UK financial sector lags on boardroom parity

17 October 2022 3 min. read

Some countries in Europe are seeing financial services boardrooms approach senior-level gender parity. However, the UK’s reluctance to legislate on the matter means it lags behind leaders like France and Italy on the matter.

EY’s ‘Boardroom Monitor’ series charts the experience, training and skillsets of board directors in the MSCI European Financials Index, as well as at several additional large national institutions. The latest edition of the research saw EY teams canvas views from more than 300 institutional investors in financial companies across the UK, Germany, Switzerland, and France – and found a major shift in boardroom demographics is taking place.

Diversity within the boardroom has become an increasingly important issue for businesses globally, both in terms of the business case, in terms of compliance, and, increasingly, in terms of wider social trends towards inclusive practices – with female role models able to encourage other women to participate in the business world. And according to EY, financial services firms are making large strides toward gender parity in the boardroom as a result.

Boardroom gender split

Leading the way across Europe’s financial sector, wealth and asset management firms have the smallest gender gap in their board rooms. Around 41% of board members in the segment identify as women.

Banking an insurance lag behind, with just over one-third of board members in each segment identifying as women. That is more or less in line with the proportion of women in the boardrooms of FTSE 100 members – but ahead of the wider average.

Omar Ali, EMEIA Financial Services Managing Partner at EY, commented, “Shareholders of financial companies want to see boards with directors whose collective experience and characteristics reflect the capabilities needed to address the opportunities and challenges facing the sector. Boardrooms across Europe demonstrate a great depth of experience in many of the traditional areas which investors deem valuable. While they may be underrepresented in newer areas, such as sustainability and tech, and still have work to do on diversity, we can see action is being taken to address this.”

Gender split within leading European boardrooms

In terms of which countries lead the way, the UK’s financial services sector sits in the middle of the pack. Leading financial services boardrooms across Britain currently have a 39:61 split of women and men. While that is far and away better than Germany – where only 25% of boardroom executives identify as women – it is far behind the likes of Italy and France. This may well be because the UK remains resistant to implementing legislation on the matter – and with no incentive to comply with the Government’s gender targets, many businesses have simply ignored them.

For example, in France, the Copé Zimmermann law, voted on and implemented in January 2011, meant listed companies and non-listed companies with revenues or total of assets over €50 million, or employing at least 500 persons for three consecutive years, had to reach a minimum of 40% of women on their boards within a six-year period. In financial services, that has seen the number of women in board rooms hit 44%.

Similarly, in Italy in 2008, only 44% of listed companies had at least one woman on their board, while women held less than 6% of the board positions. In 2011, a law was passed envisaging mandatory quotas. The Law 120/2011 required gender quotas for the three board appointments subsequent to August 2012, by setting out a minimum objective of one-third of the corporate board seats for members of the under-represented gender. Now, Italy leads Europe on women in board positions – at 47%.