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The Women in Finance Charter which was launched by HM Treasury in March 2016 to encourage the financial industry to improve gender balance in senior management, has recently published a report which monitors the progress of the first cohort of 68 Charter signatories.
To date 85% have either met their targets or are on track to meet them but progress has so far been slow.
The highlights of the first Annual Review are:
Meeting targets: Just over a quarter (28%) of signatories have met their targets for female representation in senior management since the Charter launched 18 months ago and more than half (57%) say they are on track to meet their targets.
Moving in the right direction: The proportion of female senior managers is growing – more than three-quarters (78%) of signatories either increased or maintained the proportion of women in senior management during the reporting period.
But progress is slow: The percentage of women amongst senior managers increased by 3% on average in the first year and will need to increase by a further 27% in order to reach the average target for the cohort by 2022. This means a further 2,300 more women will need to be in senior roles.
Laying the foundations: While a 3% increase across the cohort may seem a low figure, the signatories’ data clearly shows they have engaged in a wide range of activities in this first reporting year of the Charter in order to accelerate the pace of change in future years. Nearly half are using the Charter framework to set gender targets beyond senior management.
Top actions driving change: The most frequently reported actions signatories have undertaken are leadership and development programmes, widening accountability for improving gender diversity, and ensuring female representation on longlists and shortlists for senior roles.
An achievable number: About 2,300 women will need to join the ranks of senior managers across the 68 signatories in order for them all to meet their targets, equivalent to an increase of 16% on the number of senior female managers today. The 17 banks in the cohort will need to add two thirds of these 2,300 additional women.
The wider influence of the Charter: The commitments made by Charter signatories are also having an impact on their approach to non-gender diversity characteristics, particularly ethnicity.
Accountable executive is not just a title: The senior leader named as accountable for improving gender diversity is more than a figurehead. For 80% of signatories, the accountable executive has taken specific actions to drive gender diversity, for example advocating to build momentum around the Charter.
Link to pay: A third of signatories believe the link to pay has been effective as a signal of intent, even though many have not been through a bonus season yet and the actual portion of pay linked to diversity is modest.
The challenge ahead: Average female representation in senior management (across signatories who still have a target to reach) is 27.9%, with an average target of 35.5%.
The Charter now has 205 signatories covering more than 650,000 employees across the UK.
WiC Comment: In the world of finance “money talks” and rewarding those who not only meet, but exceed, targets could be the best of the Charter’s principles to speed up progress.