The ‘Women in Finance Charter’, officially launched in 2016, asks financial services firms to commit to implement four key industry actions:
- to have a named senior executive responsible and accountable for gender diversity and inclusion;
- to set internal targets for gender diversity in senior management positions;
- to publish progress annually and
- ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity.
Why does it matter?
There is a financial imperative for change. A much publicised report from McKinsey suggests that closing the Gender Pay Gap will add up to £150 billion to UK GDP by 2025 and introduce 840,000 more women to the workforce.
However, closing the pay gap is about much more than money. It leads to a more diverse and inclusive workforce, broadens the skill base, increases creativity and innovation and can reduce staff turnover.
How successful has the Charter been?
For these myriad reasons, not simply because it’s the right thing to do, AAT became the first professional accountancy body to sign the Women in Finance Charter back in 2016.
Another accountancy body recently signed up to the Charter but the others, for various reasons, have not yet done so. In fact, securing signatories has been a slow process, with the intervention of the Chair of the Treasury Select Committee, Nicky Morgan MP, required to shame some major financial institutions into signing the Charter last year.
After three years, there are now just over 300 firms, from a potential 90,000, who have signed up.
Government will focus on the 650,000 employees covered by these 300 firms but a further 500,000 employees in the financial services sector remain completely untouched.
It must surely be legitimate to ask about the 30 million UK employees who do not work in the financial services sector and how gender diversity is being encouraged at the firms they work for.
Looking at this bigger picture, AAT suggests that the Women in Finance Charter be widened in scope and renamed the “Women in Business Charter”.
This would open it up to cover all sectors, from Government departments, local authorities and charities, to all listed companies and the five million SMEs that are driving the British economy.
This could enable large numbers of businesses, large and small, to improve their awareness and understanding of what needs to be done and to make necessary changes.
Of course, this won’t happen without political support, but this already appears to exist.
An AAT commissioned survey of Members of Parliament last month found that most MPs (54%) would support widening out the existing Charter to all businesses and to rename it the “Women in Business Charter.”
Only 15% of MPs said they do not support such a change, while 9% don’t know either way.
It is pleasing that most MPs support such a change and we look forward to working them to try and achieve this in 2019.
Find out more and sign up to the Women in Finance Charter.
Find out more about AAT’s commitments under the Women in Finance Charter
Phil Hall is AAT's Head of Public Affairs and Public Policy.