Insights

BRUIN

Forging the path to greater diversity in finance

• Article by BRUIN Financial

Forging the path to greater diversity in finance

Forging the path to greater diversity in finance

By Lucy McNulty, eFinancial News / Dow Jones
07 July 2016
Special Report: FN Women in Finance Briefing: Forging the path to diversity

Ask for what you want, harness millennial’s drive for change, and say goodbye to “superwomen”: these were just three of the steps a panel of industry experts said female talent must take to bring about greater diversity in European finance. The panel were brought together by Financial News on June 30 to discuss the sobering findings of FN’s landmark 2016 poll of more than 700 women in finance in front of an audience of around 100 industry participants.

 

IMG011778_full4x3

L-R: Lucy McNulty (FN), Diane Cote (LSE), Brenda Trenowden (30% Club), Megan Butler (FCA), Amy Nauiokas (Anthemis ) and Robert Thesiger (The FISER Group)

  • THE PANEL

Lucy McNulty, editor, projects, Financial News

Diane Côté, chief risk officer, London Stock Exchange Group

Brenda Trenowden, global chair, 30% Club

Megan Butler, director of supervision, investment, wholesale and specialists, FCA

Amy Nauiokas, founder and president, Anthemis

Robert Thesiger, founder, The FISER Group (parent company of BRUIN Financial)

 

The following is an edited version of the panel discussion:

 

Lucy McNulty, Financial News

How has being a woman affected your career?

 

Amy Nauiokas, Anthemis

When I started out in the early 1990s, it wasn’t something I thought about that often. In fact, I probably didn’t notice it at all. Back then, it was more about doing the work and hoping to get credit for a job well done. But in hindsight, a big part of that was because at the time most places you went there was a certain level of expectation that women were the lesser gender. There were very few [women] at business schools, even fewer on the trading floors, and life in general came with a certain amount of sexism.

 

It wasn’t until I was more senior that I appreciated how much of negative impact it was having on my career. I wasn’t “in the club”, largely because I was the only one that looked like me in the room. It got quite lonely. That said, I have never felt that there was a group of men out to get us or that they were all against women. It’s just a naivety. If you don’t work around women – or any other diverse group – on a regular basis, you won’t have the experience of knowing how other people interact. I think it’s becomes more and more obvious the more senior you get.

 

Robert Thesiger, The FISER Group

For men there is definitely a fear factor: they have dominated society and business over generations and [now] change is happening and a lot of men are scared of it. They feel as though they are at risk; they don’t understand the dynamics of the male-female ratios and so they go back into their shells. They go: ‘No, that’s scary. I’m not going to do that and you are actually going to be better than me, so I’m not going to let you get that promotion because between now and then you are going to take my job’.

 

You have to look at it from an educational perspective and not just grown-ups but also schoolchildren. It’s not just about the workplace for me; it’s about society in general. Equality of gender in society is happening slowly, but you have to educate the schoolchildren so that the next generation of business leaders understands the real benefits of gender equality.

 

Lucy McNulty, Financial News

Robert, it would be interesting to know how being a man has affected your career?

 

Robert Thesiger, The FISER Group

I fell into financial services recruitment in 1991. I had done two internships in a private bank that was 100% men. When I fell into recruitment, I was expecting men and my boss was a woman. Twenty-four years later she has been my mentor, my guide, my coach and she is the one person that made me realise very quickly that people tend to buy – because recruitment is a sales job – more from women because they’re less pushy and more empathetic to what the person wants. Men tend to just sit there and try and force it on you.

 

Amy Nauiokas, Anthemis

I would add that beyond just embracing it from a sales perspective, it’s just good business because women are more than 50% of the marketplace for buying almost any good that’s out there. By not having women in your boardroom, in your C-suite, designing products, developing plans and selling products to service other women, you are missing out on a massive business opportunity.

 

Lucy McNulty, Financial News

The Davies Review [of women on boards] helped increase representation at board level but we are still facing issues relating to gender diversity within the financial sector. Jayne-Anne Gadhia, [the CEO of Virgin Money who conducted research for the UK government into senior women in financial services] has recommended linking senior managers’ pay to gender diversity targets. Is that the way forward?**

 

Brenda Trenowden, 30% Club

I have discussed this with Jayne-Anne and first of all I would say her report was fantastic, very comprehensive and the 30% Club is generally supportive of her recommendations. I think the [issue of] linking pay to diversity targets has been misrepresented. We believe that diversity targets should form part of an overall balanced scorecard. We would never advocate linking pay to one specific target, be it a financial or a diversity target, because we’ve all seen that in financial services, as soon as you link pay and bonus to any one thing it leads to unintended consequences.

 

Certainly all the institutions I speak to are looking more at broader balanced scorecards that have a number of different measures. And the more enlightened institutions are including diversity targets, but certainly not linking them directly to bonuses.

 

Diane Côté, London Stock Exchange Group

What gets measured gets done, and I think that was the good thing about her report. It was controversial but actually, at the end of the day, that is a good thing.

 

Brenda Trenowden, 30% Club

We firmly believe in targets. I think what gets measured gets done and what gets reported gets done even better. We absolutely believe in transparency and in having numbers and metrics around it. Once again, the best companies develop very good metrics to understand where their issues are and then set targets and regularly measure how they are doing.

