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Without targets, global finance will continue to fail women

David Craig
David Craig
Group Head of Data & Analytics for LSEG and CEO of Refinitiv

Among the thousands of people I’ve worked with, few have influenced my career as much as my first line manager. I was young(ish) and ambitious; eager to prove myself, but intimidated by the fearsome reputation of the management consultancy I worked for back then. Fortunately, while my manager’s standards were incredibly high, she gave us the space and security to strive without fear and showed us, through her humour and empathy, that it was okay to be ‘a human’ at work. Twenty years on, I still draw on her example.

You may have heard her name: she’s Jane Fraser, who last week took the helm at Citigroup and in the process shattered Wall Street’s glass ceiling by becoming the first female CEO of a major US bank (looking after $1.3 trillion in customer deposits).

There are more undiscovered leaders like Jane Fraser or Natwest’s Alison Rose out there, but how many will break through? Today, International Women’s Day, feels like a good time to ask the question.

In answering it, we analysed almost 1,400 financial services companies in Refinitiv’s ESG database: determining how far and how fast the sector, globally, has been progressing on gender equality. The results were not encouraging.

Snail’s pace

Based on 2019 data, we found that, on average:

  • Only 21% of board members at financial services companies were women
  • Just 15% of those in the broader executive pool were women
  • A massive 88% of companies had no targets to increase diversity.

With this disappointing lack of targets, it is not surprising that progress on diversity and inclusion has been so slow. Vivienne Artz OBE, our Chief Privacy Officer and until recently President of Women in Banking and Finance, says organisations first need reliable data on where they are, and then to set a clear target on where they need to be: “Only when companies hold themselves to public, transparent and accountable targets, will they generate the kind of internal pressure needed to really change the system”.

Targets on reducing the gender pay gap for example. Refinitiv research, out today, shows that a portfolio of companies in the FTSE All World index with no pay gap outperforming those with a pay gap by 58% since 2016. Investors take note.

Targets work

There is plenty of evidence to suggest that setting targets works. In the UK, in the five years since the government-backed Hampton-Alexander review highlighted the lack of women in boardrooms, the proportion of female directors on FTSE 100 boards has jumped by 50% and women now occupy one in every three board seats … a target set by Hampton-Alexander.

By contrast, progress globally is at a virtual standstill. Our data revealed that the proportion of women in executive positions at financial services companies inched up by just 2 percentage points between 2015 and 2019.

Having seen how targets drive change, we are committing ourselves to some. By the end of next year, 40% of LSEG’s broader leadership group will be female (up from 34% today), and in the coming weeks, we will set – and publicly disclose – targets in terms of our ethnic diversity.

Be inclusive. Think inclusive

These are important steps in us becoming a more inclusive company, but we’ll only get there with an inclusive mindset – one where everyone feels like they belong, regardless of background, gender, race, religion or sexual orientation. In a society redefined by Covid-19 and the calls for racial justice following George Floyd’s murder, this is business critical.

So, thank you to Jane and to every woman who has helped, inspired and guided me by showing your creativity, drive and humanity every day.

To all of you: have a brilliant International Women’s Day.

FTSE Russell data reveals that companies with more women on the board are outperforming, and the biggest businesses are leading the way:  #ChooseToChallenge #IWD2021