C-suite gender equality deemed critical in finance

MCKINSEY & CO. said gender disparity in the boardrooms of financial institutions remains an issue in the Philippines, and called female representation important in the context of a customer base that is growing more diverse.

McKinsey Managing Partner Kristine Romano said even though the banking industry employs more women than men, C-suite representation remains a “real issue.”

“What’s interesting about this market is that in general, in financial services, there are actually more women than men in banks - for example, tellers and branch staff are typically >50% female,” Ms. Romano told BusinessWorld via e-mail.

“However... the real issue in the Philippines, as we find in other markets, is the ability of women to get to the most senior posts in banking.”

She cited a September study conducted by McKinsey and LeanIn.org in North America, which found that only 19% of top positions are held by women in financial services, noting that key barrier to the rise of women was what she called an ambition gap.

According to the Closing the gap: Leadership perspectives on promoting women in financial services research, over half of the women — or those who have reached the level of vicepresident or above - believe that they have missed out on opportunities because of their gender, compared with just 10% of their male peers.

The study added that women are promoted at lower rates than men across all sub-industries, which include asset management and wholesale banking, banking and consumer finance as well as insurance.

Ms. Roman said harnessing gender diversity in the workplace is “critically important” at a global level as clients are getting more diverse as well.

“The concern is that as the traditional customer base becomes more diverse, so too must the companies that service them,” she said.

“Many we spoke to believe the competitive marketplace ultimately will demand diversity from financial services providersespecially as women increasingly take the financial reins of their households.”

Aside from providing representation to better reflect the more diverse customer base, Ms. Romano added that promoting gender parity in the workforce will also translate to profitability for the company.

The study indicates that companies rated in the top quartile for gender diversity on executive teams were 21% more likely to outperform in terms of profitability.

“Our research shows that firms that are more diverse are in fact more profitable, so this is a business imperative, not a ‘nice to have’ initiative,” Ms. Romano said.

McKinsey proposes a number of best-practice solutions to help achieve gender equality in the industry, such as enhancing access to sponsorship, eliminating bias from performance reviews and promotions, giving employees more flexibility to balance work and family and building accountability into the system through diversity targeting among others.

“While it’s hard to predict precisely what the future looks like, our view is that the more that corporate leaders — both male and female — view gender equality as a strategic priority and one that is integrated into the organization’s day-to-day work, the more we can realistically expect a change to occur,” Ms. Romano said. —