Campaigners hail a ‘turning point’ for gender equality – but warn that reward challenges lie ahead
More than 70 leading financial services firms have pledged to set firm targets for helping women into senior positions – and will link executive pay to achieving these goals.
A raft of big names including insurance giant Aviva, Barclays and professional services consultancy PwC have signed the Treasury-led Women in Finance Charter.
It commits them to setting gender diversity targets for senior management and reporting annually on progress towards meeting them. It also means “having an intention to ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity”.
Areview of the representation of women in the UK financial services sector – commissioned by the Bank of England and led by Virgin Money chief executive Jayne-Anne Gadhia – found that despite relative progress on board appointments, only 14 per cent of executive committee members were women.
Co-author Emily Cox said the review recommended that firms be left to set their own targets, to reflect the huge range of geographical and operational differences between them.
The72 firms that have signed up to the charter employ more than half a million people. The targets they set will be publically available by September, with progress measured from autumn 2017.
Virgin Money has set a target to have equal numbers of men and women at all levels of the business by 2020, although it is allowing itself a “tolerance level”, with an absolute minimum of 40 per cent women.
Gadhia said: “I am convinced that the large number, as well as the diversity, of firms who have signed the charter marks a significant turning point in the battle for a more balanced and fair industry.
“It demonstrates that a growing number of chief executives and boards within the sector are taking the issue seriously and recognise the strong link between greater gender balance and improved productivity and performance.”
But Jon Terry, UK financial services people leader at PwC, warned that signing the charter was “only the first step”.
“Linking targets to pay is particularly challenging as gender targets are, by their nature, likely to be long term, while the majority of pay decisions are made annually,” he said. “Firms will need to find a robust and transparent way of aligning these two timescales.
“The targets will only be achieved if diversity is central to all aspects of a business – including recruitment, pay, talent identification and access to training and opportunities. Without this wider focus, it will be challenging to deliver sustainable change in this area.”
Economic secretary to the Treasury Harriett Baldwin insisted that the commitment to the charter would make “a genuine difference”.
“This is just one part of the government’s broader ambition to tackle gender inequality in the workplace and ensure that women everywhere are able to fulfil their potential,” she said.
Areport from the Cranfield School of Management recently found that just one in four FTSE 100 board appointments in the six months to March 2016 was a woman.
And the focus on gender equality at work is only likely to intensify in the run-up to mandatory gender pay reporting. From 2018, companies with more than 250 employees will be required to produce pay gap figures, but only 54 per cent of them are currently analysing the gap, according to a recent survey.