UK finance firms now have a higher proportion of women on their boards than their European counterparts, a rare boost for the City of London’s attempts to improve the industry’s diversity.
(Bloomberg) — UK finance firms now have a higher proportion of women on their boards than their European counterparts, a rare boost for the City of London’s attempts to improve the industry’s diversity.
Women made up 58% of new board appointments at the UK’s listed financial service firms over the last year, compared to an average of 50% at European companies, according to a report released by EY on Monday.
Currently 43% of UK finance board seats were filled by women, a five percentage point increase from June, when the research was first conducted. In Europe, female representation in financial boards stands at 42%.
“Ensuring that boardrooms reflect the diverse customers and societies they serve remains a work in progress, but the substantial increase in female representation in the past six months alone is particularly encouraging,” said Anna Anthony, EY’s UK financial services managing partner. “We expect to see boards ramp up their focus on age and cultural diversity over the coming months.”
Still, the boardroom shift is yet to be reflected in most areas of the City where the number of female money managers is little changed in the past few years and the gender pay gap isn’t expected to close for another 30 years.
Read More: Asset Managers Make ‘Appallingly Slow’ Progress on Gender Parity
Among UK financial firms, wealth and asset management had the most gender balanced boards with women making up 45% of directors. At banks it was 41% and insurance firms 43%.
“Over the last 12 years the UK has relied on predominantly a voluntary, business-led approach to gender reform,” said Pavita Cooper, vice chair of the 30% Club, a campaign to increase diversity at board and senior management levels. “This has been hugely successful strategy as the UK has leapfrogged countries such as Norway which imposes quotas on businesses.”
In contrast, mandatory quotas in Europe encourage a “one and done” mentality, where it’s common to replace female directors with men when their tenure is over, she said.
More Experience
The EY report also found that UK female board directors tend to be older and have more C-suite experience than their European counterparts.
They’re also likelier to fill the seat for a shorter time. The average board tenure for female directors at UK financial firms is 34 months, about 40% less than across Europe. This reflects the “recent accelerated recruitment of female directors in the UK,” the report said.
In comparison, UK male directors spend about 50 months on the job on average, over a year less than in Europe.
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