Banks are starting to take the gender pay gap seriously – but shaking off old biases will take time and requires commitment from the top.
Gender has become a priority subject matter within banks' boardrooms the world over. Research shows how diversity leads to higher financial performance and shareholders are questioning companies that do not take women’s presence (or lack of it) in leadership roles seriously. Are banks feeling the pressure, and are they doing enough? Yes, and not yet.
In the UK, the government’s gender pay data has shone an awfully bright light on the financial services sector, where on a mean hourly basis women are paid 78 pence for every £1 a man makes – or, worse, less than 50 pence in a number of investment banks. Women are seldom seen in the higher paying jobs.
Initiatives to correct this imbalance are growing – from the 30% Club, which is demanding that percentage of women on banks' boards, to the business-led Hampton-Alexander review and its increasingly ambitious targets, to the government's Women in Finance charter, inviting firms to sign up, set up gender goals and report on their progress.
In the UK, on a mean hourly basis women are paid 78 pence for every £1 a man makes
But old habits die hard. Valuing individuals’ performances still requires personal judgement and is, therefore, exposed to bias. Luckily, correcting the environment in which human prejudice operates is easier. Most banks say their interview process and job ads are being revised to include women on hiring committees and increase the pool of potential candidates (experts say simply jettisoning terms such as 'industry leader' in job descriptions results in significantly higher numbers of female applicants). Mentoring programmes abound and analysis tools to show the gender distortion of managers’ bonus allocations are now available.
To truly make a difference, these initiatives need to permeate banks’ fibre; they need to be accepted as valid and necessary across the organisation. They need to come from the very top, and the very top needs to be held accountable for missed targets. Jayne-Anne Gadhia at Virgin Money and António Horta-Osorio at Lloyds are good examples of banking leaders taking the matter seriously.
So is Clare Woodman, Morgan Stanley’s new Europe, Middle East and Africa head – the first woman to lead a major investment bank in the City of London – who has brought new energy to the fight: she told The Banker she will treat gender balance “as a top priority”. Correcting decades of working practices that have impaired women’s ability to move up through the corporate ranks is not an easy task, nor one for the impatient. But it most certainly needs to be one for the CEO.
