Out-Law News | 12 Oct 2016 | 10:52 am | 2 min. read
Of the 72 firms who have signed the Treasury-backed Women in Finance Charter since it was set up earlier this year, 60 have committed to filling 30% of senior roles with women by 2021. Of those, 13 firms including the Financial Conduct Authority (FCA), Legal and General and Virgin Money have committed to complete gender parity in senior roles within the next decade.
Actions firms have committed to as part of their gender diversity strategies include improving flexible working, implementing gender neutral recruitment and distributing high-profile work more fairly. Signatories to the Women in Finance Charter have committed to nominating an individual executive as responsible for their gender diversity targets, but to date only 20 firms have assigned that role to their chief executives.
Diversity and inclusion expert Linda Jones of Pinsent Masons, the law firm behind Out-Law.com, said that it was "very encouraging" to see the positive responses of firms to the Women in Finance initiative.
"What is particularly significant is that not only have the signatory firms committed to targets, they have also published the steps that they will be taking to make sure that the progress they make is sustainable rather than short term," she said. "This commitment, coupled with the new law on gender pay gap reporting which will come into force next April, represents a major step forward in ensuring that diversity and inclusion is central to strategy for the financial services sector and should hopefully influence employers in other sectors to follow suit."
"Many businesses now realise that a diverse workforce and an inclusive culture are critical for success in today's economy, but they don't necessarily have the right strategy to achieve the necessary change. The approach being taken in the financial services sector could provide a good role model for other businesses," she said.
Financial services is the UK's highest paid sector but also the one with the widest gender pay gap, at 39.5% compared with 19.2% across the economy as a whole. A review commissioned by the government, and led by Virgin Money chief executive Jayne-Anne Gadhia, found that women currently hold about 23% of positions on UK boards but only 14% of executive committee roles.
The Women in Finance Charter was established in March in response to Gadhia's report. Participating firms commit to four actions to improve gender diversity: setting internal targets for gender diversity in their senior management; publishing progress reports annually against these targets; appointing a senior executive responsible for gender diversity and inclusion; and linking their executives' remuneration packages to gender diversity targets.
Gender pay gap reporting requirements for large UK employers are due to come into force in April 2017. From this date, businesses with more than 250 employees will be required to calculate their mean and median pay gaps based on gross hourly pay for men and women, as well as their mean gender bonus cap. They will also be required to publish the numbers of men and women employed within each 'quartile' of their pay distribution. The first figures are due to be published in April 2018.
Theresa May, the prime minister, said that the UK's "world leading" financial services sector could "do even better if it made the most of many talented women who work in finance".
"It is good news that so many firms have signed the Women in Finance Charter and are now dedicating themselves to tackling gender inequality," she said. "They recognise the business case for doing so and with ambitious targets to deepen the female talent pool, these firms are leading the way."
"I want to see a diverse sector run by talented men and women and I look forward to seeing many more businesses promoting women and helping to make the UK the best place in the world to do business," she said.