The UK government’s recently published Sexism in the City report revealed the shocking and wide-ranging extent of challenges women still face in financial services. The conclusions of the report are unacceptable in 2024 — or any year — but are sadly unsurprising. For too long organisations have overlooked meaningful action to address cultural issues that determine the levels of gender parity in business leadership positions and have failed to provide where women might benefit from alternative support structures to achieve their career potential.
The glaring irony, of course, is that women make up half of the workforce and research from London Business School, SQW and the Financial Reporting Council has shown that firms embracing diversity in the boardroom see increased profits. Despite making strides in recent years, women remain a powerful, untapped source of business potential, and the financial services sector should be working to embrace the business potential of their female executives.
The backdrop
Actions speak louder than words, and unfortunately women have been sent a resounding message that they are expendable. The Women Count report by the organisation I chair, The Pipeline, recently revealed only 9 per cent of companies in the FTSE350 have a female CEO, likely driven by talent pipelines where women only make up one in five of commercial roles on executive committees at the UK’s largest companies. These positions with financial responsibilities often pave the way to top jobs, such as CEO. Where women do make it into the C-suite, a practice of hiring female CEOs to untenable positions, where they will inevitably be forced out, is a recognised pattern.
Furthermore, our research shows banks in the FTSE350 have only 32 per cent female representation on executive committees. Combined with the testimonies heard by the committee for the Sexism in the City report, it’s clear the financial sector urgently needs to rethink the pathway for women’s career success.
The means to achieve gender parity
To tackle the scale of gender inequality in the boardroom, banks — and any other company — must recognise the barriers women face in the workplace as a cultural problem. For too long, slow change has been accepted and diversity has been turned into a performative corporate exercise rather than a route to business growth.
Promotion procedures should be fair and based on merit, and firms should make sure they are cognisant of the additional barriers women can face when it comes to promotion. The “woman tax”, for example, sees women given additional responsibilities (often related to human resources activities) that take them away from their primary role during working hours.
As highlighted by the Sexism in the City report, a lack of transparency about salary can increase the gender pay gap. Increased transparency, as recommended by the report, would offer women a clear benchmark against which to measure their pay in comparison to the expected salary for their level.
Investing in tailored skills development programmes can also be a key tool to develop the proportion of senior female talent in finance. This is part and parcel of a wider shift in business culture that must see efforts to eliminate the toxic workplace practices detailed by the UK government. Without a supportive environment where women are valued on their own merits and provided with the adequate career support to shape success in their own image, there will never be genuine progress and female board members will continue to be few and far between.
Furthermore, the Sexism in the City report highlights the exodus of mothers from the financial services sector after giving birth. While recommendations for transparency around parental leave and flexible working policies would be part of the solution, firms must also take action to tackle the gender health gap as a whole, and ensure they provide comprehensive support for women's health issues.
Developing a strong pipeline of female executive talent will be foundational to the growth of the finance sector. Achieving this, however, will require firms to address the pervasive culture of sexism that has facilitated the woeful absence of women on its executive boards to date. The good news is that a holistic web of policies and support that enables female talent to achieve its potential is within reach of all organisations, and banks should heed the warning that if they don’t act now, it will ultimately be their business that loses out.
Geeta Nargund is the chair of non-profit The Pipeline and a women’s health academic at the University of Bolton in the UK and Hasselt University in Belgium
