Europe’s Major Banks look to address the Gender Diversity Issue

As proud members of the HM Treasury Women In Finance Charter, it was pleasing this week to read that nearly all of Europe’s major banks are now linking executive pay to diversity and inclusion targets.

The HM Treasury Women In Finance Charter, launched by the UK government in 2016 commits firms to support the progression of women into senior roles in the financial services sector by focusing on the executive pipeline and the mid-tier management level. Members are required to annually report progress and set internal targets to support the transparency and accountability needed to facilitate change. The HM Treasury Women In Finance Charter has now been signed by more than 400 banks and financial services firms, including many of Europe’s largest lenders.

Of the 13 European lenders categorized as global systemically important banks, or G-SIBs, 11 confirmed to Standard & Poors Global Market Intelligence that they have incorporated diversity and inclusion metrics into executive pay decisions.
Banco Santander SA, from Spain, now measures part of the executive directors’ renumeration against progress towards a number of targets for responsible banking including a goal to increase female representation in leadership positions to 30% and reduce the gender pay gap to zero by 2025. UK based Barclays PLC has similar measures for the improvement of inclusion scores in staff surveys alongside a 28% female leadership target by the end of this year.
Also a recent PwC report found that 45% of the U.K.’s 100 largest companies now include Environmental, Social and Corporate Governance (ESG) targets in decisions around executive bonuses, long-term incentive plans, or both, and that 28% use metrics relating to “newer” ESG topics such as climate change, employee inclusion and diversity; with the latter most commonly appear within the Finance Sector.
The HM Treasury Women In Finance Charter along with strong interest from financial regulators in diversity and inclusion, has been one of the key drivers for banks adopting such measures, according to PwC.

Although the level of female representation in senior management level positions among the HM Treasury Women In Finance Charter increased to 32% in 2020 from 31% the year before shows that the financial services industry is ‘moving in the right direction’, however over half of the charters signatories with a 2020 deadline missed their targets. The Charter has also started to collect data from its signatories on additional diversity strands, including ethnicity, sexual orientations, socio-economic backgrounds and disability; although it is early days the fact that businesses are now exploring intersectionality data can only be of benefit in delivering a more diverse and inclusive workplace in the future.

Tracy Fletcher, Managing Director of Campbell & Fletcher Recruitment

We know that a balanced workforce is great for business, it improves profitability and workplace culture. We are proud to have delivered against our own internal targets, and are working with a number of UK finance and banking companies on helping them meet their diversity & inclusivity challenges.