Even though there has been progress, the underrepresentation of women at the top ranks in financial services remains an enormous concern. How hard is it for women to advance?
Catalyst recently published a pyramid graph (below) showing just how leaky the pipeline to the top is for executive women.
Over half of the entry-level hires in our industry are women, but after that, women remain the minority. The story grows bleaker at each corporate tier. With women occupying just 2.6% of CEO positions in our industry, it is clear further action must be taken.
This isn’t just about equality — and it’s certainly not about placing women into top-tier positions if they aren’t the best qualified individuals to be there. This issue is much bigger, much more genuine than that. Right now in financial services, there exists a daily struggle to give the best qualified candidates who are also women the opportunity to lead. Simply put, women are still being overlooked for critical positions far too often.
Opening Up the Flow
So how much effort is it going to take to boost top-level representation? It turns out, less than you might think.
A study published earlier this year by McKinsey & Company examined the talent pipelines of 60 Fortune 500 companies. The study found that only a slight increase in the number of women moving up from mid-manager is required to significantly increase female representation in senior executive positions. The report states:
In the average company, a 10% boost in the odds of women advancing from manager to director and to VP would yield 90 more female senior executives including 5 SVPs and 1 executive committee member. The pipeline does change. That 10% turns into a 4 percentage point increase in VPs and SVPs and a 3 percentage point jump in C-suite women.
Announcing “The Executive Pipeline Action Group”
Given this fact, I was excited to hear that, across the pond, The 30% Club just announced the launch of “The Executive Pipeline Action Group.”
According to an announcement on Baroness Goudie’s website, the Action Group “will work with FSTE350 companies in co-ordinating efforts to improve the female executive pipeline.” Recent WE blog interviewee, Helena Morrissey, CEO of Newton Investment Management and Founder of the 30% Club, said:
“This new initiative is a necessary and logical extension of the efforts already underway to develop a healthy pipeline of future female leaders. The fact remains that too few women have historically stayed the course in order to achieve an appropriate balance of men and women in senior management teams, and the 30% Club has to date been looking at specific components of this problem, such as the particularly acute female attrition rate at professional services firms. We need to broaden these efforts, and I am confident that this collaborative business-led approach will enable us all to make better progress.”
This is great news. Companies need to be encouraged and aided in their efforts to build healthy pipelines of female talent. As the McKinsey Report proves, small improvements along the pipeline really do make a big difference when it comes to getting qualified women into positions where they can make the biggest impact.