Lengthy approval processes and cross-border issues may be among the reasons that some global financial institutions are stalling on signing up to a U.K. government-backed pledge for gender equality, according to industry insiders. But entrenched attitudes toward women in the workplace could also be a factor.
The Women in Finance charter, launched in 2016, asks financial services firms to commit to measures supporting the advancement of women in senior roles, and requires them to publish their progress annually. As of November 2017, the Charter had 162 signatories, but a number of global institutions active in the U.K. have yet to sign.
Women take part in a "March of the Mummies" protest for better protections and support for working mothers returning to work after giving birth. The protest, which took place in October 2017 in London, was organized by the "Pregnant Then Screwed" group.
Nicky Morgan, the Conservative chair of the influential parliamentary Treasury select committee, said Feb. 15 that she had written to over 30 firms, including BNP Paribas SA, Bupa and the asset management businesses of JPMorgan Chase & Co., Goldman Sachs Group Inc. and UBS Group AG to ask why they have not yet signed. The committee has also opened an inquiry into the progress made to date by the charter, and into the barriers to progression in the industry by women and the value to firms of greater gender balance.
Those that have signed include Britain's big five banks — Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc, Santander UK Plc, Barclays Plc and HSBC Holdings Plc, as well as insurers including RSA Insurance Group Plc, Prudential Plc, Aviva Plc and Legal & General Group Plc, the London Stock Exchange Group Plc, Credit Suisse Group AG, Deutsche Bank AG and U.K. divisions of Ageas SA/NV and AXA.
'Catalyst for change'
Possible reasons why some are taking longer to get to grips with the charter include long chains of command needed to get approvals from head office, and jurisdictional issues in the case of international firms, said Yasmine Chinwala, a partner at New Financial, a think tank focused on capital markets and banking. But gender inequality is still rife in financial services, and pressure is building on firms to take action, she added.
Female representation stood at just 14% on executive committees and 23% on boards of U.K. financial services companies, according to data compiled by New Financial in 2016 for the Gadhia Review, which was commissioned by the Treasury and named after Virgin Money Holdings (UK) Plc CEO Jayne-Anne Gadhia, who has also advised the government on gender equality in the City.
"The Charter is a real catalyst for change — it is asking for progress but also at pace," Chinwala said. "I think it poses a reputational risk to not sign, and at some point that risk will outweigh the risk of signing."
Chinwala noted that the charter is not concerned with unequal pay, but she said it supports the concept of gender pay gap reporting. Under new U.K. rules, all companies with more than 250 employees must report information on gender and pay to the government by April 4, and submissions to date have tended to reveal significant gaps, in large part because men occupy a disproportionate share of more senior posts.
Virgin Money, for example, reported that it pays women 32.5% less than men on average, while Co-operative Bank Plc reported a gap of 30.3%. Virgin Money recently became the first company in the FTSE 350 index of Britain's largest firms to have women as both chair and CEO.
A representative for UBS said that although the bank is committed to the charter in principal, "any charter focused on one country brings limitations and adds complexity." A spokesperson for Metro Bank Plc, which was one of the banks Morgan wrote to, said it had signed in January. BNP Paribas will do so "at the earliest opportunity," according to a spokesperson, while a Goldman Sachs representative said it is "committed to promoting diversity and inclusion at all levels of the firm" and will be participating in the charter.
Geraldine Gallacher, an executive coach focused on banking and law, whose firm has advised Bank of America Merrill Lynch International Ltd. on a returning mothers' program, says global firms may simply not be making the U.K.-specific charter a priority. But their failure to sign could point to deeper institutional issues, she added in an email.
"It requires massive cultural shift to make these companies more attractive to women, and even to recognize there is a problem in the first place," she said. "The people at the top of these organizations get the need for more diversity and so do the millennials coming in at the bottom, but there is a very sticky layer in the middle where there's actually a lot of resentment from men about the focus on women.
"I have had male managers say to me 'you have to be a woman around here to get promoted.' This isn't something they would be willing to go public on because they understand well the need to be seen to say the right thing. It doesn't mean they believe in it though."
There is still a need to move "hearts and minds" in the financial services industry on the issue of gender diversity, she added.
'It says a lot'
Anne Boden, CEO of Starling Bank and former COO of Allied Irish Banks Plc, sees failure to sign the charter as a poor reflection on banks.
"The Charter isn't prescriptive, so I can't help but feel it says a lot about an employer if they aren't willing to sign up and publicly commit to a declaration of fairness and equality for women. It certainly makes one wonder about how they operate privately," she said in an email.
But Christian Faes, CEO of alternative lender LendInvest Ltd, one of the firms named by Morgan as not having signed the charter, said the company had not been asked previously to sign.
"We're very supportive of women in the workforce and about 40% of our hires, including senior management, are women," he said in an interview, adding that Morgan's comments had been "set up to get a headline and not a result."