Written by: Laura Ahto | CEO, The Bank of New York Mellon SA/NV
I am hugely looking forward to attending Financial News’ 10th annual FN100 Most Influential Women in European Finance dinner in London this evening. It will be a night of celebration as we recognize the progress our industry has seen over the last decade on gender diversity. But also a reflection as despite the corporate and political rhetoric, alongside the proven business case for diversity, we still have a long way to go.
I read an interesting report in July 2016 from European Women on Boards (EWoB) which investigated gender diversity of European boardrooms. It stated the percentage of women on the boards of the largest 600 European listed companies has increased from an average of 13.9% to 25% in five years. This is great, but just 25%? It needs to be 50% – an even balance of both genders. So how can we achieve this?
Diversity needs to extend far beyond the enforced quotas seen for boardrooms in locations like Belgium, Germany, and Norway. In banking and financial services, the talent pool can be limited and historically has not attracted women and people from diverse backgrounds in significant numbers. Clearly, there is a need for change, action, activism and continued advocacy.
There is a much bigger issue at play here though than forcing companies to adhere to gender quotas. When speaking to recruitment consultants about senior positions we are seeking to fill and insisting on seeing a diverse range of candidates, there is one common theme emerging across all European states. There simply aren’t enough women in the financial services industry to be considered for these top positions.
This is the issue which concerns me most; particularly when we think about the increasing importance of good corporate governance and risk management in banking. Risk, of course, as a topic lends itself to the diversity debate as it is widely recognized that men and women approach business differently.
Single-sex management boards are unlikely to have particularly varied opinions which can accidentally lead to ‘groupthink’, with opinions left unchallenged. Whereas gender collaboration can lead to more informed decisions and astute risk management.
The good news is many European companies continue to sharpen their focus on developing their executive leadership pipeline for women, independent of governmental legislation. They are setting targets and implementing measurement frameworks to monitor and report on progress.
That being said, I think the opportunity and need is greater than this. We need to create a deep pool of diverse talent from graduates to the top. Not just executive leadership pipelines. Change must start within the education system; with young women shown what a great career they could have in financial services. With financial institutions following this with a diverse recruitment philosophy at entry level, complemented by supportive policies that allow all their best talent to thrive.
Europe’s number one priority, as clearly outlined in the European Commission’s ‘Europe 2020’ strategy, is seeing a return to smart, sustainable and inclusive economic growth. If Europe is to achieve this, businesses need to tap wider diverse talent pools. And with the rise of technology and ‘cooler’ sectors, financial institutions in particular need to fight harder to attract the brightest minds. Attracting and retaining talent from 100% of the workforce – as opposed to just 50%.
It’s the only way our industry and European business in general, will be successful.