Women in finance Contents

4Industry initiatives

48.The Committee took evidence on the various initiatives the financial services industry has put in place to improve gender diversity including changes to recruitment and promotion practices, measures to support women during and after maternity leave and flexible working. While gender diversity policies within the financial services industry are important, the Committee also took evidence regarding the attitudes and leadership role of firms and their management.

49.Anne Richards, Chief Executive Officer of M&G Investments, has observed the changes in the financial services industry’s attitude and approaches to further gender diversity, stating that:

The big shift that we have seen more recently […] is a realisation that, […] the system itself has to be structured in such a way that there are not unintentional impediments along the way. […] we need to disaggregate the process […], right from the earliest recruitment […] through [to] how pay is evaluated, how performance is evaluated and how promotion has taken place [to examine] unintended hurdles or barriers.39

50.PricewaterhouseCoopers shared Anne Richards’ view that focusing on core processes is necessary to effect change and argued that there needs to be greater focus on policies and processes to drive diversity:

Although financial services firms are increasingly active on the topic of diversity and inclusion, there is less evidence of a structured policy and strategy that is driving this activity, or that changes are being made to the core people, policies and processes that will really “move the dial”. This does not mean what has been done so far is not valuable, and there are some leading practices in some financial services firms. However, there is a clear need across the sector for firms to take time to articulate their approach and goals in this area (ideally aligned with their broader business strategy), and work to embed these goals and ambitions in their day to day people, processes and policies.40

Recruitment and promotion practices

51.Michael Henning, Head of Investment at Mason Blake, argued that firms may be unfairly selective when recruiting. “A lot of firms are possibly very fixated on their culture and the team fit that they refer to. That will perhaps mean hiring people who are very similar to what they already have, and stifling diversity.”41

52.The Committee also received evidence from a E2W, a recruitment firm, which stated that recruiters may be incentivised to fill vacancies quickly and therefore do not widen their search for more diverse candidates:

Qualified female candidates are, in all but a few areas, scarcer than the equivalent male candidate. […] they cost more to put forward than a male candidate […] One of the biggest inhibitors to moving the dial [for diverse recruitment] is that the recruitment teams […] are rewarded and measured on (low) cost and (short) time to hire; by putting a cost of hire [target] on their recruitment teams [and recruitment agencies], many firms are actively discouraging them from going the extra mile and finding the more elusive candidates. As a result, gender targets are low priority or aspirational.42

53.Jayne-Anne Gadhia, Chief Executive Officer of Virgin Money, stated that in order to overcome the problem of recruiters not considering a diverse pool of candidates, Virgin Money “[asks] head hunting firms [to] make sure [they] give […] a list that is roughly 50:50 male and female of people who are very competent to do the job.”43 The Committee also heard about initiatives to widen the pool of candidates. Jon Terry, a Partner at PricewaterhouseCoopers, pointed to the asset management industry’s initiative to ensure firms go to a wider group of universities, “not just those universities and degrees that are dominated by men from public schools.”44

54.Jayne-Anne Gadhia also told the Committee that some firms have made efforts to mitigate unconscious bias in recruitment:

We have […] provide[d] unconscious bias training to everyone within Virgin Money in order for them to be able to understand what their own prejudices might be. […] Through all of our recruitment we challenge any recruitment decision that is made to make sure it is made for objective reasons and, as far as possible, skill and experience is the primary driver of any recruitment decision that we make.45

55.Jon Terry noted the important role of senior leaders in influencing recruitment practices:

One of the problems is that the vast majority of CEOs and boards absolutely get the business benefits of diversity and absolutely get the challenge to group think, but the vast majority of recruitment in organisations is not done by senior leaders. There are a lot of decisions that are made that are […] safe and short-term decisions, whereas the benefits tend to come over the medium term. That is an issue particularly in many financial services firms, which are very focused on the short term and on short-term results. That is an issue, so part of the challenge process needs to come not just from HR departments but from senior leaders in organisations, which is really important. There are a number of things that can be done that can make that whole process much easier, but it needs to be owned and delivered by the senior leaders.46

56.PricewaterhouseCoopers (PwC) submitted evidence explaining how firms are making changes to recruitment practices to improve diversity:

In the area of recruitment, firms have successfully improved their processes through a number of approaches. Some examples include the following […] attracting more women to apply for jobs by remunerating executive search firms for successful diverse candidates; reviewing job descriptions to remove “masculine” language; and increasing the time that job vacancies are left open. Increasing the number of successful female applicants by ensuring that interview panels are diverse; issues such as flexible working are discussed at the beginning rather than the end of the process; and including a second review and challenge of assessment decisions for identified candidates. Increasing the number of acceptances from women who are offered jobs by matching each successful candidate to a similar peer in the organisation before the role commences; and ensuring follow up is swift and consistent on areas such as flexible working.47

57.Susan Allen, Head of Retail Distribution at Santander UK, also emphasised the importance of reviewing job descriptions and requirements so that they accurately reflect the nature of the job and do not discourage potential candidates from applying:

