Last week HM Treasury published the list of financial services companies that have signed up to the Women in Finance Charter. By signing, companies have pledged to promote gender diversity. They will do so by nominating an accountable executive, setting internal targets, publishing progress against these targets and having the intention of aligning executive pay to the internal diversity targets. The latter could well be a game-changer for this problem.
These are ambitious steps and it is encouraging to see the financial services industry – who struggle with achieving gender balance at the top – to be taking strides toward a solution.
The financial institutions who have signed up to the Charter are largely those you would expect – all big names are represented. Alongside them, the FCA has also stepped up to the challenge. This should be commended and complimented.
Only on second glance does one notice the ‘missing’ names. Where are some of the large investment banks? Wealth management houses or fund and hedge fund managers? Where are some of the challenger banks and the banks attached to some of the large UK retailers?
The last category was particularly surprising, given the recent public profile of women in retail, which saw a number of senior executives across the retail industry champion the debate. The report we recently released in partnership with Women in Retail and Retail Week’s Be Inspired campaign both highlight very similar issues in the retail industry, mirroring key themes like the positive contribution of women in leadership to a company’s financial performance, and how they rarely reach these positions because of high drop-off rates at mid-management levels.
Because of these similarities, we wondered what was at the heart of the retailer banks’ decision not to sign up. Could one be so blunt as to suggest that it’s not on the agenda? Or that there is a lack of understanding around the moral and commercial arguments of promoting women? Or are they shying away from the potential scrutiny of the public eye?
Naturally, there is no single ‘silver bullet’ to solve the problem, both the Women in Finance and Women in Retail reports agree. Nonetheless, the two reports show that there is recognition of the problem and a real appetite for change from senior leaders. Could the two industries work together and support one another in tackling the problem? Perhaps by finding a creative solution for how to best track and measure diversity? The organisations that operate both in financial services and retail have the luxury of a broader talent pool and a wider knowledge base across the organisation; an advantage for collaboration and sharing internally that they should use to advance the diversity agenda.
Some ways to leverage this ‘dual-status’ might be to draw on the organisation’s wide expertise, and role models from both areas of the business. Highlighting best practice across the organisations and breaking down silos to allow talented, emerging women leaders to progress across both the retail and financial services parts of the business might be a first and slightly different way of tackling the diversity challenge. Furthermore, these companies have the luxury of economies of scale and testing out an initiative in one area can lead to spill-over effects in another…
We would encourage both the financial services and retail industry to see the Charter as a call to action and, in our view, a model for industries to adopt and build on. Having seen real appetite for change and action across the leaders in the retail industry during the interviews we conducted for our report, we encourage retail executive and board teams – especially those with banking arms – to use the HM Treasury Charter for women in finance as a stepping stone to their own, industry specific charter. It’s time for a commitment to positive change.