This year’s International Women's Day on 8th March once again shone the spotlight on the position of women in business – much to the dismay of not only many women but also men. After all, you’d have hoped that by 2020 things would have been on more of an even footing as to make such conversations obsolete. Alas, that isn’t the case, as evidenced by the fact that the UK is currently ranked 21st in the Global Gender Gap Index, which serves as a compass to track progress on relative gaps between women and men on health, education, economy and politics. The UK’s standing, therefore, suggests it is some way behind many other Western countries in terms of gender equality. However, shockingly, the United States ranks 53rd.
Further evidence of gender inequality can be seen in the workplace. While in most countries women make up half of the workforce within the financial sphere, the picture at the top is very different. In 2018, women held just 12% of CFO roles globally. The financial services industry in the US has a 24% gap between the rates of first promotions (from entry-level to manager) of women and men. Meanwhile, a UK government report, across 200 financial services firms shows that there was a 23% female representation on boards, but only 14% on executive committees.
Despite this, the perception is that progress is being made, with research finding that 61% of people believe there is more workplace gender equality compared with five years ago. To move the needle further, we are now at a point where the conversation around equality must look beyond the debate surrounding male-female balance. Arguably, the starting point should not be gender difference but diversity. And that is much more than just men versus women. This was reflected in this year’s International Women’s Day theme – #EachforEqual.
Whether in the political arena or in business, the number of men in certain positions compared with women is a subject under constant examination. However, this state of affairs focuses on too narrow a discussion and the so-called gender debate should give way to a greater debate on diversity.
According to Randstad, fewer than one in 10 management jobs in the UK are currently held by members of the black, Asian and minority ethnic (BAME) community. This indicates that it’s not only women who have struggled to make it into leadership roles. Within financial services, increasing diversity to employ a true cross-section of society at every level would offer a variety of benefits. For instance, an organisation employing people from different cultures with different backgrounds is far better able to innovate than a company that just has a good balance of male and female employees. Of course, gender balance is part of diversity, but the real difference is made by people who can introduce different ways of thinking.
For this to take effect, however, changes need to be made in the recruitment process. Research suggests that people, consciously or unconsciously, still hire employees who resemble them. Yet, for a much-needed broader view, it is important that organisations don’t automatically employ people with whom they can identify. We have seen big players take this into consideration with Lloyds Banking Group being the first FTSE 100 firm to set an ethnic diversity target of 8% by 2020 back in February 2018. And in 2017 the Financial Conduct Authority (FCA) also set an ethnicity target of 8% of senior roles to identify as BAME by 2020. While we have yet to find out if they have been successful, it suggests change is coming, although there is much work left to be done
Increasing diversity within the financial sector would have wide-reaching benefits, not only for those individuals who have previously been overlooked due to gender, race, religion or sexual orientation, and the organisations that hire them, but also to society in general. One example of this is the fact that the UK economy would be £24bn bigger if those from BAME backgrounds progressed in their careers at the same pace as their white colleagues.
Discontinuing the norm
Ultimately, while having women at every level of an organisation is of great importance, it’s high time organisations put in the work to ensure their people are a true representation of today’s society. The more diverse an employee base, the more chance of innovation and success. And yes, having someone at the top of the company who represents a discontinuity from the norm would help to encourage diversity. The key is to break down any notion of bias at every level, reflect a true cross-section of society within an organisation and to continue to strive for inclusivity.
Treasurers can play their part here, putting in place diversity criteria when shortlisting candidates for roles and promoting a culture of equality within the department. These simple actions cost nothing but could deliver significant performance and wellbeing benefits for the entire treasury team.