Diversity has been a topic on the agenda within financial services for some time but with transparency created through Gender Pay Gap reporting and a greater call for women in leadership, the issue has never been more relevant than it is today. That’s why AJ & Partners has carried out a survey on gender diversity amongst CFOs within small and medium-sized banks in the UK. Seventy-five CFOs took part in the research, with the average business size ranging between 40 and 500 employees, with annual turnover between £2 and 22 billion. All banks are privately held.
Key findings about women in finance:
- Women in finance still lag behind the men where only 12% of survey respondents were female
- Base salaries across all CFOs ranged between £120,000 and £250,000
- To enable opportunities for women in finance, there needs to be further action taken to encourage gender diversity within small and medium-sized banks
Women in finance: the realities
Our survey of 75 banks revealed that only 12% of CFOs are female and are designated as a Senior Managers Function (SMF) 2. While there has been a greater call for gender diversity in the larger banks, there is a clear need for smaller firms to take an active approach to review diversity within the wider executive team.
The Women in Finance Charter has been introduced as a government-led initiative to encourage financial services firms to sign-on and promote gender diversity. The charter states, a balanced workforce is good for customers, profitability, and workplace culture.
Nicky Morgan MP, who sits on the Treasury Select Committee is leading the drive on firms to sign up to the charter.
The Women in Finance Charter was first published in March 2016 and commits firms to support the progression of women into senior roles; to publicly report on progress on delivering internal diversity targets; and to commit to at least one member of the executive team to be responsible and accountable for gender diversity and inclusion.
CFO salary range
Our findings did not find any major disparity in CFO compensation based on the gender. The general range of a base salary for a CFO in this segment of banking is between £120,000 and £250,000. Base salary formed the largest part of total CFO remuneration.
The salaries on offer at the lower end of this scale were with banks that have a Branch operation in the UK but is not a full subsidiary. These banks would have, on average, between 25 and 50 employees. The median base salary for CFOs in this segment is £142,000.
The higher end of the compensation scale would include banks that are full UK subsidiaries with up to 500 employees. The median base salary for CFOs in this segment is £226,000.
Women in finance: a summary of findings
Our research has revealed that there is a need for small and medium-sized financial services firms to look at gender diversity in the overall executive team. This research focused on one function, the CFO, however other mandates that we have executed demonstrates that there continues to exist a large disparity of females to males in the top jobs within financial services.
Attraction, hiring and retention programmes within firms should be considered. While we would always advocate for the best person for the role, consideration needs to be taken to the benefits of a diverse team. As vacancies arise, firms should continue to look for the very best candidate in their hiring practices, whilst considering what workforce planning initiatives could coincide to increase the number of women in finance within the top rungs.
Another approach could include a soft skills audit of the executive team, looking at those areas that are lacking and resulting in a more bespoke approach to hiring. As individuals bring different strengths, this can have a positive impact on an organisation’s performance plus will ensure that the wider leadership team has a more complete and holistic skill set to provide a diverse, strategic and insightful direction to the firm.
Return to work schemes for women or men who take a break to raise a family and wish to return should be fair and seamless. Comprehensive benefits schemes that provide flexible working and flexible benefits (where an individual can use a cash equivalent towards the cost of childcare) would help offset the challenges of both raising a family and pursuing a career. As employees each have different priorities, a flexible approach offers each employee an allowance to ‘purchase’ benefits from a selection or take the cash equivalent.
Unconscious bias is an additional consideration. In our experience, businesses want to embrace a fair playing field where everyone regardless of gender, race, religion or sexuality, is equally considered for opportunities. Unfortunately, hiring in one’s mirror image continues to be a prevalent, even if not a deliberate, action. Firms need to take steps to reduce opportunities for unconscious bias within hiring.
Following last year’s initial publishing of the Gender Pay Gap, firms will again be required to publish their figures, demonstrating if they have made any progress in closing the gap. The issue overall is not about pay inequality as generally, men and women are being paid the same for doing the same role, especially in professional occupations. The real issue is about the apparent pyramid within firms – there are more women at the bottom and fewer at the top. To help close the gap, we need to get more women developing their skills throughout their careers and moving into leadership roles where pay is generally higher, thereby closing the gap between the average male to female salaries within the firm.
In summary, there is an increased awareness and willingness for firms to close the gap in gender inequality. This is a positive step and one which over time should result in marked improvements within the industry.