Across the financial services sector in 2015, on average 14% of executive committee members were women. For board level positions the figure was 23%, however this masks the representation of women holding Executive directorships which was just 7%. The Women in Finance Charter was formally launched by HM Treasury in March 2016 to address this imbalance in the representation of women at senior levels as highlighted in Virgin Money’s Empowering Productivity report. Many high profile finance firms have already signed up and the vast majority of regulated firms are expected to join in the coming months.

Summary of Charter’s pledges

As signing up to the charter is voluntary, and recognising the variety of organisations that make up the sector, the actual targets for the achievement of gender diversity are for individual organisations to decide. However, within the first three months from the date at which organisations sign up, they must publish their targets on a dedicated page on the company website (a link to which will be displayed on HM Treasury’s website) and then achieve these targets within twelve months from the date they are published. Organisations can choose to set their targets annually or over a longer period (up to three years), but any longer would need to be agreed with HM Treasury. HM Treasury will also conduct sample audits from June 2017 to monitor compliance. See the full guidance notes here.

What does this mean for the financial services sector?

It all comes back to the quality and availability of data. In order to fully understand their current position, organisations will need to be able to report on gender diversity within each grade, function and business unit. While signing up to the Charter is voluntary (for the moment), organisations should view it, along with gender pay reporting, as an integral part of their approach to ensuring equal pay and gender diversity.

Additionally, the Charter requires that organisations publish details of an executive bonus scheme that is linked to the achievement of gender diversity targets. It is for the organisation to decide which employees are in scope and the metrics and design of the bonus. Existing bonus schemes will need to be examined and options explored to build in a target based on gender diversity.

How are organisations responding?

Even though signing up to the charter voluntary, its profile is likely to be as prominent as gender pay reporting. Many well-known organisations have started to publish narratives and intentions with regards to targets and policy changes. Here are a few examples:

Lloyds Bank - “…pledge 40% of its top 5,000 roles will be occupied by women within 6 years.”

PwC - “…we have a strong gender profile and believe that a diverse workforce makes us a better regulator and a great place to work.”

RBS - “One in three top management roles to be filled by women by 2020.”

HSBC has also reported that they intend to have an equal number of men and women on shortlists when filling vacancies and introduce ‘name-blind’ CVs and at Barclays Bank if a female candidate is not hired, a business case is required to show why the candidate wasn’t suitable.

With so many regulated organisations embracing the Charter and gender pay reporting, the pressure will be on those that don’t. With the competition for talent so fierce, all regulated organisations will need to embrace these opportunities and build a strong story around their position on gender diversity.

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