What is it?
On 22 March 2016, Jayne-Anne Gadhia, (CEO of Virgin Money), published her review into the representation of women in senior managerial positions in financial services,”Empowering Productivity: harnessing the talents of women in financial services“. Nearly 3,500 people – men and women – contributed to the Report through a variety of channels. The Report and its recommendations focus on fairness, equality and inclusion for men and women in the financial services sector.
In response to the Gadhia report, HM Treasury has launched the ‘Women in Finance’ Charter asking financial services firms to commit to key industry actions.
How will it work?
The Women in Finance Charter asks financial services firms to commit to implement four key industry pledges:
- Appoint a senior executive responsible for gender, diversity and inclusion
- Set internal targets for gender diversity in senior management
- Publish progress against these targets annually on their website
- Aim to link the pay of senior executives to delivery against these targets.
Why is it important?
Analysis of data prior to the review highlighted that female advancement from middle to senior levels of management is worse in financial services than in any other industry in the UK. Indeed, more women than men start out in Financial Services but, as they progress, the majority fall out, particularly at middle management level. Whilst measurable improvements have been made in the diversity of Boards, statistics show that unfortunately this has not been reflected in senior and middle management positions. New Financial’s sample of 200 firms active in UK Financial Services showed an average of 23% female representation on Boards, but only 14% on Executive Committees and only 50% of women, compared to 70% of men believe they have an equal opportunity to advance in the financial services sector regardless of their personal characteristics or circumstances.
How has the Charter been received?
The government strongly believes the recommendations of the Gadhia report will be key to driving change in the senior levels of the male-dominated financial services industry and there can be no doubt that achieving a balanced workforce at all levels in Financial Services will improve culture, productivity and profitability.
Virgin Money committed to sign the Charter on the first day, together with Lloyds Banking Group, Barclays, HSBC, Royal Bank of Scotland, Columbia Threadneedle and Capital Credit Union. It’s very positive to see so many of our key financial services providers get on-board, however, the success of the Charter may be difficult to assess as it remains unclear what the timeframe for conformity is.
Financial Services providers willing to sign up to the Charter will also face many challenges and may be required to make fundamental changes to their internal practices in trying to comply with the recommendations. Changes will have to be considered and potentially made to data gathering practices, recruitment, flexible working, unconscious bias training, bonus measures and promotion schemes.
The Treasury will publish a list of firms who have signed up to the Charter after three months and firms can sign the Charter and formally commit to implement these recommendations by visiting: www.womeninfinance.org.uk and completing the online form.
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