Workforce diversity in the financial services sector isn’t a “nice to have”, it’s a national imperative.
Ireland for Finance, the Government’s blueprint for the development of the international financial services sector to 2025, lays it out in black and white.
Overriding all other developments required to develop Ireland into a global financial hub “must be a commitment to ensuring that the culture of our international financial services sector in Ireland is strong, that Ireland is recognised as a diverse, people-friendly place in which to work and live”, it says.
Indeed, a “key priority will be the push for greater diversity of talent in the sector. This goes beyond the number of women in the workplace or in leadership; it will also seek to improve diversity of age, ethnicity, sexual orientation, education, background, nationality, disability, beliefs and more.”
Workforce diversity is important for financial services teams, it points out, because it can improve the quality of decision-making, reduce group-think, and allow assumptions to be challenged more effectively.
It’s a theme Central Bank director general Derville Rowland has addressed, including in a speech delivered just before the pandemic hit.
The Central Bank had been providing updates on the levels of diversity of senior appointments of regulated firms for three years by that stage, she pointed out.
It found an overall improvement in the number of female applications, at 24 per cent, up from 22 per cent the previous year. Good news, she said, but there remained “a pronounced gender imbalance at board level and in revenue-generating roles”.
Research from the International Monetary Fund has shown that if women’s employment equalled that of men then economies would be more resilient and economic growth would be higher.
The Central Bank, she said, wants to see improvements in diversity of experience, thought, background and attributes at senior level. It also expects regulated firms to show more ambition, including in targets and measures, pay more than lip service to diversity programmes, build better pipelines of talent, and identify and reduce barriers to change.
She said it is in all our interests given that the Central Bank’s report into the Behaviour and Culture of the Irish Retail Banking Sector following the financial crisis found that retail banks had “much more work to do” in terms of ensuring their organisations were sufficiently diverse and inclusive, particularly at senior level, in order “to prevent group-think, guard against over-confidence, and promote internal challenge”.
It is, says Mary O’Dea, chief executive of the IOB, “very heartening” to note the increasing numbers of female leaders of fund management companies.
“Having said that, the industry has some way to go, as noted in the Central Bank of Ireland’s ‘Dear CEO’ letter following the thematic review of fund management companies, governance, management and effectiveness, issued last October. The Central Bank observed that there is a significant gender imbalance on the boards of fund management companies,” says O’Dea.
The IOB is developing a Women in Leadership programme, in collaboration with WomanUp, which she expects will be available by Q2 of this year. “Its aim is to support women in financial services by providing the technical skills, soft skills and coaching to support women in advancing their careers,” she says.
Some financial services sectors are progressing faster than others.
“The investment management and funds side in Ireland has come on hugely,” says Eve Finn, managing director of Legal and General Investment Managers (LGIM).
She says very many of the newer firms in the sector have women at managing director, chief executive and country head level. “Of the newer firms in the funds and asset management sector, well over 50 per cent of them have female chief executives.”
As a result there is now a strong and growing network of female leaders in Ireland providing role models for women coming up through the ranks behind them. The advent of initiatives such as Bloomberg’s Gender Equality Index, which tracks the performance of public companies, helps too, she says.
LGIM, which is currently on a recruitment drive, works hard to attract applications from people with a variety of skills, experience, qualifications, socio economic backgrounds and neuro-diversities, and with good reason, she says.
“For example, last year we had a very difficult year with Covid and volatile markets. When something is very challenging you need lots of perspectives around the table to deal with it,” says Finn.
Organisations like the 30% Club and Women in Finance have helped move the dial on gender equality in financial services, as has Irish Funds, the sector’s trade association which actively encourages women on to its working groups, experience that helps upskill them and raises both confidence and profile, says Tara Doyle, partner and head of the asset management and investment funds department at Matheson, a law firm.
As well as being a former chair of Irish Funds, Doyle sits on Matheson’s diversity and inclusion steering committee. In her two decades in the sector she has seen significant change.
“When I first joined, in common with a lot of Irish business circles, the funds industry was quite male-dominated. But it always offered opportunities to progress quickly, and has always been a huge growth area – any sector with both of those attributes tends to see diversity come through.”
She says improvements in diversity generally has been driven too “by the open mindedness of the people and the international and global focus of the sector. It has created an environment where people come through regardless of gender.”
The biggest beneficiary is the industry itself - and by extension the economy.
“If you only have one gender you only have access to 50 per cent of the talent pool,” says Doyle. “It’s about having the best person in the room.”