FTSE 100 CEOs are more likely to be called Steve than they are to be women, who account for 50% of the population, unlike men called Steve. Laura Miller explores why women need to be better represented at the top of companies…
The government has set targets for 33% of board members to be female by the end of 2020 and data released in July by the Hampton-Alexander Review shows the FTSE 350 could meet the target if current progress is maintained.
Finance is making all the right noises too. It is promising that so many investment management firms have signed up to HM Treasury’s Women in Finance Charter, which commits to accelerate the progression of women into senior roles.
But while this commitment is encouraging, any quantifiable data to show this is working is thin on the ground.
One indicator of success would be a narrowing of the gender pay gap, which, in reality, is really a gender seniority gap. After all, higher salaries follow promotions. Yet of the five sectors reporting the biggest gender pay gaps in 2018, PwC found only investment management failed to record an overall improvement.
The sector’s heel-dragging has prompted questions about whether it is really taking the issue of women’s exclusion from the boardroom seriously.
Dame Helena Morrissey, chair of the Diversity Project and recently appointed non-executive director at St James’s Place, says: “We still have a problem convincing many mainstream fund managers that diversity is a business issue, rather than political correctness.”
The International Monetary Fund last year found women comprise less than 2% of global financial institutions’ CEOs, and less than 20% of executive board members. A predominance of men in senior positions in financial services companies is a symptom of broader problems.
Dame Inga Beale, a former chief executive of Lloyds of London and the first women to take the helm in its 333-year history, had to wait 12 years for her first-ever promotion.
“For the first decade I felt very different from the rest of the people I worked with as a lone female among male co-workers. I did not feel as though I belonged and so took on male behaviours so that I did ‘belong’.”
She said overly narrow criteria for advancement, outdated leadership models, and bias in talent management all contribute to a lack of diversity: “For the first decade I felt very different from the rest of the people I worked with as a lone female among male co-workers. I did not feel as though I belonged and so took on male behaviours so that I did ‘belong’,” she says.
“It wasn’t until I took a break from my career and met some very inspirational women around the world that I decided I was going to stop trying to be something I wasn’t and was going to be me.”
Supportive employers can be game-changers. Beale, her confidence shot during a decade of being passed over, was sent by her boss on an ‘assertiveness for women’ course after she turned down her first ever promotion.
“I went back into work and said ‘yes’ to the job offer,” she explains.
Working for an employer who was very proactive in talent management and who was keen to promote women meant Beale was supported and encouraged at a key time during her 30s and early 40s.
“Doors opened for me and I had the courage to walk through them, sometimes into the scariest opportunity,” she continues. “Continuously being stretched with each assignment, I learned a lot and began to enjoy being a leader and managing people.”
The change was pivotal for Beale. As well as being Lloyds’ first female CEO she was the three century-old financial institution’s first openly gay leader. She finally felt able to be open at work about her sexuality.
“When I had my first same-sex relationship, I didn’t have the courage to be out at work and stayed in the closet,” she says. “Many years later I chose to stop lying and came out as a lesbian and realised how a weight had been lifted from my shoulders and I could be more productive at work.”
In fund management, Morrissey wants diversity and inclusion to be “treated just like any other business issue, featured on every strategy day agenda, in every performance review, every hiring, promotion and reward decision, every risk and culture assessment”.
Damning research by recruitment firm Robert Walters revealed the financial sector has the biggest bonus gap. It found that, for every £1 of bonus money paid to men working in finance, their female colleagues take home just 65p.
The good news is that over past few years Morrissey has seen a “step change” in the level of commitment at the top and “a new sense of urgency around the issue”.
“I have seen a real willingness to collaborate,” she observes, “along with the recognition that the current relative lack of diversity is a business and client issue, linked to culture and the long-term success of the investment industry.”
Some women in fund management have found the solution is to bypass the bias altogether by starting their own company. Petronella West co-founded wealth manager Investment Quorum in October 2000. Following a management buy-out in August 2018, she took on the CEO role from her previous business partner.
“It is tough to combine motherhood, marriage and being an entrepreneur,” she says. “You need a lot of energy, thick skin, to be brave and be prepared to make sacrifices.”
Both Beale and West said female role models and mentors early on in their career would have been a massive help. “I wish I had started coaching training earlier and picked a good mentor,” West adds. “That is what I would say to other women trying to break into the boardroom; get a good mentor, speak up, learn to articulate yourself properly, and prepare well.”
Tackling the seniority gap is not just “the right thing to do”, she added. It also benefits the organisation, its employees, its customers and investors.
“If we want to attract the best and the brightest and to future proof our industry,” Morrissey says, “it really is time to get serious.”
Women in Investment Festival
The Women in Investment Festival, in partnership with sister publications Investment Week, Professional Pensions, Investment Europe and Retirment Planner, is a one-day festival that seeks to serve as a beacon for the benefits of a truly diverse industry for all, whatever gender, colour or creed. Although it will naturally talk to and celebrate the achievements of women, we also believe we should showcase the role men play in the equation, and highlight examples of best practice where their support is helping to drive change for true gender equality.
It takes place on Tuesday 3 March 2020 at the Brewery in London and we are currently running a discounted super early bird ticket price. Head over to the website here for more details.
This article originally appeared on Professional Adviser on 26 November 2019.