Let’s start with a statistic: in 2018 “in the top 20 global financial services firms, women accounted for 18% of executive committees, up from only 13% in 2014.” That is a representation of less than 1 in 5 and a increase of only 5% points in four years. Not only that, but statistics show that those who are in top positions are often paid far less; with some estimates putting their salaries at just 58% of their male counterparts.
So, why is this? Why are there so few women working in the finance industry and what are consequences for this chronic under representation of the half the world’s population?
Why are they under represented?
The reason why there is a persistent under representation of women in finance is complex and multi faceted. However, there are some key reasons that are seen to be instrumental time and time again in the perpetuation of this issue.
Firstly, “finance” and the “financial world” have traditionally been something of an “old boys club”. Indeed, it wasn’t until 2001 that Dame Clara Furse became the very first female Chief Executive of the London Stock Exchange. Bearing in mind that the LSE is one of the oldest Stock Exchanges in the world and can trace its roots back over 300 years. Because of this boys club mentality, women for a long time were discouraged for apply for roles that were seen to have inherently male characteristics, and lacked the proper connections to apply for higher-level jobs.
Lack of opportunity is also often interpreted – erroneously – as lack of interest. Because of this perceived historical lack of interest by women in the financial industry, this "boys club" culture has been allowed to perpetuate, and indeed, even permeate the way in which financial education is delivered to young women in schools. This is backed up by statistics showing that fewer girls than boys are receiving financial education during their school years, although it has to be said that this number is steadily improving.
Lack of education in such subjects at an early stage of course leads to inevitable elimination from associated career paths further down the line, especially when taking to account the British education system which requires students to narrow their field of study down to only three subjects as early as sixteen years old.
This perpetuates a vicious cycle, wherein the fewer women there are who receive the requisite education to work in finance, leads to fewer women in positions of power within that industry to serve as credible role models to young girls, meaning that the fewer girls seek or receive the requisite education they need to pursue a career in said industry.
Finally, it is no secret that the burden of childcare is often one that sits firmly on the woman’s shoulders in most family units, with recent findings by the ONS indicating that women in fact carry out over 60% more “unpaid work” than men. This results in women not only working longer hours in many cases, but also needing to be more flexible in the hours they work and the places in which they can access this work.
Flexible working and digital commuting are some of the more obvious solutions that companies can implement in order to facilitate more women in the workplace, but more significant social shifts towards equal sharing of childcare and unpaid work within family units is needed.
Consequences of under representation
It’s all well and good to want gender equality just for gender equality’s sake, however many experts also point out the economic detriment this inequality is having on national and global economies as a whole. In a Guardian interview Christine Lagarde, former head of the IMF and current President of the ECB, said, “some countries could boost their economies by as much as 35% by closing the gender gap in employment”.
She was referring to all industries, not only finance, but the implications are clear. Until women are fully represented – in every industry – and the inequality gap closes, there will be longstanding social and economic repercussions.