Despite substantial diversity efforts in the financial services industry, the top of the sector remains a male dominated world, reveals a research by Oliver Wyman. In 2013, only 4% of CEOs and 13% of ExCo members were female, while as many as 35% of all ExCos were exclusively staffed by male members. In the case women do have an ExCo position, the typically head support and compliance departments, such as HR or Marketing, roles that do not necessarily lead to a CEO role.
Management consulting firm Oliver Wyman recently released an inaugural report on women in the Financial Services industry. For the report, the firm analysed the gender mix of senior staff at over 150 financial services firms internationally (including investment banks, retail banks, insurance companies and money managers), interviewed over 60 senior women (and some men) and surveyed over 1,000 current and potential financial services employees from five countries.
The key conclusion: although the financial services industry has made an overall modest improvement when it comes to gender balance, female representation at CEO level and in Executive Committee (ExCo) remains low; only 4% of CEOs and 13% of ExCo members were women at the world’s leading financial institutions in 2013. Of the ExCos surveyed, 35% is still entirely male, a number that did come down from almost half (49%) in 2009. A mere 11% of the ExCos has a women representation of 30% or more.
The news is not all gloomy though - on a positive note Oliver Wyman concludes that female representation on boards has increased by two thirds over the last 10 years as 20% of board members are now women, and almost a quarter (23%) of the boards has 30% or more of its members from the female gender.
In addition to comparing the representation of females on boards, the consultancy also looked at performance across countries. Interestingly, despite growing attention for diversity and gender equality, the percentage of female ExCo members has decreased in several countries in the past five years. Nordic countries, such as Norway, Sweden, and Finland, Canada and the UK can be labelled role models as the percentage of women in ExCos in these countries has increased in the past 10 years, although large differences in percentages between the countries, such as Norway and the UK, can be seen. Singapore is placed on the other side of the spectrum, as its percentage of women in ExCo roles has decreased structurally in the same period.
The women that did succeed in obtaining an ExCo role at financial institutions, most likely landed the support and compliance functions, such as Head of HR, where as much as 59% are women, Head of Marketing (43%), Head of Audit (36%), or Head of Legal (33%). The number of women leading profit generating lines of business is still very low, with only 11% of Head or CEO of a Business Unit (BU) being female, as well as the number of female CROs (4%), CFOs (8%), and COOs (11%), roles that generally provide a career path to becoming CEO.
More focus on top-level diversity needed
Going forward, the consultants conclude that much needs to be done as “the lack of diversity – both gender and otherwise – in the industry is bad for business.” Michelle Daisley, Partner at Oliver Wyman explains: “Diversity improves decision-making, performance, sustainability, service and profits in the long-run. Firms with less diverse management teams are less able to see issues from many angles. This is especially important for a sector that has recently suffered scandals attributed to unchallenged leadership and ‘groupthink’. The pace of change is too slow.”