The financial industry still struggles with gender diversity, as women barely hold positions in the highest salaried roles, despite recent progress.
ESG Book, a sustainability data and technology company, has identified a worrying lack of female representation at the highest salaried positions in business. Women in finance are barely represented among the highest paid roles. Only 13 per cent of finance firms include a woman in top three highest earners.
Its analysis covered more than 3,900 companies across the G7, and revealed that fewer than one per cent of the G7’s biggest listed companies (not just financial ones) can count women as their top three earners. This means that less than one in five (17.9 per cent) of the companies can count at least one woman among their top three earners, and just 2.3 per cent have two women among their three highest paying roles.
In addition to the lack of female representation, ESG Book’s analysis also revealed that only 29 per cent of G7 companies have an equal opportunity and diversity policy, and just 14 per cent of companies have specific diversity targets.
Of the companies that do have targets, 12 per cent of these do not have plans backed by key performance indicators (KPIs), indicating no ability to track progress. The US is the worst performing country on these measures, with only eight per cent of companies having diversity targets.
Diversity boosts performance
Studies consistently link corporate diversity with higher financial performance, and companies that have more women on their boards tend to be more successful in meeting global climate goals. The most diverse 20 per cent of the world’s 1,000 biggest companies are more aligned with limiting global warming to 1.5C above the pre-industrial average by 2050.
ESG Book’s head of US ESG solutions, Maria Mähl, commented on the data saying: “The link between gender diversity and improved financial and climate performance is now irrefutable.
“We now need detailed information on companies’ gender diversity to be as abundant and accessible as companies’ financial information. This way, gender diversity will function as a market signal that influences investor calculations on profit and risk.”
Despite recent progress on boardroom diversity, ESG Book’s analysis shows that boardroom diversity falls when expanding the pool of companies analysed. Across the G7, the average percentage of females in boardrooms is 25 per cent. Japan is the worst performing country, where the percentage falls to 11 per cent, and only five per cent of Japanese companies have policies to promote boardroom diversity. France is the best performing country by this measure, with 44 per cent of boardroom roles taken by women.
Decline of women in finance
ESG Book’s analysis follows a recent report from the Centre of Economic and Business Research on behalf of the London Stock Exchange. This showed women in the UK’s finance sector have continued to earn less than men over the past five years.
It also revealed that there were nearly 200,000 more women working in the UK’s finance sector in 1997 than there are today. Yet women working in financial services could unlock up to £147billion of value for the UK economy by 2035 if wages increase and the gender pay gap shrinks.
The Exchange warns that in 50 years, the sector has not “fully redressed the structural inequity and imbalances that characterised the experience of women”.
Network for women
This week Apex Group, a global financial services provider, unveiled The Women’s Accelerator Network, a grassroots private membership community that connects women across age groups, roles and professions within the financial services industry.
Through idea exchange, partnership, learning, mentoring as well as community, The Women’s Accelerator Network will bring together generations of women to instigate a movement for change.
It follows the launch last year of its Apex Group Women’s Accelerator Program, an internal development initiative designed to drive equity for female progression and diversity at all levels within the Group. The programme aims to accelerate the progress of high-performing female talent through the business, mending the ‘broken rungs’ on the career ladder, eroding the gender disparity at mid- and senior-management levels to provide a clear path for career progression.
Rosie Guest, chief marketing and communications officer at Apex Group, said: “Just as the internal program was about addressing broken rungs in career progression for women, the external network aims to break down barriers in the same way.
“There are several women’s membership communities across the industry, but there still always remain immediate barriers – either financial or based on seniority, or both.
“Anyone can apply to the network and membership is free – the first cohort will be selected based on ensuring a diverse range of women, across age, ethnicity and specialism to facilitate an environment of mentoring, reverse mentoring, and supporting change makers via a grassroots community that intends to have a lasting impact on the shape of the industry.”
