The new government Charter -a commitment by HM Treasury and signatory firms to work together to build a more balanced industry- is designed to improve gender diversity in senior positions within the sector, and links City bonuses to the appointment of senior women.
The list of signatories include the FCA, Aberdeen Asset Management, BlackRock, Columbia Threadneedle Investments, Fidelity International UK, Henderson, Hermes, Schroders and Standard Life. More than 15 insurance firms have signed up, including the two largest insurance companies in the UK; Prudential and Aviva.
“A balanced workforce is good for business – it is good for customers, for profitability and workplace culture, and is increasingly attractive for investors,” said a statement issued by HM Treasury and Harriet Baldwin MP.
The Charter asks financial services firms to commit to implement four key industry actions: having one member of the senior executive team who is responsible and accountable for gender diversity and inclusion; setting internal targets for gender diversity in its senior management; publishing progress annually against these targets in reports on their websites; and having an intention to ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity.
“It is encouraging that so many firms have signed up to the Charter and have made a public commitment to improve gender diversity in the financial sector,” commented Jon Terry, PwC's financial services people leader.
But signing the charter is only the first step said Terry, and to comply many firms need to change. “Linking targets to pay is particularly challenging as gender targets are, by their nature, likely to be long term, while the majority of pay decisions are made annually. Firms will need to find a robust and transparent way of aligning these two timescales,” he added.
According to Terry the targets will only be achieved if diversity is central to all aspects of a business, including recruitment, pay, talent identification and access to training and opportunities. “Without this wider focus, it will be challenging to deliver sustainable change in this area,” he said.
HM Treasury will update the list in October to include links to signatories’ targets as published on their websites. "Following this initial disclosure of targets, firms will need to report progress against these targets in October 2017. By the end of 2017 an annual review will be published assessing how signatory firms have progressed in delivering against their internal targets for gender diversity," said Terry.
Peter Harrison, group chief executive of Schroders, commented: “Diversity of thought is critical to success in modern business. At Schroders we’re going a step beyond simply saying that it is important. Signing the Women in Finance charter is one action that enables us to continue to develop a more diverse organisation."