Senior women remain a rarity in capital markets

IFR 2276 23 March to 29 March 2019
9 min read
EMEA
Alice Gledhill

UK and international banks have signed up in droves to the UK government’s Women in Finance Charter, but despite a raft of measures to foster greater female leadership, gender parity is still a long way from becoming a reality within capital markets.

JP Morgan, Societe Generale and ABN AMRO are among the latest institutions to sign up to the charter, launched in March 2016 by HM Treasury, which commits financial firms to supporting the progression of women into senior roles.

Its proponents argue that greater female representation improves business results, enhances workplace culture and drives fairness. A lack of female representation may also be starting to affect banks’ most precious commodity – fees – with at least one corporate client said to have dismissed a pitch team it deemed insufficiently diverse.

But none of the 15 major banks surveyed by IFR – all signatories to the charter – were willing to provide a breakdown of the number of senior women working within their European capital markets businesses.

But even without hard evidence, it is clear to anyone familiar with the sector that women remain vastly outnumbered compared with other areas of banking.

Global/investment banking has the lowest average level of senior female representation of the nine categories of signatories to the charter, 25% for 2018, according to the latest annual review published on March 14 by think-tank New Financial. That is less than half the building society/credit union sector, which led the pack with 53%.

“Women are still clearly a very small minority within capital markets, especially at a senior level,” said Kate Grussing, managing director at Sapphire Partners, an executive search firm promoting diversity.

MIND THE GAP

Banks tend to set diversity goals at the group or regional level. The charter allows signatories to dictate their own targets – and determine their own definition of “senior”.

Lloyds is among the most ambitious in its aim to increase the proportion of senior management roles held by women to 40% by 2020, from above 35% currently.

Others are considerably less bold: Citigroup’s initial goal is 30% in EMEA by 2025, from 21% in 2018, while Societe Generale hopes to grow the number by at least three percentage points across its UK platform to reach a minimum of 25% by 2022. Some institutions are even less ambitious: Mizuho Bank aimed for 5%–10% by 2021, and has already reached its target.

Male dominance at management level is laid bare by the gender pay gap. Some 80% of UBS’s top quartile earners in the UK are men, for example, not out of step with the rest of the industry.

“The Women in Finance Charter is a good catalyst, but it’s easy to sign up although more difficult to make progress,” said Grussing.

VICIOUS CIRCLE

One cause for the imbalance appears to be recruitment: women have simply been less likely to consider a career in capital markets and wider investment banking, an issue highlighted by Barclays in its latest Gender Pay Gap Report.

“In our corporate and investment bank, where there are a greater number of more senior roles, we have historically attracted more men and it has been challenging to find and attract female applicants,” it said.

That has created a vicious circle whereby the lack of senior women in itself acts as a deterrent to recent graduates, rendering progress painfully slow.

“There aren’t that many female role models, so when you’re looking at a career in capital markets, that must then beg the question: is there a path for me, and what sacrifices do I have to make?” said Allegra Berman, global co-head of HSBC’s securities services business. She has previously held numerous senior roles across capital markets.

There are also questions about the seriousness of the financial industry’s commitment to gender parity.

New Financial’s review said that firms must be prepared to take a more “radical approach” instead of “tinkering at the edges of legacy policies”.

Few of the signatories gave evidence of the impact of their actions or how effectiveness is being quantified, the review said. Nearly half missed the latest deadline to report publicly on their progress, which is required by the charter.

HELD TO ACCOUNT

Still, there is some movement. Banks have made a push to improve the diversity of teams visiting universities, which is bearing some fruit.

Bank of America Merrill Lynch, for example, has increased its intake of female graduates to its global banking and markets business in EMEA from 32% in 2013 to 42% in 2017.

At a more senior level, banks are insisting that recruitment firms deliver shortlists displaying a better balance of candidates. Indeed, New Financial’s review found that 15 out of 18 signatories in global/investment banking had increased the proportion of women in senior roles.

There is growing evidence too of clients holding their banks to account.

“At the start of my career there were very few women, but it has definitely got better,” said Charlotte Weir, head of corporate debt capital markets for EMEA at Barclays, where she has worked for 19 years.

“Things are changing on the client side too; the diversity in treasury and finance teams is improving and they are increasingly asking us about our diversity statistics.”

“NOT QUITE READY”

There has also been a proliferation of formal career development initiatives to stem the losses of female employees further up the ranks, which goes some way towards refuting the recurrent accusation that the banks merely pay lip service to gender equality.

HSBC, for example, has several programmes dedicated to helping women move into senior roles with a particular emphasis on networking and fortifying the soft skills that will serve them best in a traditionally male environment.

The hope is that similar schemes across the industry will combat a frequently heard refrain on promotion panels in relation to female candidates: “They’re not quite ready” or “they need another year”.

Simone Wegscheider, head of HSBC’s corporate debt capital markets in Germany, is a participant in the bank’s Accelerating Female Leaders programme and was promoted to managing director this month. Some 34% of the bank’s 83 newly promoted MDs are female, up 13 percentage points on 2018.

“Hearing the stories of super-successful women and realising they are normal, and at times vulnerable but have confidence in their capabilities, was inspiring,” she said.

“On reflection, my success is based on hard work and luck – being in the right place at the right time – but also knowing what I’m good at and getting what I want by being persistent and clear.”

TALKIN’ ’BOUT MY GENERATION

There has also been a wave of initiatives rolled out in recent years to ease the return to work after career breaks.

JP Morgan this month launched its latest round of ReEntry, a 14-week programme that caters to individuals who have taken a voluntary career break of at least two years. This year includes the first placements into trading and banking.

This type of scheme is of particular benefit to women who take time out to have children. But they are generally open to all, reflecting the evolution in what younger generations of both men and women want from their careers – often very different to the outgoing old guard.

A recent Women’s Network Forum report said that many themes historically seen as “women’s issues” are now also issues for attracting and retaining men.

Parental leave, corporate returners and flexible working were among the chief concerns raised by both female and male participants aged 16–35, according to the report.

The problem facing capital markets is the extent to which it can accommodate this growing desire for flexible working. It may prove easier said than done, particularly in client-facing roles that tend to require long hours and last-minute travel.

“Women don’t necessarily want different things from men; it’s a generational difference,” said HSBC’s Berman. “Banking will have to change; otherwise it won’t attract the talent.”

A 'No Entry' sign stands in front of the headquarters of the European Central Bank in Frankfurt