BrazilWomen now hold one fifth of executive roles in financial services
The financial services industry is continuing its small steps towards gender balance in senior management, according to a new Oliver Wyman report. The number of women in management roles has risen further, and more importantly, executive mindsets are shifting. However, there remains a huge gap to bridge before gender parity becomes a reality.
For its analysis, Oliver Wyman surveyed 9,000 (senior) leaders from financial services institutions in over 30 countries, and interviewed over 100 senior executives across the industry. The study found that since 2013, the number of women in the higher echelons of the workforce has increased by over 5%. Today, 23% of board and 20% of executive committee roles are filled by women.
More so, there are a growing number of outperformers in the industry: 26% of financial services institutions have more than 30% women at executive committee level, with this number rising to 37% for boards.
From a country perspective, Israel leads with 38% representation on executive committees, followed by Australia, Sweden, Finland, Thailand, Norway, Canada, and South Africa. Saudi Arabia has the lowest, with China, Japan, and South Korea also vying for the bottom. The notable gap between leaders and laggards can according to the authors be partly attributed to cultural heritage and a country's economic health.
Driving the positive change is growing awareness on the importance of diversity. “It is no longer box-ticking; gender diversity is now recognised as a strategic issue that impacts business outcomes,” said Jessica Clempner from Oliver Wyman and lead author of the report.
Also, growing pressure from supervisors and shareholders to embed diversity and inclusion are starting to show. Clempner; “Senior leadership is increasingly becoming held accountable by linking results to remuneration and tactical initiatives are starting to make a real change.”
No room for complacency
However, financial services still has a long way to go, remarked Ted Moynihan, who leads the Financial Services practice of Oliver Wyman. “Gender balance impacts a broad set of stakeholders in financial services. If the industry is to continue to make progress on gender balance, firms will need to recognise this and take a broad approach.”
One of the challenges to overcome is to increase the representation of women in the more strategic positions. Most roles occupied by women on executive committees continue to be within corporate functions. Only 6% of CEOs are for example women, while only 21% of divisions are led by women. The story for boards is no different, with only 9% of chair roles held by women.
In comparison, 58% and 46% of human resource and marketing director roles are held by women. “Some still view placing a woman in this role as a riskier option, with higher scrutiny and expectations,” said Moynihan.
Another improvement area is the growing gender performance variance within the industry. Despite starting with a blank slate, fintech firms struggle with gender balance at the board level. More importantly, large players such as banks and insurance companies have failed to reach 20% executive committee representation.
Looking ahead, Oliver Wyman foresees an uphill path to gender diversity in management roles. “The industry has been grappling with gender diversity for years, and as a result a lot of the low-hanging fruit has been picked. Now comes the tough stuff: cultural change, tackling unconscious bias, and changing behaviors. The issues will get harder to address.”
