Getting a seat at the top (C suite) table.
The big question is whether Covid-19 will promote or hinder women’s chances to climb the career ladder? Lynn Strongin Dodds reports.
There is a great deal of debate and discussion as to how Covid-19 will usher in a new era for diversity & inclusion in financial services. On the one hand, the pandemic challenged the old myths about remote working and productivity but on the other, for many women, it meant the juggling of work and home life balance became even tougher especially when schools were closed. As a result, firms needed to break with tradition and develop new and modern career ladders.
This is reflected in a recent McKinsey article – Covid and Gender Equality – which showed that across the corporate spectrum, women’s jobs were 1.8 times more vulnerable during the coronavirus pandemic than their male counterparts. Although they account for 39% of global employment, they comprised 54% of overall job losses as of May 2020. At the same time, they shouldered more of the burden of unpaid health and childcare duties.
Even in the good times though, it is difficult for women to climb the upper echelons. They are still responsible for the majority of family commitments and in the cases when that is not true, there is a perception that they do and will not be able to give hundred percent to their jobs because of family commitments.
This partly explains why out of the 126 financial services firms polled in the Mercer survey last September – What does diversity and inclusion look like in financial services? – the overall representation of women at an average organisation was 47% across all functions and career levels. However, they comprise 58% of support staff and 21% of executives.
A closer look reveals that many of those senior roles tend to be in the non-profit generating roles of head of human resources, administration or legal. Albeit important, they rarely lead to a seat at the C-Suite table. There have been some notable exceptions, especially on the buyside, with five of the 11 newly appointed heads of asset managers over this past year being women. These include Legal & General Investment Management’s (LGIM) CEO, Michelle Scrimgeour; Suni Harford, who is to be president of UBS Asset Management and Hanneke Smits who will head BNY Mellon Investment Management in 2021.
The sellside club is much smaller. Jane Fraser may have made the headlines late last year as the first women to become CEO of US bank Citi, but analysis from S&P Global Market Intelligence shows in the US, just 32 public banks – representing 4.0% of the industry – have a female CEO. Only 14 of those have more than $1bn in assets, representing only 3.3% of the industry.
“The progress around gender diversity in the financial services C suite in general, and the investment management industry in particular, has been extremely slow,” says. Amanda Pullinger, CEO, 100 Women in Finance (100WF). “By and large, a major barrier for women accessing the most senior roles in financial services has tended to be the lack of visibility of female executives.”
She believes that the Covid-19 pandemic has changed that with the visibility of women executives increasing substantially, facilitated by the industry-wide adoption of remote working arrangements.
There is a danger though that in a post-Covid world, women and other people who chose to divide their working week between home and office could be left out of key decisions. “I think the hybrid model will become the new normal and this will be done in phases but there needs to be parity,” says Alexandra Foster, director of insurance, wealth management and financial services at BT. “Companies have to ensure that everyone is on the call or included in the important meetings and conversations whether they are in the office or not. This means making sure everyone has access to the right collaboration technology, information, tools, capabilities and communication networks.”
Deborah Challinor, partner, learning & organisation development at consultancy Sionic also believes that going forward, leaders in organisations should set an agenda, have the right infrastructure and share best practice. “There needs to be much more thought about what people need whether they are working at home or in the office and how motivation can be sustained,” she says. “For example, you can’t force people to come to meetings without a reason but you can show strong leadership and encourage all to attend to collaborate on new products, to extend networks as well as catch up on state of the nations.”
Andy Schmidt, global industry lead for banking for IT and business consulting firm CGI echoes these sentiments. He says that “C-suite and firm policies need to catch up to this new reality to provide teams the tools they need to collaborate more effectively, the schedule flexibility they need to allow employees (especially, and quite frequently women) to balance challenges like work and remote schooling, and the policies and management support employees need to stay connected to their co-workers.”
Greater flexibility though is only one part of the equation to help women to stay and progress up the ladder, according to Julia Streets, CEO and founder of Streets Consulting as well as creator of DiverCity Podcast. She believes “another consideration is for companies to develop an internal, robust pipeline of women that can be supported, developed and progressed throughout their careers. This could range from creating shadow boards to training and development. In some organisations, women are encouraged to take Board trustee roles at a non-profit organisation to prepare for the corporate boardroom.”
Levelling the playing field
Financial service firms also need to place greater emphasis on developing sponsorship and mentoring programme with senior executives. As the Mercer report notes they have the potential to level the playing field between men and women in recognising high-potential talent – those who have the ability, commitment and motivation to advance to a more senior position in an organisation. Globally, only 35% of organisations have so called high-potential programmes for women.
While these initiatives can and will be done virtually, the learning experience garnered from office life should also not be underestimated whether it is a formal meeting with a manager or a snippet of conversation in the hallways. Keisha Bell, managing director and head of diverse talent management and advancement at DTCC notes that despite numerous challenges created by the pandemic, the experience demonstrated the industry can successfully work in a more virtual setting.
However, she adds, “While many organisations are exploring flexible work arrangements for the future, there is also a strong recognition that the office will continue to play a critical role to support collaboration, networking and mentorship as well as to preserve the company’s culture and drive engagement. We believe this approach will benefit all employees, create new opportunities for growth and advancement and enable companies to more effectively source talent of diverse backgrounds and experiences.”
Although there are several initiatives percolating within buy and sellside firms, there are also the external ones that will have a reverberating consequence. This is particularly the case with the recent proposal by Nasdaq to the Securities and Exchange Commission (SEC), according to Anita Karppi, chief marketing officer and executive team member Plato Partnership and managing director of K&KGC.
The US exchange adopted a new requirement for its 3,249 listed companies to have at least one woman and one “diverse” director and report data on board diversity. If they do not meet the criteria, they will have to publicly explain why. Over the past six months, Nasdaq found that more than 75% of these companies did not meet its proposed diversity requirements.
“This is a game changer by Nasdaq to change the dynamic of boards,” says Karppi. “I look forward to these types of proposals to come into Europe and to also be mandated for the C-suite.”
©Markets Media Europe 2021