1Current levels of diversity
11.In June 2015 Jayne-Anne Gadhia, Chief Executive Officer of Virgin Money, was asked by the Treasury to lead a review on women in financial services. As part of the review, original research was commissioned to establish the current levels of gender diversity in the UK financial services sector. The research covered 200 firms in the financial services sector. The key findings include:
- The overall average for [the] sample was 23 per cent female representation on Boards, but only 14 per cent on Executive Committees;
- The 23 per cent average figure for female representation on Boards disguised the underrepresentation of women holding Executive directorships with the proportion of female Non-Executive Directors (27 per cent) nearly four times that of female Executive Directors (7 per cent); and
- Where women did sit on Executive Committees, these tended to be in corporate and support functions—such as HR, communications, legal and compliance, marketing, strategy, treasury, audit, policy and public affairs.1
12.Jayne-Anne Gadhia’s review also noted that “the gender balance followed a ‘pyramid’ model, with the number of women diminishing in line with seniority”.2 The review found that “women made up only 14 per cent of Executive Committees in the Financial Services Sector. Too few women get to the top and there is a ‘permafrost’ in the mid-tier where women do not progress or they leave the sector”.3
13.Under the gender pay gap reporting requirements, firms are required to publish the proportion of men and women in each quartile of the organisation’s pay structure. The data submitted to the Government by 4 April 2018 by financial services firms shows the following:
14.The Association of British Insurers (ABI) stated that “a closer look also reveals a challenge in getting women represented in certain types of senior roles.”4 The ABI said:
As compared to men, [women] are least represented in actuarial, investment, finance and regional head and customer roles. Human resources and communication roles are the only areas in which our analysis of the most senior teams found more women than men.5
15.There is clearly an underrepresentation of women in senior positions in the financial services sector. The gender distribution of financial firms typically follows a “pyramid” model where the number of women diminishes in line with seniority. Furthermore, women are generally better represented in firms’ support functions rather than profit generating functions.
2 HM Treasury and Virgin Money, Empowering Productivity: Harnessing the Talents of Women in Financial Services (March 2016), p28
3 HM Treasury and Virgin Money, Empowering Productivity: Harnessing the Talents of Women in Financial Services (March 2016), p.8
Published: 13 June 2018