Women in financial services: Time for the industry to move faster
- Only 4% of Chief Executive Officers (CEOs) and 13% of executive committee (ExCo) members of leading financial services firms globally are women. Over one third of leading financial institution ExCos are still entirely male
- Only 49% of men and 41% of women surveyed feel that their firms are doing enough to attract and retain female talent
- While 51% of women working in the sector believe that better gender balance in senior management positions should be a top priority, only 30% of men agree
LONDON, 4 December, 2014 – Oliver Wyman today published its inaugural report, Women in Financial Services, which finds that the industry needs to move faster to address the fact only 4% of CEOs and 13% of ExCo members were women at the world’s leading financial institutions in 2013. The industry has worked hard on gender balance, with many positive steps, but only by tackling its culture, unconscious biases and working practices will the sector be able to succeed in the war for talent.
The analysis considers the number of women on boards and ExCos at more than 150 major financial services companies globally. Female representation on boards has increased by two thirds over the last 10 years; 20% of board members are now women. However, female representation on ExCos remains much lower at 13% and is increasing more slowly. Progress in infrastructure, support and some control functions has been better, but only 11% of ExCo roles with profit and loss (P&L) responsibility, such as the head of a business unit, are held by women. 8% of Chief Financial Officers and 4% of Chief Risk Officers are women. These are the better paid ExCo positions and comprise the typical path to CEO.
“The financial services industry is losing out on retaining talent,” says Michelle Daisley, Partner, Oliver Wyman. “The lack of diversity – both gender and otherwise – in our industry is bad for business. Diversity improves decision-making, performance, sustainability, service and profits in the long-run. Firms with less diverse management teams are less able to see issues from many angles. This is especially important for a sector that has recently suffered scandals attributed to unchallenged leadership and ‘groupthink’. The pace of change is too slow.”
Gender imbalance in senior leadership is a challenge in many industries. However, Women in Financial Services finds that in the financial services industry women are only 45% as likely to progress from middle to senior levels of management relative to their male counterparts (US data) – lower than in other sectors. The report also finds that men and women working in financial services perceive the challenges for women and the importance of gender diversity differently. 52% of men believe that men and women have the same opportunities to be promoted in the same timeframe but only 41% of women agree.
The report finds that current working practices in financial services do not support female success. A culture of long hours and “face-time” disadvantages those who wish to work more flexibly to combine their home and work responsibilities. Women with potential are less likely than men to be sponsored and mentored by senior management and can struggle to find role models. Many financial firms have already invested significant time and energy in diversity initiatives, but there is a need to move further and faster. To succeed, diversity must move from a nice-to-have human resources project to a basic requirement for the leadership of financial institutions. The report outlines six approaches that can be taken help to address the imbalance:
- Fix the industry, not the women: Challenge conscious and unconscious biases and assumptions
- Focus on gender balance beyond the board: Support P&L experience early in women’s careers
- Adopt family-friendly practices – for all
- Support returnees to the industry
- Sponsor women from the top
- Monitor and measure progress… but with care
A copy of the report can be found www.oliverwyman.com/women-in-fs.html
About the report
Oliver Wyman has spent five years scrutinizing its own lack of gender diversity. We have launched ongoing initiatives to address it. During this process we have been helped by our clients and friends in the industry. This report is our attempt to return the favor. We have tried to move beyond individual experience and anecdote to explore the questions: What stops women getting to the top in financial firms? How can the industry improve?
To ensure we had qualitative and quantitative research for this report we analyzed the gender mix of senior staff at over 150 financial services firms internationally (including investment banks, retail banks, insurance companies and money managers). We interviewed over 60 senior women (and some men) from across the sector and surveyed over 1,000 current and potential financial services employees internationally during the third quarter of 2014.
In addition, the report includes individual articles on specific topics and markets:
- Women on boards: Token or totem?
- Risk culture: No silver bullet
- Picking the right battle: Lessons from the gender debate in motor insurance
- Mind the gender gap: Understanding women as consumers of investment services
- Spotlight on Sweden: Going from good to great
- Spotlight on Russia
- Spotlight on Canada: A web of support for gender diversity
- Racing ahead from the back of the pack: The Oliver Wyman story
For media contacts click here.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,700 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.