Some of the bigger jobs [at Santander UK] are in London, and we are trying to encourage people [from Santander UK’s regional branches] to come into some of the head office teams. I was out talking to some people in our branches and asking why they did not put themselves forward. I was showing jobs and saying, “You would be great at this”, and they said, “But, Susan, the job description says you need a degree and I do not have a degree”. I thought, “Why does the job description say you need a degree? You actually do not need a degree”. I came back to our HR team and said, “Please take this off because you do not need a degree to do this job. We need people with the right attitude and approach but we do not need a degree”.48

58.In addition to recruitment, Jon Terry also argued that it is important that firms manage diverse talent within their organisations effectively:

The overall focus on socalled pipeline management is really important […] Part of that is highlighting really able, diverse individuals within the organisation and that is the role of both HR and the business leaders. […] If they are required to have a pipeline and a succession framework that forces them to look at all their diverse individuals and to put in place […] equal opportunities […], that is when you start getting real acceleration.49

Maternity leave and return programmes

59.Maternity leave has been discussed as a barrier to women progressing in finance. The Committee received evidence on initiatives firms are taking to mitigate this impact.

60.Susan Allen argued that maternity leave and childcare do not necessarily have to impact a woman’s career negatively and there are measures that can be taken:

It [is] not actually maternity as an issue, but there [is] an issue about flexible working [and] there [are] issues around confidence, and also people not really understanding what roles […] there [are]. They are the sorts of things that we are now taking very clear action on, in terms of coaching and developing those women, making sure that we are more transparent about roles and opportunities across the organisation, and really giving people the opportunity to understand different career paths.50

61.The Committee received written evidence that firms are implementing returnship programmes. The Personal Investment Management and Financial Advice Association noted that:

The number of women returners seems to have increased in the last few years. […] Some […] firms have recently implemented a returnship programme. These programmes need to be encouraged and put into place along with flexible arrangements to facilitate the ‘back to work’ experience.51

Flexible working

62.When asked about good practice in industry when it comes to improving the balance and profile of women across a range of roles in the financial services, Jon Terry pointed to flexible working:

Flexible working is absolutely crucial, not just for women but throughout the whole organisation. An organisation focused on creating an inclusive workplace where everybody, irrespective of gender, ethnicity, background or sexual orientation, has equal opportunities to fulfil their potential has to look at the way in which jobs are fulfilled and carried out. There is still, in parts of the industry, too much of a traditional way of looking at roles. […] There is a real problem with the lack of women in middle management, let alone in senior management roles, and a lot of that is to do with the working style, the working hours required and the lack of flexibility. But when you look at the roles themselves, many of those could be done much more flexibly. We have seen a lot of improvement in that, but there is still a long way to go.52

63.In contrast, evidence gathered during the Committee’s Women in Finance engagement event, highlighted that “flexible and part-time working are often viewed as a “female thing” and can act as a barrier to career progression. “53 Nevertheless, the Committee also heard that this perception could be eliminated by encouraging men to take up flexible working:

All staff should be encouraged to make use of flexible working and senior men should role model flexible working patterns to combat the perception that it is a “female thing”. It [is] important that men take up flexible working […] so that it becomes “normal” for men to work flexibly in order to take on family responsibilities.54

64.Anne Richards agreed with the importance of encouraging men to work flexibly:

Part of the way that we succeed for women is that we succeed for men. What I mean by that is that the more we can give opportunities for men, for example, to take advantage of shared parental leave, to take advantage of flexible working, to allow them, if they have a family, to share in those family responsibilities, the more we will also help women.55

65.To embed flexible working into an organisation, Michael Henning argued that the encouragement must “come from the top, with people showing that, for example, working from home a couple of days a week, if need be, does not mean they are working any less.”56

66.The Committee received written evidence from Zurich Insurance Plc on the how flexible working and gender balance are not solely for the benefit of women, but for the entire workforce:

Instead it is about men and women being equally appreciated for the individual work / life choices they make, either in the long or short term; whether this choice involves full-time or part time work, balancing career and caring responsibilities or even leaving the workforce, for a time, to become a full-time carer for children or elderly parents.57

Management driving change

67.When asked about how firms can drive the gender diversity agenda, Susan Allen stated that “one of the most important things is […] leadership from the top”.58 Susan Allen argued that “the things that you would do to ensure the success of a change programme are […] having clear leadership from the top, having clear accountability of the senior leaders and having some objectives that you hold yourself to account for.”59

68.The Committee has heard that the drive for greater gender balance is being taken seriously by firms’ leadership. Jayne-Anne Gadhia noted that:

One of the recommendations of the Women in Finance Charter is that firms agree a strategy with targets and they nominate one of their executive committee to take those targets forward. [Of the firms that have signed up to the Charter] 70 per cent […] have nominated their CEO. […]

Part of the problem—much as HR people are great and do a hugely positive job—is sometimes these sorts of tasks are put into HR and therefore they come off the business agenda. Those organisations that realise that this is a properly significant business and economic issue tend to be the ones that put the onus on creating the right diversity and the right gender environment on their CEO or on their commercial team. That is powerful, and it is something I have been very pleased about with the Charter.60

69.Anne Richards also informed the Committee about the importance of the role of middle management and how firms should support middle management:

