UK banks increase number of female board members

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Women are under-represented at board-level but UK banking is seeing positive change, new research has found.

Banks in the UK are outperforming their counterparts in the US and in mainland Europe when it comes to the proportion of women who are board members.

In the UK the proportion of women employed on the boards of banks has risen 9% since 2015, compared with a 2% increase in Europe and 37% of board members are now women, in contrast to 33% in the US and 35% in other parts of Europe.

Research into gender diversity among the world’s 50 largest banks by recruitment consultancy New Street Group found that back in 2015 the percentage of women on UK bank boards was languishing at 28%, trailing behind European banks, whose boards included 33% women.

While banks in every region covered by the research have improved, the UK has seen the biggest increase in female representation on the boards of banks over the last five years.

Andrew McIntee, managing director at New Street Group, said: “Banks know that gender balance isn’t just a public relations objective, it’s part of finding a competitive advantage.

“A growing body of evidence suggests that a better gender balance on the board can lead to greater diversity of ideas, better and more informed decision-making, and increased board effectiveness which ultimately leads to better performance.”

The study suggested that the improvements in representation of women at board level were a result of UK banks more actively embedding diversity and inclusion into their hiring and retention practices and broader workplace culture.

This, the firm stated, included an increased understanding that simply hiring more women into senior roles was only part of the solution. The barriers within banks that have prevented women progressing into senior leadership roles in the past – such as taking maternity leave and returning to work – were being tackled through inclusion programmes.

There had also been greater use of flexible working and proactive pipelining of female talent into key roles.

Further recent research by New Street Group has shown that during the coronavirus pandemic, FTSE 350 businesses with the most gender-diverse boards saw their share prices withstand the economic disruption more favourably than comparable businesses with less gender-diverse boards.

Although no UK bank has yet reached the threshold of 50% of its board comprising of women, RBS was very close to achieving this with six women among its 13 board members. The RBS board includes the group’s CEO Alison Rose, who became the first female chief executive of a major UK bank in November 2019. RBS also has a female chief financial officer.

Adds Andrew McIntee: “In UK banks, there is now a real understanding that a shortlist of all male candidates for a senior role is one that may have ignored 50% of the talent pool.”

The study also showed that, its authors claimed, investment banks had begun to shed their heavily male image, with the percentage of women on the boards of global investment banks having risen from 25% in 2015 to 31% in 2020.

Among investment banks, US multinational Citi had the highest proportion of women on its board at 44%, followed by Lazards at 36%.

Says Andrew McIntee: “Some investment banks have had a reputation for being an ‘all-boys club’ at board level but there has been real progress on that front in recent years. More women have moved into senior roles in investment banking, both as executives and non-execs.”

Australia was found to be the world leader in bank board gender diversity with 44% female representation on boards and the Commonwealth Bank of Australia was on the only bank in the research that had a female majority on the board with five out of nine being women.