Financial services still run by old boys, as women step out to care
Gender disparity within the business world remains a seemingly intractable problem, with slow progress towards parity at the top. A new report considers the state of affairs regarding the number of women, and their roles, in the executive committees of financial services industry players, as well as the roadblocks holding women back from reaching the top.
The global corporate workplace is slowly becoming more diverse, as businesses react to a range of studies that show that diversity is good, not merely for social responsibility ends, but also for business. In dealing with diversity, gender is one of the major focus areas in business. A range of reports show that bringing gender into balance in business brings along benefits – one study highlights the potential to add $655 billion to corporates in the US, UK, and India, with a broader macro study finding that gender parity in the workforce could add up to $12 trillion globally.
Opening up business to women, particularly for decision making functions, benefits companies through providing wider access to the full talent pool, better decision making by bringing together different perspectives and improved service to customers by better representing them, among others. The move also has knock-on effects, such as more female participation in the workforce.
Financial Services
The road to gender equality remains a long one, however, as a range of sectors struggle to make headway towards parity. In a new report, titled ‘Women in Financial Services’, Oliver Wyman explores how far the financial services industry has made traction towards improving female representation within the boardroom and management tiers. The report involves an analysis of female representation on the Boards and Executive Committees of 381 financial services organisations in 30+ countries, as well as a survey of 850 financial services professionals globally.
Women representation at executive committee level
The research highlights that, over the past decade, not a great deal of progress has been made regarding the total number of women on executive committees at financial service firms, although progress in the presence of female executive committees at a firm has improved somewhat. In 2003, for instance, 41% of companies had no women representation on executive committees, 8% had more than 30%, while the average stood at 11%. Today the number of females on executive committees has increased to an average of 16%, with only 25% of financial services firms not incorporating women at all and, at the other end of the spectrum, 19% incorporating a female share of more than 30%.
Ted Moynihan, Managing Partner of Financial Services at Oliver Wyman, reflects “The low representation of women on Executive Committees in particular is a problem. An organisation’s key business and strategic decisions are made by its Executive Committee and they are also highly visible, both internally and externally, making them effective as role models and sponsors – and driving business success.”
The research also found that, even when women are incorporated into executive committees, their representation is tied in particular (above the average) to two segments of executive officer roles, Head of HR and Head of Marketing (45% female representation) and Legal, Audit and Control (30% female representation). Women are far less likely to be incorporated into the committees from core business and strategy executive roles – of those in the CEO chair, only 8% are female, while of those that are Head of Operations and Head of IT, 12% are female. This suggests that, many of the most crucial business roles in terms of strategic and line relevance, remain in the hands of men, with only minor moves, within margins of error, upwards.
The results from Oliver Wyman's study are in line with a wider CEO study by Strategy&, which found that globally women hold less than 5% of CEO positions at the world's 2,500 largest companies, with financial services holding a mid-table share of 3.3%.
Ups and downs
The report highlights that the problem related to low levels of representation at the executive level are partly related to geographical location. Relatively progressive regions socially and economically, such as the Nordics, Norway (33%) and Sweden (30%), have relatively higher levels of representation than more conservative regions, such as Japan (2%), Switzerland (5%) and Germany (10%). The UK manages a middle of the road level of representation, at 17%, which is just above the 16% average.
The research also considers the progress made in different societies on improving the number of women on executive committees in the various countries examined. Some of the top performers, Norway, Sweden and Thailand (31%), are said to have hit a ceiling in terms of further growth. Particularly Asian countries find themselves stuck in the mud, as it were, where there is little movement from already low levels of representation – these include China (8%), South Korea (4%) and Japan, although a number of Western European countries too make the grouping, including Germany, Switzerland, Spain (10%) and France (14%). The countries with the highest growth rates of representation include Singapore (25%), up almost 12 points on 2013, Italy (16%), up 8 points, the UAE (15%), also up 8 points, and Poland (24%), up 4 points.
Career barriers
The financial services industry professionals still prefers to have females service their support needs, with the vast majority (71%) women. When it comes to professional entry level positions, within the financial services, they remain relatively open to women at 48% vs 52%. The number of promotions to managerial level is 2% lower for women than men – however, women are also slightly (1%) more likely to exit at this level.
The real road block appears at the move from managerial level, where 40% are female, to senior manager, where 28% are female. The number of women promoted is 3% behind that of men, while the number of women exiting at this level is 3% higher than men. Moving from senior management into the executive presents another barrier, with the representation for women falling to 21%, predominantly on the back of women exiting at senior level over being promoted.
The disconnect
Interestingly, the research finds that women and men are almost equally as ambitious to reach a senior level within their respective organisations. 78% of women and 79% between 18-25, answer that they agree or strongly agree with the question ‘I want to reach a senior position in my organisation’. In the 26-30 group, the number of ambitious women is above that of men, at 69% and 65% respectively. The next two age categories, up to 40, continue a similar trend of close scores between 60-70% for both groups. Only in the 41-45 age group do the number of ambitious women drop significantly below that of men, at 43% and 65% respectively.
Women also tend to be equally open to making sacrifices in their private lives to accommodate their ambitions, up to the age of thirty, with around 50% of both gender types. Between 30 and 45 the number of women interested in making sacrifices falls to around 40%, while for men it remains close to 50%.
While women are said to remain relatively ambitious throughout their career to reach the top, consistently above 40%, considerable roadblocks appear to inhibit their pathways there, or lead them to become HR, marketing or compliance executives only. Given that in the financial services industry the point at which women opt out, is also the period in which they are the least likely to want to sacrifice private life over career, a disconnect between employers and employees seems to find the employees choose life over work.
Astrid Jaekel, Partner and author of the report, posits a possible solution: “Diversity must be seen as a commercial imperative rather than just as part of corporate social responsibility or fairness in the workplace. Gender balance provides access to the full talent pool, better decision making by bringing together different perspectives, better services to customers by better representing them, and a stronger economy. Organisations need to advance women by offering bolder structural solutions to the mid-career conflict outlined in this report, creating the right working arrangements and fostering more profound cultural change.”
