specialists Megan Butler said the industry was still at the “early stages” of its “journey” towards gender equality.
This is obviously disappointing to hear, but in the past three years there has been a definite move in the right direction, and certainly the issue of women in finance has captured the attention of the sector and its trade bodies, publications and awards events.
The financial services sector has taken positive action by showing its commitment to the Women in Finance Charter. As the ‘official’ response by the Treasury to the Gadhia Review and a positive attempt to address the imbalance in financial services, the charter was introduced in 2016.
Brightstar became a signatory in the same year and I have seen nothing but benefits and positivity as a result. It’s simply the right and obvious thing to do.
In the UK, financial services comprise almost 50 per cent men and 50 per cent women, yet the gender pay gap in the sector is second only to the construction industry in its size.
A recent BBC report stated that the average gap for the sector was 23.25 per cent in favour of men. Additionally, eight of the 10 firms with the largest pay gap are financial services firms.
We are all aware that our sector is full of women, yet the truth is that they are to be found predominantly in the lower-paid roles and are not adequately represented at the most senior levels. The charter is a means to address this imbalance.
I received an amazing response at a recent London Women in Finance event that I hosted and spoke at and it was hugely encouraging to see plenty of men in the audience, including those at the most senior level.
However, alongside the ethical argument for gender equality, there is a compelling argument that says it brings better financial results.
The Peterson Institute for International Economics and EY released a study that revealed a significant correlation between women in leadership and company profitability.
The net profit margins at companies with at least 30 per cent female leaders grew by up to 6 percentage points more than companies with no women in the top ranks.
A frequently cited 2015 report by McKinsey & Co found that companies in the top quartile for gender diversity are 15 per cent more likely to have financial returns above their national industry medians.
Another popular piece of research, conducted by diversity consultancy firm Catalyst, found that Fortune 500 companies with at least three female directors have a 42 per cent higher return on sales and 53 per cent higher return on equity.
The new Peterson Institute/EY survey looked at nearly 22,000 public companies across 91 different countries – about half of which had no female executives. Also, 60 per cent had no women on their boards and fewer than 5 per cent had female CEOs.
Recently, Credit Suisse conducted research that showed where at least 15 per cent of the boardroom were female, firms were 50 per cent more profitable.
Broadening the composition of the board increases the size of the candidate pool and, more importantly, helps expand perspectives at the top.
While most chief executives recognise the importance of appointing directors of different ages and with different kinds of educational backgrounds and expertise, there are many who tend to underestimate the benefits of gender diversity.
Experts believe that companies with women directors deal more effectively with risk, and not only better address the concerns of customers, employees, shareholders, and the local community, but also tend to focus on long-term priorities. Women directors are also likely to be more in tune with women’s needs than men.
For those concerned about their organisation’s reputation and possible future investment, it is important to note some more research carried out by Catalyst.
It shows a strong link between the presence of women on boards and corporate reputations. Female directors serve as role models, and therefore, improve female employees’ performance and boost companies’ images.