A Women in Finance Charter report found some progress on getting more women into senior management roles, but a widening gap between those at the top and those at the bottom when it comes to progress.
Financial firms which have signed the Women in Finance have made up some lost ground since the pandemic, but the gap between those with over 40% women in senior positions and those with poor representation is widening, according to an annual review.
The review of the Women in Finance Charter, a voluntary pledge created in 2016 to boost the number of women in senior roles, found a third (34%) of the 235 signatories analysed have met their targets for female representation in senior management, and a further 47% that have targets with future deadlines said they are on track to meet them.
After a plateau in progress in 2021 (when average female representation remained flat at 33% year-on-year), the reports says signatories have recovered lost ground, reaching an average of 35% of senior roles being occupied by women in 2022 and, for the first time, the top quarter of firms (52) signed up to the Charter that conduct regulated financial activities have achieved at least 40% female representation in senior management. However, the gap between the top and bottom quartile is getting wider.
Of the 73 signatories with a 2022 deadline, 44 hit their targets and the remaining 29 missed them, slightly down from 31 in 2021. Of the 29 that missed, 22 were close – either within five percentage points or five appointments of hitting their target.
The report says there has been a significant shift in how signatories are using data to monitor actions undertaken to pursue targets and to understand their impact, particularly hybrid working. Post-pandemic, 91% of signatories are exploring some form of hybrid working, and more of them are charting potential negative impacts on women.
Moreover, signatories are extending diversity data collection, with 80% capturing additional diversity data about their female senior managers, up from 53% in 2020. Ethnicity, sexual orientation and disability are the most commonly collected datapoints. However, the report says most firms are at the early stages of analysing this expanded dataset.
Another positive development is that accountable executives on boards are taking an increasingly strategic approach, says the report, and their role is expanding by adding diversity strands and/or new topic areas, such as gender pay gap reporting and flexible working.
Moreover, more signatories are finding the link between diversity targets and pay is making a difference, with 64% reporting that they believe the link to pay has been effective, up from 53% in 2021. This is seen as a business rather than an HR issue.
When it come to the future, half of signatories (50%) have set a target of at least 40%, corresponding with the Treasury’s desire for alignment with the FTSE Women Leaders review. Average targets rose across all signatory sectors and sizes. However, many firms do not publish their progress in detail. The report found that, while 77% of signatories posted an online update on their progress by the required deadline on their company website, only 36% included the required details, and the quality and format of reporting varied significantly.