Female talent struggling to reach the top of the financial services industry


24 May 2023

Pension funds have more women in leadership roles, but the wider financial services industry needs a push, finds Andrew Holt.

Pension funds have more women in leadership roles, but the wider financial services industry needs a push, finds Andrew Holt.

At the current rate of progress, it will take 140 years to achieve parity between men and women in leadership positions in the financial services industry, based on the latest Gender Balance Index.

The index, now in its tenth edition, tracks the presence of who is holding senior positions in central banks, commercial banks, pension funds and sovereign wealth funds.

Across the sample of 336 institutions, 14% are led by women. This is slightly up from 13.7% in 2022 and 13.3% a year earlier. Representing a marginal increase in each of the last three years.

However, female representation is better lower down the ladder. Women make up around a quarter (24%) of deputy governors and c-suite staff, and almost a third (30%) of the 6,221 senior staff across all institutions in the index.

The Official Monetary and Financial Institutions Forum, which compiles the data, digs deeper to consider the types of senior roles women are holding.

It finds that 62% of female executives in commercial banks, pension funds and sovereign wealth funds are in revenue-generating roles. That compares to 83% of their male peers.

What’s the score?

The index encompasses these key data points into a single metric of gender balance for individual institutions. It takes the share of women and men in senior management or board positions, with greater value given to higher ranks such as governor or chief executive.

A score of 100 means an organisation has achieved a 50-50 gender balance. The 2023 index scores reinforce the overall message of slow progress. All institutions advanced their index scores in the past year by 1 to 2 points.

Pension funds stand out in this scenario. They continue to outperform with an aggregate index score of 50 out of 100 – meaning they are just halfway to achieving gender parity.

In comparison, the global score for commercial banks and central banks is less than 40, and is only 23 for sovereign funds. Here the index pointed out that there is only one additional female governor of a central bank globally compared to 10 years ago.

Samantha Gould, head of campaigns at Now Pensions, said the report is another chance to raise awareness and draw attention to the issue of gender parity at financial institutions, but also shows how quickly awareness must be followed by action. “Redressing the gender imbalance is a complex issue,” she said. “But progress continues to be slow when you think that anyone born in the year of the UK’s Equal Pay Act [1970] would almost be old enough to start accessing their pension savings.”

Highly symbolic

Seeing only nine female chief executives in the FTSE100 is, Gould said: “Symbolic of the many issues which need consigning to the past, including the gender pension gap and the barriers that prevent many women from accessing funding to start their own businesses.

“Locking experienced women out of senior roles is not in the best interest of society or individual businesses,” she added. Barbara Rambousek, director of gender and economic inclusion at the European Bank for Reconstruction and Development, noted how the index reveals how much work is needed on gender representation. “There is a lot to be done to make the financial sector more gender equal and inclusive – and a call to action for us all,” she said.

To assist in this, the CFA Society UK has opened applications for the second year of its Young Women in Investment programme, to accelerate the change needed in the investment industry and to combat the gender gap.

The programme consists of a four-week virtual ‘bootcamp’ and is open to female students graduating within the past two years.

Industry understanding

They will have access to a mix of instructor-led sessions and self-study learning materials with the aim of building investment industry knowledge and business skills for the workplace.

Participants will be introduced to investment management concepts, including an overview of the industry, regulations and regulators as well as macro and micro-economic factors.

Alongside a broad understanding of the industry, candidates will also learn about risk management, portfolio construction, different asset classes and capital markets.

Sarah Maynard, global senior head of diversity, equity, and inclusion at the CFA Institute, said gender diversity remains a challenge in the investment industry – a point highlighted by the Gender Balance Index. “While many UK firms have adopted a 50/50 approach to entry-level recruitment, more work is needed to create opportunities for women to enter the industry through non-traditional routes and in ways that shore up their chances for ongoing success,” she said. “That’s why we are delighted to announce the return of our Young Women in Investment programme in the UK.”

Last year, the CFA piloted a UK programme with 40 ‘boot-camp’ participants and eight investment firms offering internships. “This year we hope to build on that success by offering bright, hardworking and self-motivated individuals a route into the investment industry,” Maynard added.


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