Why do so few women reach the top ranks of financial services?

It’s not that women don’t go into financial services. They do, and they are well represented across the general population within the industry. But somewhere along the line something happens that stops them from getting the top jobs.

We’re not talking small numbers here. According to the Central Bank, 84 per cent of the most senior roles in the sector were held by men as of December 2021.

In part, this may be because some organisations don’t foster an inclusive culture where all employees feel equal and confident about seeking promotion. Also contributing to the problem is that fewer women apply for senior roles. The Central Bank’s analysis shows that only 31 per cent of applicants for pre-approval controlled function roles within regulated firms were female, and only 28 per cent of applicants for board seats were women.

Fostering and harnessing the talent of women will ensure firms have access to a strong pipeline of talent

Overall, female representation in management-level applications increased by a marginal amount to 35 per cent in 2022, with women more likely to apply for what the bank calls “second-line-of-defence roles” such as head of compliance or head of anti-money laundering. An interesting twist is that existing regulated firms show higher levels of gender diversity than new companies looking for authorisation.

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Aware that its own gender balance must also bear scrutiny, the bank’s deputy governor, Derville Rowland, says the organisation fully supports the promotion of women. “As a public sector body, we need to be representative of society in Ireland. That is why we place diversity and inclusion at the heart of our mission, vision, strategy, culture and values,” she says.

“It wasn’t always that way, of course, and it wasn’t until 2001 that the Central Bank appointed its first female head of division ... We have made substantial progress since then, [and] today women make up 49 per cent of our total workforce, 40 per cent of our board [the Central Bank Commission], and almost 40 per cent of our leadership group.”

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Ireland is not alone in having an unsatisfactory gender balance at a senior level. Statistics from the EU show that while 60 per cent of current university graduates are female, they remain significantly under-represented in high-level management positions and on corporate boards.

Across the EU, only a third of members of non-executive corporate boards are women and this is even lower on executive boards. Unhappy with the rate of progress to improve these numbers, the EU has decided that listed companies in member states need to accelerate the pace at which they’re achieving gender balance, and has launched a directive to speed things up.

Key elements of the directive include clear and transparent board appointment procedures, while “at least 40 per cent of the under-represented gender must be represented in non-executive boards of listed companies or 33 per cent among all directors.”

Where two candidates of different sexes are equally qualified, preference must be given to the candidate of the under-represented sex in companies where the target for gender balance is not being achieved.

Talent has no gender, and women’s leadership skills and vision matter. Yet entrenched selection patterns of corporate board members continue to largely overlook female candidates

—  EU equality commissioner Helena Dalli

Companies must also disclose their qualification criteria should the unsuccessful candidate request it and must make a firm commitment to reaching gender balance among their executive directors. If they don’t, penalties (decided on by individual countries) will apply. Member states are also being encouraged to publish information about companies reaching the targets, to exert peer pressure on those lagging behind.

Commenting on the directive, EU equality commissioner Helena Dalli said: “Talent has no gender, and women’s leadership skills and vision matter. Yet, entrenched selection patterns of corporate board members continue to largely overlook women candidates.”

Closer to home, Patricia Callan, director of the Ibec group representing the financial services sector here, acknowledges that although “financial organisations are committed to achieving diversity and gender balance targets, more needs to be done. Fundamentally it makes good business sense, as fostering and harnessing the talent of women will ensure firms have access to a strong pipeline of talent.”

Callan adds that Financial Services Ireland has set up a number of programmes to help firms increase female representation. These include Advancing Women in Leadership and Take the Lead, which is run in conjunction with the Irish Management Institute (IMI).

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Also designed to get more young women to consider a career in financial services is the Earn & Learn apprenticeship for the insurance industry run jointly by the Insurance Institute, the Life Insurance Association and ATU Sligo (Atlantic Technological University). The programme is not exclusively aimed at women, but since it was established in 2016, it has been very successful in attracting female candidates, who now outnumber males in terms of combined graduate numbers.

Earn & Learn allows participants to get on-the-job experience while earning a salary and studying remotely for a third-level qualification (BA in insurance practice) over a three-year period. The apprenticeship is government subsidised (candidates only pay €600 a year in registration fees) and entry is not confined to school leavers. Anyone who meets the entry criteria, including career changers and older learners, can apply.

“We are incredibly proud of the continuing growth of the programme, which signifies a broader societal shift in terms of the realisation of the value of apprenticeships and the immense opportunities they present. The benefits of being able to immediately put what they are learning into practice while studying cannot be overstated,” says Dermot Murray, chief executive of the Insurance Institute, who adds that applications are now open for the 2023 session, which starts in September.