It is really important that you set your management teams up for success. What I mean by that is that it is not enough simply to point out that they need to improve the diversity, go through unconscious bias training and shock themselves. It is not even enough to make sure that you take the bias out of the way you do job adverts. You need to help them learn to manage more diverse teams and less homogeneous teams, because they are harder to manage. It is much easier to manage a bunch of people who are very like you. You have to set them up for success. That is an important part of it.61

Anne Richards argued that middle management should be encouraged to be willing to take risks:

If you are a middle manager who has a business-critical project to deliver, you might feel that hiring someone who is not cookie-cutter is a big personal risk to your career, because if it does not work out you could be on the hook for something. You will tend to gravitate towards the perceived less risky hire, even if that means you might be consolidating groupthink so the risk might be hidden. There is a bit about not just releasing talent but encouraging and empowering them to try something that might have been different to what they have historically done. That is a critical part of this, as well.62

The extent to which gender diversity is a priority to firms

70.When asked why firms are not doing more to address the barriers to gender diversity, Jon Terry argued that firms are taking a conscious decision to put this issue down the priority list:

If you ask any board—and I am sure this Committee has done and will continue to do that—“Is diversity important to the board?” the answer will be an overwhelming “Yes”. Ask them, “Is it in your top four priorities?” and very few will say, “Yes”. Particularly where there is such a focus on cost control and revamping the business models, only those top three or four priorities get the real effort required.63

71.Dame Helena Morrissey, Head of Personal Investing at Legal & General Investment Management, shared this view and noted that “while there are a number of specific diversity initiatives […], these are still often perceived as “special interest”, rather than core to business strategy.”64

72.The Committee supports firms’ initiatives to improve gender diversity in recruitment and promotion, such as ensuring gender balanced shortlists and revising the language used during recruitment. Nevertheless, the Committee recognises that unconscious bias can influence recruitment decisions as firms can be too focused on their culture and the “team fit”.

73.The Committee notes that firms can have unnecessary legacy requirements in their recruitment processes, such as particular academic qualifications or requiring certain hours to be worked or frequent travel to be almost compulsory. The Committee strongly encourages firms to revisit their recruitment policies and practices on a regular basis to ensure that unconscious bias is eliminated at every stage of the process. When revisiting recruitment policies and practices, firms should continue to challenge the language used during recruitment and ensure that stated requirements for roles are actually necessary for performing the roles and are not deterring potential applicants. The Committee recommends that firms’ senior leadership proactively ensures that barriers to gender diversity in recruitment are understood throughout the organisation and are removed.

74.Maternity leave can have a negative impact on women’s careers. It is positive that industry has recognised this issue and is trying to mitigate it by keeping women on maternity leave up to date on live issues in the industry and designing schemes to assist women when they have returned to work. The industry should continue these efforts. The Committee also believes that the Government and employers should improve parents’ awareness of the opportunities to share childcare responsibilities, namely through the Shared Parental Leave scheme. Greater prevalence of men taking childcare responsibilities and parental leave could help mitigate the impact of maternity leave on women.

75.The Committee believes that firms should also consider extending the initiatives to support women during and after maternity leave to employees who have taken time away from work for other caring responsibilities.

76.Some firms are offering opportunities for flexible working. However, this can be perceived as a “female” approach to working which can impact women’s progression negatively. To remove any stigma associated with flexible working, more of those holding senior roles in industry, especially men, should lead by example by working flexibly. The Committee believes that flexible working would bring benefits to the entire workforce as it enables all employees to balance personal responsibilities with their careers. Firms in the financial services sector should reconsider the working hours required for roles. The Committee believes it is unnecessary for some roles in the financial services sector to still be carried out with long working hours based in the office, particularly with modern developments in technology. The Committee recommends that firms consider how roles could be done more flexibly.

77.Many of the efforts made by industry to improve gender diversity have been driven by firms’ leadership. Even though leadership recognises the importance of gender diversity, gender diversity is often not considered a top priority within organisations, displaced by other business concerns. The Committee encourages the financial services sector to consider gender diversity as core to business strategies and to uphold gender diversity as a priority.

78.The Committee recognises the importance of middle management for driving gender diversity The Committee encourages leadership to empower middle management to take risks and challenge their own assumptions and unconscious bias when recruiting and to ensure middle management are appropriately trained to manage more diverse teams.


39 Q151

40 PricewaterhouseCoopers (WFN0008)

41 Q86

42 E2W Limited (WFN0003)

43 Q23

44 Q92

45 Q34

46 Q91

47 PricewaterhouseCoopers LLP (WFN008)

48 Q183

49 Q108

50 Q152

51 Personal Investment Management and Financial Advice Association (WFN0022)

52 Q100

53 Treasury Select Committee Women in Finance Engagement Event (WFN0027)

54 Treasury Select Committee Women in Finance Engagement Event (WFN0027)

55 Q156

56 Q111

57 Zurich Insurance Plc (WFN0009)

58 Q180

59 Q180

60 Q11

61 Q180

62 Q191

63 Q119

64 Dame Helena Morrissey (WFN0021)




Published: 13 June 2018