 

Megan Butler, Financial Conduct Authority

That’s quite interesting, because 20 years ago I would have been resentful about targets around diversity. That was probably true even 10 years ago but I’ve reached a point in my life where as far as I can see, nothing is changing quick enough and I [now] think targets work. My view has completely shifted over the past 10 years from ‘I don’t need that. I’ve made quite a lot of progress, thank you’ to ‘actually, I’m not quite sure how I did manage to make progress, given the barriers that are out there’. It’s a complete change.

 

Amy Nauiokas, Anthemis

It is about putting your money where your mouth is. There is so much talk about how we can be a more diverse and a more inclusive environment in financial services, but there’s not a lot of action.

 

The beauty of targets and forced reporting is that you have to look beyond just the metrics. You have to figure out what in our structure can we change and do we have to change? It’s not easy and it’s why we haven’t seen much progress [because it is difficult for] a financial services institution to shift its entire value system around things like compensation structure, promotion structure. Are management skills and leadership valued? In a lot of financial services firms, the answer is no, it’s about revenue and the bottom line. If it’s exclusively about the business then it’s going to be very difficult to encourage and to reward diverse behaviour in a boardroom or in a C-suite or even at the entry level.

 

Brenda Trenowden, 30% Club

A lot of companies don’t even realise where their problems are until they start looking at some of the really detailed, nuanced numbers. Companies will often report and say ‘we have lots of women, the numbers look great, fantastic’ when in fact they need to be looking at more meaningful numbers, for example identifying how long people have spent in a role before promotion at each pay grade and comparing the gender differential – that kind of stat can be quite illuminating for a company.

 

To give you another example, there was one big bank that did a report where they looked at all the ratings at the end of the year, appraisal scores versus promotions and bonuses, and they realised that the women all scored really high ratings but the men were getting all the promotions and bonuses. Until they looked at the data across the board, they hadn’t seen the disparity. Getting the data and unleashing it to understand where the issues are is the first step.

 

Lucy McNulty, Financial News

We are talking about informal targets here. Would more formalised quotas speed up change even more?

 

Brenda Trenowden, 30% Club

I think absolutely not, but the 30% Club has been very clear that we are against quotas.

 

When Norway introduced the idea of quotas [in 2003] some 563 companies were listed on the stock exchange. By the time quotas went into action [in 2008], 179 were listed.

 

The executive layer below board level in Norway is no better off than [anywhere] else in terms of the pipeline. In fact, I think they’ve robbed some of the executive layer to get more women onto boards.

 

It’s our belief that the threat of quotas in the background is helpful to make people take voluntary action. But unless people buy into it themselves to set their own targets, they won’t do anything to build the pipeline beneath.

 

Diane Côté, London Stock Exchange Group

It’s also a question of sponsorship, and quotas may feel temporary by nature. You need something that is sustainable in the long term and quotas give me the impression of a temporary fix and that’s not what we need.

 

If you [set more informal] targets, where everybody is involved, with a deadline as suggested by the Gadhia Report, then you are building a pipeline that is sustainable and sustainability is what we are trying to achieve. That’s the best thing we can do but it requires lots of engagement from not only women but also men.

 

We need the sponsorship and we need everybody to work together to achieve it because it makes business sense. It’s not a CSR [corporate social responsibility] issue; it’s not something we are trying to do because it’s a nice-to-do for women.

 

Amy Nauiokas, Anthemis

Often when we talk about the pipeline, we [mean] the entry-level career space but we have to talk about it much earlier. It’s about what our daughters are engaged in at school and how they are taught maths, sciences, technology and various other forms of education that might not normally fit the qualifications of what a small girl would go through in the school system. The pipeline has to be more robust coming into it. We need to have more six-year-olds saying they want to be bankers or lawyers and doctors.

 

Megan Butler, Financial Conduct Authority

The really interesting thing is that the UK financial services industry is a hugely international business. [It’s not just] Brits coming into this industry, so why has it remained so male? I worry that it’s not just about developing a great pipeline of women from the UK into this system. There’s something else going on here – there’s a much bigger global culture.

 

Brenda Trenowden, 30% Club

Yes, culture is really important, as is perception. The 30% Club did a study recently called the Think Future Study. We surveyed 20,000 university students across the UK and looked at their aspirations. We found that financial services was the fourth career choice for men and it was the 12th for women. That stark contrast shows we have a massive perception issue, and I think it all comes back to culture. As we were discussing earlier, corporate culture has been very male-dominated and masculine. Shifting that to make it more inclusive really takes time and it takes quite a radical effort. It’s not a slow ‘let’s get one or two women in the executive committee and everything will change’. We need to focus on achieving balance and getting men and women to work together. Until we see better balance at the top, I don’t think the culture is going to change enough.

 

Robert Thesiger, The FISER Group

The working environment has to change. That’s the key and not just for women but for men as well. It has to become an accepted norm that a 16-year-old schoolgirl can see a career in financial services for the next 30 years and raise a family. Men have to accept that, actually, it’s not a bad thing being a stay-at-home dad if your wife or your partner is the major breadwinner. It’s a cultural issue, it has to start at a young age and it’s our responsibility. Educating the next generation today is the key.

 

READ MORE about the FN Women in Finance Briefing: Forging the path to diversity