The financial services industry is finally making progress on gender balance in the workforce. Mindsets are shifting and, as a result of hard work and commitment, progress is beginning to be reflected in the numbers.
But 20% representation of women on executive committees and 23% on boards is not enough. There is still a long way to go to create an industry in which women have equal access to opportunity and positive outcomes, according to a new Oliver Wyman report, Women in financial services 2020.
Let's start with the good news
The industry is making the fastest progress on increasing the number of women in senior leadership roles since the start of our index in 2003. We have reached 20% of women on executive committees and 23% on boards. There are a growing number of outperformers compared to this average: 26% of firms have more than 30% women at executive committee level, with this number rising to 37% for boards.
Many executives in the industry have felt the shift in dialogue on gender in recent years. It is no longer box-ticking; gender diversity is now recognised as a strategic issue that impacts business outcomes. We are seeing more creativity and commitment in attracting, recruiting, and retaining women, with senior leadership starting to be held to account by linking results to remuneration.
The bad news
When you dig into the numbers, it becomes clear that there is still a lot of work to do. The industry cannot afford to become complacent.
Most roles occupied by women on executive committees continue to be within corporate functions. There has been some improvement in the representation of women leading revenue-generating businesses – those most likely to provide the next generation of CEOs. But we are not seeing this change translate into the most senior position. Only 6% of CEOs are women. Some still view placing a woman in this role as a riskier option, with higher scrutiny and expectations.
The story for boards is no different, with only 9% of chair roles held by women. Certain sectors within financial services continue to lag. Banks and insurance firms have failed to reach 20% executive committee representation. Despite starting with a blank slate, fintech has emerged as an outlier, struggling with gender balance at the board level.
The geographic gap is not closing. Countries that were leading in 2016 have continued to progress faster than average, while on the whole the bottom quartile is stalling. Part of the gap can be attributed to different cultural norms across geographies, but a country's economic health also plays a part.
Is 30% really going to be a tipping point?
A representation of 30% is widely thought to be the point at which any minority group reaches critical mass and becomes influential. Research has shown that this is the tipping point to start shifting culture and inclusion.
However, the 30% target has become so ingrained in the industry’s lexicon that it risks being interpreted as the point at which gender diversity will “fix” itself through natural momentum and achieve a balance.
Oliver Wyman's report cites that this is not the case. Firms with more than 30% representation on executive committees in 2016 have not had better or worse progression in gender balance than other firms – in fact, many have moved backward. As the industry starts to creep towards this target, we need to make sure the goals are redefined and that momentum is not lost.