Unfortunately, the glass ceiling for women in executive positions in the financial services industry is still holding despite some positive fractures to the barriers to advancement, according to a report from management consultant Oliver Wyman.
The findings of the annual report, “Women in Financial Services,” are based on a review of the 150 largest financial services companies, interviews with more than 60 women, and to a lesser extent, men in senior posts, and surveys of more than 1,000 “current and potential financial services employees” the third quarter of 2014.
The report’s findings range from stunning — “Over one third of leading financial institution [executive committees] are still entirely male” — to major signs of progress such as the number of women at the board level has jumped two thirds over the last 10 years, resulting in 20% of all financial services firms now having women board members.
However, it’s the bad news that feels pervasive. For 2013 at leading financial institutions, only 4% of CEO posts for financial services firms were held by women and 13% of executive committees (ExCo) actually had women members, according to the report. Somewhat more disturbing is the fact that only a few women are on the path to becoming CEOs. The report finds that “only 11% of women hold senior roles with profit and loss (P&L) responsibility; only 8% of chief financial officers and 4% of chief risk officers are women.”
As for the situation globally, the report uncovers a few rays of hope for women and ExCo membership: Norway has the highest with 35%; Sweden has 29%; Canada weighs in at 23%; Russia has 20%, which beats the U.S. at 16% and the U.K. at 12%. Only 7% of Germany’s ExCo membership consists of women and Japan has 0%.
There is also split in the way that men and women perceive the problem:
- Only 49% of men and 41% of women surveyed feel that their firms are doing enough to attract and retain female talent;
- 51% of women working in the sector believe that better gender balance in senior management positions should be a top priority, but less than one-third, 30%, of men agree with that view;
- And 52% of men say that men and women have the same opportunities to be promoted in the same time-frame but only 41% of women agree.
Not only do men and women think differently about their paths to glory, they actually have different paths. The report finds that in the financial services industry women are “only 45% as likely to progress from middle to senior levels of management relative to their male counterparts (U.S. data) – lower than in other sectors,” according to the report.
The current culture of “long hours and ‘face-time’ disadvantages those who wish to work more flexibly to combine their home and work responsibilities,” according to the report. In addition, the report finds that “women with potential” will not be sponsored and mentored as often as men are to move into senior management roles, and women “can struggle to find role models.”
The report’s authors find that while the industry has been wrestling with gender balance, “only by tackling its culture, unconscious biases and working practices will the sector be able to succeed in the war for talent.”
All is not lost as the report has found six approaches to provide some balance to the situation:
- Challenge conscious and unconscious biases and assumptions;
- Focus on gender balance beyond the board by supporting P&L experience early in women’s careers;
- Adopt family-friendly practices for women and men;
- Support returnees to the industry;
- Sponsor women from the top;
- And monitor and measure progress.
But, even if the cultural and other biases fall, why is it so important to achieve diversity?
A lack of diversity in executives and among the new blood for the company pushes talent out the door, says Michelle Daisley, partner, Oliver Wyman. This is especially acute as “an urgent retention challenge” is underway in the U.S., Sweden, and the U.K. where 50% of all junior employees are women.
“The lack of diversity – both gender and otherwise – in our industry is bad for business,” Daisley in a prepared statement. Diversity boosts decision-making, performance, sustainability, service and profits in the long-run, she says.
“Firms with less diverse management teams are less able to see issues from many angles,” Daisley says. “This is especially important for a sector that has recently suffered scandals attributed to unchallenged leadership and ‘groupthink.’ The pace of change is too slow.”
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