It’s now 1:30 in the morning. I am not often up this late, but when I am, it’s usually because I’m partying with my wife, Tina. Tonight is different, though. Something is keeping me awake, which is rare. I have a task in the morning where I have to write one of those reviews of the year just gone and try to make some (generally positive) predictions for what we’ll see in the coming 12 months.
The reason this challenge is causing me insomnia, is an increasing level of frustration with the pace of change (or should I say lack of change) in the financial services industry in the UK. It genuinely feels like we are no closer to a more diverse industry now than we were last January.
Little progress – and some steps back
A few years ago, we helped launch The Women in Finance Charter. Back then, we were all sure the Charter would be a positive catalyst for change. However, the lack of transparency in firms’ commitments and the lack of consequences for not meeting targets mean that signatories to the charter can simply use it as an endorsement – a PR exercise where they can say “we are signatories to this charter” (so we must be good). I have seen one firm, TSB, admitting they have failed to reach targets and are complying with the charter commitment that requires them to reduce management bonuses as a result. On the other hand, a large number of firms are reporting that they have met their commitments, but a look at gender-pay-gap reports shows movement in the other direction.
The second years gender pay gap reporting told us more about the lack of progress made by financial institutions in recruiting, promoting and retaining women in the industry. Nearly half the firms made no progress at all or even went backwards. Of those that had made progress, it was so slow that gender parity for most of them would not be reached for another 20 to 30 years. The third annual deadline for reporting gender pay gaps is almost upon us and we will find out the state of gender diversity in the industry in April 2020 Firms will produce a brochure to accompany the statutory figures. Will they be telling us once again that progress is slow? Will they have changed strategies after admitting that the previous ones were not enough and had little effect?
I could go on and on (and on)! I’m a solutions-type person. A doer. Don’t let anyone tell you the problem is a lack of talented women. There is an abundance of talent out there. We know, because many are in our community. The problem is a lack of consequences.
My hopes for 2020
With all that said, here’s what I hope for 2020.
- It’s time the industry and national press got to grips with the subject and started to publish the scandal – just how big the gap is between what is being said and what is being done (let alone achieved).
- It’s time that HM Treasury reinvigorated, and put some energy behind, the Women in Finance Charter. If they need outside help, they should get it. The aim should be to make the Charter a force for good rather than the seal of (wrongly perceived) excellence it has become for signatories. HM Treasury should not be afraid to call out underperformers and celebrate those doing well.
- The regulators are rattling their sabres about diversity in the industry, but I don’t think it’s very convincing. They need to do more. Culture and conduct are top priorities for regulators – and increasing diversity is key to improving culture. I’m sure a cursory review of gender pay gap reports would also uncover a few conduct issues. The regulators need to develop consequences for underperformers.
- Customers and shareholders need to do more. For example, investment managers are increasingly making investment decisions based on ESG factors, which is forcing companies looking for investment to meet governance criteria. These include diversity. However, the opposite should be true as well. The large pension funds/money owners should be demanding progress, beyond pure board diversity, towards a diverse fund or investment management firm. They should even consider withdrawing mandates from firms that are not making progress.
- We, the people in the industry, need to stand up and be counted as well. Too often we can seem powerless; each of us can feel like a lone voice with nowhere to go. However, we need to be standing up to bad practice at a personal/individual level and at a firm level. We need to call out poor excuses and strategies that don’t work, and hold management to account to prioritise diversity.
Finally, I have my own New Year’s resolution. In previous years, we have tried to focus on the good that is happening. In 2020, we will also become more outspoken about the lack of change – and we will dare to call it out.
I hope you will join us on the journey.