Following moves by Google and the big US technology firms to disclose diversity data, the think tank, New Financial recently analysed what the biggest companies and organisations across the financial markets (including banks, investment banks, asset managers, stock exchanges, law firms, central banks and regulators) in Europe say about their approach to diversity on more than 50 criteria.
Below are the highlights of the findings
Why should we care about diversity disclosure?
- Disclosure is important as a statement of intent – to acknowledge that the capital markets industry is starting from a difficult position but wants to change, is capable of change, and how it plans to make those changes, without waiting to be told what to do by regulators.
- Diversity disclosure could be an important step towards improving diversity in European capital markets.
- Greater diversity disclosure is linked to increased diversity. We found a positive correlation between disclosure and female representation on boards, which is an example of a desirable diversity outcome.
The good news:
- Diversity is becoming a standard feature of annual reporting for the capital markets industry, with 90% of our sample mentioning diversity and 77% publishing hard numbers about workforce diversity.
- Companies disclose most on gender, followed by ethnicity and then disability. However, focus on gender does not crowd out non-gender diversity characteristics. We found the more companies disclosed on gender the more they disclosed on non-gender diversity characteristics.
- There are companies taking a lead on diversity disclosure. Our top three firms are Lloyds Banking Group, the Financial Conduct Authority and Barclays.
The not so good news:
- The data set is not consistent. There is huge variety in the depth and nature of disclosure, which makes comparison between peers, across sectors and over time very difficult.
- While more than three-quarters disclose some diversity data, only 40% provide historical comparisons and just 25% set targets.
- The capital markets industry is starting from a very low base on diversity disclosure. Of our sample, 15% scored zero, a third scored 5% or less, and almost half score 10% or less.
What was analysed
- latest annual reports
- corporate social responsibility reports
- diversity reports and company websites to gather information on 57 criteria across six areas:
- Workforce data: Hard numbers give us an insight into how diverse an organisation is right now
- Track record: Disclosure of comparable figures from previous years
- Networks: Disclosure on companies’ internal affinity groups
- Initiatives: Programmes or policies to retain and promote diverse employees
- Recruitment: How companies factor diversity into hiring practices
- Targets: Specifically defined diversity targets
View other reports in our Knowledge Bank on Gender Diversity, Female Leadership and associated topics.