Women in Banking and Finance, a UK-based non-profit dedicated to increasing women’s visibility, participation and engagement in financial services, and the London School of Economics and Political Science have published a report that identifies 10 areas where financial companies can take action to tackle the headwinds on female progression.
The report, Good Finance Framework: Creating Inclusive Organisations in Financial and Professional Services, forms part of WIBF’s Accelerating Change Together (ACT) Research Programme, which is sponsored by several FIA members including Goldman Sachs, Barclays, Citi, HSBC and Morgan Stanley, as well as the Financial Conduct Authority.
The report, which covers businesses in banking, asset management, fintech and insurance, highlights the problems many women still face in their careers, even as boardroom data suggests an increase in the numbers of female non-executives.
For instance, women interviewed in the study spoke about facing different norms compared to men, with several saying that their high performance was more regularly discounted compared to men. Others pointed out that they were treated differently when making mistakes.
The majority of those interviewed agreed that women were either labelled competent or incompetent in their ability. However, there was a much bigger distribution of perceived ability among their male colleagues, with ‘mediocre’ men being mentioned explicitly by 22 women, the report says.
Mediocre men were more likely to stay in the sector than women because they fit the social norm of what a worker in financial and professional services looks like, according to the report. By contrast, women – and particularly Black women – have to outperform to progress.
The women interviewed attributed this to a number of factors, including men being part of a “social club where other members are gatekeepers with power”.
The study used qualitative research based on interviews with 44 women and roundtable discussions with another 35 women carried out by the London School of Economics, alongside more than 1,700 responses to a quantitative survey conducted by The Wisdom Council. All women work in financial and professional services.
Of the 44 women interviewed, 11 were Black. The report says that Black women were "strategically over-sampled given they are the group whose progression in the sector is notably slow and cannot be explained away.”
"What was striking about the conversations was that the headwinds and tailwinds they [Black women] faced were not different to the remaining 33 women. Rather the headwinds were more intense and the tailwinds fewer," the report says.
According to Grace Lordan, the lead researcher for the report and director of The Inclusion Initiative at the London School of Economics, gender convergence will only happen when financial services have managers across all levels of seniority who embrace an inclusive leadership style that ensures the voices of all talent are heard.
"Until this point, we are stuck in a compliance phase where we need to continue monitoring and auditing the progress of women in the sector to ensure progress actually happens," Lordan said.
The report identifies 10 areas where companies can take action to help improve the culture around advancement prospects. These include audits of the allocation of “stretch” assignments, pay increases and promotions, encouraging flexible work styles, and redesigning incentives to reward inclusive managers so that their bonuses are at least partially determined by the performance of their team members.
"The Good Finance Framework report will help organisations to better understand the challenges faced by rising talent, and how, through the actionable recommendations, to support and grow the talent pipeline. Together, we can make the difference for all," said Vivienne Artz, a WIBF advisory board member and chief privacy officer at the London Stock Exchange Group.
WIBF’s ACT Research Programme
The four-year Accelerating Change Together (ACT) Research Programme established by WIBF in 2020 and conducted by The London School of Economics and The Wisdom Council will be carried out in four distinct phases.
Each phase will centre on gender issues that are prevalent for organisations, exploring how these issues arise, the underpinning reasons for their persistence, what actions can be taken to mitigate these issues, and how success is measured.
Year one of the ACT Research Programme explores the barriers and opportunities for women in their careers, through primary research and quantitative and qualitative insights, culminating in the Good Finance Framework report of practical, actionable recommendations and interventions.
Participating firms can then apply these findings in their workplace and measure the successes of the best practice policies under the guidance of researchers and academics and supported by a cross functional group of senior business leaders and Diversity & Inclusion practitioners.
The ACT programme is sponsored by: Aegon, Baillie Gifford, Barclays, Blackrock, Citi, EY, Goldman Sachs, HSBC, Lombard Odier Investment Managers, London Stock Exchange Group, Moody’s, Morgan Stanley, Santander, Schroders Personal Wealth, TD Securities and The Cumberland.