As the sun sets on International Women’s Day, Sophie McIntyre looks at how women can increase the bottom line in City firms
The Nasdaq closing bell will be rung by two women today - Jill Mavro, asset manager and co-president of Women in ETFs, and Lise Kingo, executive director, United Nations Global Compact - in honour of International Women’s Day.
But nothing so poignant is occurring in London. As we commemorate the women who struggled to win both economic and political rights, it seems that our financial sector is still a gauntlet for the fairer sex. The glass ceiling remains in the boardrooms of the City despite the efforts of companies, government and hard-working individuals.
According to recent research, women are still struggling to make it to board level in finance. A New Financial report found that just 23 per cent of board directors of UK financial services companies are female, with women making up only 14 per cent of these firms’ executive committees. A government review identified a ‘permafrost’ in companies’ mid-tier sections which stops women getting to the top and observes that ‘many are leaving because the culture isn’t right’.
And the figures are most shocking for private equity, a sector that seems to have developed a raft of concrete in place of a traversable glass ceiling. The figures show a huge disparity between banks and private equity houses - only seven percent of private equity boards are female, with the figure at 31 per cent in challenger banks.
So why, in a country where we are onto our second female prime minister, is this still happening?
‘Research has shown that there are still biases and reservations in our industry about hiring women, providing career trajectories and offering equal mobility of achieving success’, says Hanneke Smit, chair & co founder of Level 20, a group dedicated to improving the percentage of women in senior private equity roles to 20 per cent by 2020.
Crucially, this is not only bad for women, it’s bad for the bottom line.
The number of women with an income of over £1 million is increasing 10 per cent year on year and the number of female billionaires soared by a whopping 1727 per cent between 2000 and 2016. Investors would be mad to ignore the investment potential of these ladies.
Perhaps ditching the men’s club culture and increasing gender equality in finance houses would make female investors feel more welcome and more open to speculation.
But aren’t all Europe’s big financial cities like this? No, not really. It seems that we could definitely learn a few lessons from our European counterparts.
The Nordic regions are often cited as a role model for gender equality and with good reason. Norway was the first country in the world to introduce a quota for women on boards and Swedish, Finnish and Danish companies have to set themselves gender diversity targets. France and Germany also both have board quotas for women.
We have made progress in recent years - the Davies review of women on boards led to an increase female representation on FTSE 100 boards from 12.5 per cent in 2011 to 26 percent over five years without resorting to regulation - an impressive feat.
So here’s to hoping that new initiatives can work the same magic for wealth management and the City. The government is taking action to improve gender balance throughout the executive pipeline. It launched the Treasury’s Women in Finance Charter in 2016, specifically aimed at improving opportunities for women in UK financial services.
But more progress is needed if London’s finance world is to benefit fully from women’s unique skill sets and also their wallets.
Sophie McIntyre is the editorial manager at Spear's