Only a third of organisations that signed the Women in Finance Charter met or exceeded their gender diversity targets in 2023 – although many firms have already exceeded their future targets.
The Women in Finance Charter was launched by HM Treasury in 2016 to encourage the financial services sector to reach gender balance in senior management. It now has more than 400 signatories, covering around 1.3 million employees.
The latest annual review, published by think-tank New Financial, finds that 36% have reached their targets, while a further 40% that have targets with future deadlines say they are on track to meet them.
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Progress has been slow, with gender diversity in management improving by only one percentage point per year on average since the charter was launched.
Female representation in senior management edged up from 34% in 2022 to 35% in 2023.
If this pace of change were to continue, gender balance among signatories would not be achieved until 2038.
UK banks and insurers have made more progress than investment managers, investment banks and global banks.
A total of 28 organisations including Nest, American Express, Virgin Money and NFU Mutual have already met their targets ahead of the deadlines they had set for 2024 or 2025. However, 32 missed their 2023 targets, although 27 were close.
The 32 that missed their target included JP Morgan, which wanted to achieve 30% female representation in leadership, Canada Life (35%), Ageas UK (40%) and Phoenix Group (40%).
Half of the 32 said they missed their target because of structural changes impacting their senior management population. Other common reasons were low turnover in senior management and hiring freezes.
Eighty-five per cent of signatories are capturing additional diversity data about their senior managers, up from 45% in 2020. Ethnicity, disability and sexual orientation are the most commonly collected data points.
Seventy per cent reported that linking gender diversity goals to pay had been effective, up from 49% in 2020.
The keys to success are starting early, being strategic, measuring impact, implementing robustly – and most importantly being consistent and persistent over the years to come.” – Yasmine Chinwala, New Financial
Yasmine Chinwala, partner at New Financial and co-author of the report, questioned whether the current rate of progress is fast enough.
“For the first time, this analysis zooms in on signatories that have improved faster over the past five years. The keys to success are starting early, being strategic, measuring impact, implementing robustly – and most importantly being consistent and persistent over the years to come,” she said.
“The UK, global and investment banking sectors have the biggest role to play in shifting the numbers for the whole industry, as do the largest employers. If these firms can set a sustainable course towards parity, the face of the entire industry will change.”
Amanda Blanc, group CEO at report sponsor Aviva and government women in finance champion, said: “There is a clear sense of progress and determination to achieve gender diversity in financial services. With over a third of signatories meeting their targets and a steady uptick in female representation, the level of ambition is growing.
“Whilst this progress is commendable, we need to move quicker: at the current pace, we won’t achieve gender parity until 2038. Let’s use the report’s insights as a catalyst for action.”
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The Women in Finance Charter review 2023 suggests 10 discussion points to stimulate action on improving gender diversity, including their capacity to monitor diversity data, embracing public conversation and being consistent by starting early and monitoring impact.
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