Women in Finance Charter
A roundtable breakfast was held in 2017 to discuss the Charter and its role and relevance for UK
fintechs, hosted by Virgin Money and the Qadre team. Participants at the roundtable, which included both Fintechs who had already signed the Charter and those who were interested in signing-up, discussed the specific challenges facing Fintechs who wished to sign the Charter.
HMT Women in Finance Charter:
The Charter attempts to give signatories tangible methods and has four key recommendations:
- Firms should have one member of the senior executive team who is responsible and
- accountable for gender diversity and inclusion;
- Firms should set internal targets for gender diversity in senior management;
- Firms should publish progress annually against these targets in reports on their website; and
- Firms should have an intention to ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity.
A senior executive – whether male or female – is to be responsible and accountable for taking forward gender balance within the firm and for ensuring the targets are met. Successful senior accountable executives are often visible leaders from a business line, with both male and female leaders proving strong advocates in many of the signatory firms present. However, the target remains a shared responsibility – requiring accountability and endorsement throughout the organisation.
Setting and meeting targets was a concern for some signatories who were concerned about the consequences if they were unable to meet their objectives. Attendees were reassured to hear that there are no sanctions for not meeting a particular target. Of those who did set targets, most were positive about their effectiveness and 90% extended their focus from gender to other types of diversity such as ethnicity.
Some attendees said that their firm had initially been uncomfortable linking the senior leadership’s pay to successfully achieving their targets. However, most recognised that incentivising senior executives through such a linkage was the way in which financial services firms would seek to address any key business issue – and that progress on gender balance should therefore be addressed in a similar way.
There was a broad consensus around the table amongst those who had signed the Charter that this linkage had ensured greater senior management focus on diversity issues.
Some of the start-ups around the table questioned whether this approach was suitable for smaller companies, for example where variable pay did not form part of their remuneration structure. They were reassured to hear that the Charter was flexible enough to accommodate those firms – not just fintechs but also Building Societies – with remuneration structures that do not contain a variable element.
The point was also raised that many start-ups believed the charter was not relevant to them as the “inclusive” culture it was promoting was already ingrained within their organisation and that the fin tech sector was more progressive than other financial services firms. However, although fintechs are often perceived as more forward-thinking and inclusive than more established financial services firms, some fintechs at the round table told us that they had no women either on their board or in their leadership team. This powerfully illustrated that gender imbalance is a serious issue for fintechs as well as other financial services firms.
Attendees from larger, more established firms explained that they had more women than men in more junior roles, but that at more senior levels their principal challenge was to bring more women into leadership roles. Conversely, the challenge was to recruit more men into more junior positions.
It was suggested that one key barrier that prevented more women from progressing from mid-management to more senior roles was the impact of maternity leave or a longer career break. Many participants at the roundtable said they had found re-entering the workplace difficult due to a lack of flexible working opportunities and appropriate support from their company, which they attributed to this. inflexible working environment that they often encountered upon their return to work.
Attendees suggested that companies needed to be braver and to enable gender-agnostic support – preventing bias on both sides by providing the same flexibility in maternity/paternity leave, discouraging quota-filling and undertaking continual evaluation of gender bias within the organisation. This would help flexibility be seen as a matter that is relevant to all employees.
HMT said that they were very happy to talk to potential Fintech Charter signatories to discuss the four recommendations and how Fintech firms who had already signed the Charter had gone about meeting their obligations and setting targets.
WHY THE EVENT AND WHAT IS THE HMT WOMEN IN FINANCE CHARTER? Virgin Money's recent survey of women in the UK's financial market revealed that only 50% of women, compared to 70% of men, believe they have an equal opportunity to advance, regardless of their personal characteristics or circumstances.
Analysis by New Financial of 200 financial services firms operating in the UK showed an average of 23% female representation on Boards, but only 14% on Executive Committees. While these statistics are deeply disappointing, they will not surprise anyone who has worked in the UK's financial services sector, where women join the sector in equal numbers to men, but are under-represented in the most senior positions.
To date, almost 150 UK finance companies have committed to addressing gender balance issues within their firms by signing the HMT Women in Finance Charter. However, many of the key incumbents and fintechs have yet to follow suit. To date, only a handful of fintech firms have signed the HMT Charter and the Treasury Minister – Stephen Barclay – responsible for taking forward the Charter has stated that he is keen to increase this number over the coming months.
The HMT Charter emerged from the review of women in the financial services sector by Jayne-Anne Gadhia, CEO of Virgin Money. Virgin Money have subsequently championed the charter within the finance sector.