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Breaking the mould

04 May 2016

Women are making inroads onto the boards of Britain’s top companies.

Have we reached a tipping point regarding the representation of women on boards in the financial services sector? The report Empowering Productivity: harnessing the talents of women in financial services found that women accounted for just 23% of places on boards in the sector and only 14% of executive board posts1. But the report’s author, Jayne-Anne Gadhia, Chief Executive of Virgin Money, is making her report the starting point of a process of change, not the end point of her work.

Her recommendation – that financial services firms link bonus payments to the success of senior managers in improving gender balance – gives the sector a clear example of what the government expects of them.

There is substantial political backing for the project. The report was commissioned by the Treasury and Harriett Baldwin, the Economic Secretary to the Treasury, has accepted its recommendations ‘in full’. Baldwin’s support reflects a broader governmental interest. Prime Minister David Cameron (who has appointed 10 women to his 30-strong cabinet) told the Conservative party conference in Birmingham last year: ‘You can’t have true opportunity without real equality.’

There is still some way to go to achieve equality, however. Looking at all companies – not just those in finance – the stats show that just more than a quarter (26%)of board members of FTSE-100 companies are female. Women are taking the lead role in some businesses, however. Caroline McCall, Chief Executive of airline easyJet, and Alison Brittain, her counterpart at hospitality and leisure giant Whitbread, are among the women in senior executive positions at high-profile companies.

St. James’s Place itself has a female Chair, Sarah Bates, and a female Non- Executive Director, Baroness Patience Wheatcroft. Noël Harwerth, Chair of GE Capital and a Non-Executive Director at Standard Life, mentors other women and believes that they will one day make up 50% of boards. ‘It relates to the talented women that are in the pipeline,’ she says. She believes that these younger women will be making their mark within the next decade or so.

Baroness Wheatcroft, who is also a Non-Executive Director at Fiat Chrysler Automobiles, believes lessons are being learnt. ‘Financial services is a complicated area,’ she says. ‘We’ve seen in the banks how culture can go badly wrong. It’s slowly dawning now that you need a mixture of talents, skills and personalities at the board table.’

What else needs to be done to help women achieve better representation and to reduce the gender gap? Role models are needed, says Lily Lapenna, Chief Executive of MyBnk, an organisation which teaches the young about finance and enterprise. Mentoring and encouraging more girls and women to study finance are among the suggestions made by Lawrence Wintermeyer, Chief Executive of Innovate Finance, an organisation working in the area of finance and technology. ‘We are going to have to do a lot more to get women in technology and business roles if we are to have a 50/50 representation in business,’ he says.

Meanwhile, although it is coming down, the gender pay gap was still 19% for full-time workers in 2014, according to figures from the Office for National Statistics2. The government hopes to reduce this further; from April 20181 employers with 250 staff or more will have to disclose how much they are paying their male and female employees, and the government will publish a league table of the results.

Boards and their companies will be different when women are better represented, say the women who already have seats on them and on their committees. Lily Lapenna, a member of the Money Advice Service’s Financial Capability Board, says: ‘When women are involved there’s a sense of inclusivity and a much more collective approach.’

Noël Harwerth adds: ‘There is a different dynamic in boards that have diversity. Boards function differently when people approach problem solving from different perspectives.’

1 www.gov.uk, 2016

2 www.ons.gov.uk, 2016

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