Bonuses for the bosses of the UK’s financial firms should be tied to female representation in senior positions, according to a review backed by the government released today.
The report, penned by Virgin Money CEO Jayne-Anne Gadhia, also suggested firms publicly disclose their gender balance across their entire workforce.
“My report proposes addressing the issue in a way that the City will recognise,” Gadhia told reporters. “Make it public, measure it and report on it. What gets published gets done.”
“Make it public, measure it and report on it. What gets published gets done.”—Jayne-Anne GadhiaThe report is part of a drive to level out male dominance in finance—especially at senior levels—and highlighted the failure of many firms to acknowledge and tackle poor female representation in the industry.
“Diversity disclosure is important, because it is indicative of diversity outcomes—for example, as levels of disclosure increase so does female board representation,” think tank New Financial said in its report on the issue in June.
New Financial found while 62% of firms operating within the financial arena—including law, accounting and other service areas—reported their gender diversity, just 29% showed how this figure had changed over the previous 12 months.
“Aligning the bonuses of executives to gender diversity targets at senior levels is the first step in reducing the subtle biases that exist against women in many workplaces,” said Shainaz Firfiray, assistant professor of organisation & human resource management at Warwick Business School.
Research by CIO last year found female representation in financial services to be unequal around the world with 90% of money management positions being taken by men.
Oliver Wyman found just 4% of CEOs at the top 150 global financial firms are women.
“In the long run, aligning the pay of executives to meeting gender diversity targets at all levels might help facilitate a change in existing mind-sets and encourage greater appreciation of the contribution that women make within the financial services industry,” said Firfiray. “In order to successfully identify and nurture female talent, companies need to ensure that the composition of its management and employees reflects an understanding and appreciation of gender diversity.”
The UK government-backed report is launched today to coincide with a summit of financial services executives, hosted by the Treasury, to discuss how to increase women’s representation in senior roles.
A final report will be published next year after a consultation exercise on the proposals made by Gadhia today.
Related: The Missing Women of Asset Management & Diversity in Finance: Hope over Action?