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‘Mediocre’ Male Managers in Finance Hold Women Back, Report Says

Bloomberg logoBloomberg 6/16/2021 Lisa Pham
a view of a city at night: London's Deserted Offices Could Gain 25% Over Next Five Years © Bloomberg London's Deserted Offices Could Gain 25% Over Next Five Years

(Bloomberg) -- From all-male leadership teams at listed companies to ‘mediocre’ male managers in finance, two separate reports Wednesday laid bare the scale of the challenge facing U.K. business if they want to bolster diversity.

Smaller companies in Britain’s FTSE All-Share Index are lagging behind their larger peers when it comes to having diverse representation on their boards, according to a report by Women on Boards UK.

More than half of the companies in the FTSE All-Share Index excluding the top 350 firms had all-male executive leadership teams as of the end of last year, compared with 8% of FTSE 350 companies, the report says.

And although about two-thirds of FTSE 350 companies have met a U.K. government-backed target of 33% female directors on their boards, less than half of the firms in the rest of the FTSE All-Share have achieved this goal.

As for ethnic diversity, only 6.8% of FTSE 350 board members are identified as directors of color, with the figure dropping to just 3% for the rest of the FTSE All-Share, according to the report.

“Progress on board diversity has been painfully slow and recently there has been a creeping sense that what has been achieved is ‘enough’ and no more effort is needed,” said Fiona Hathorn, co-founder and CEO of Women on Boards UK. “More is absolutely needed.”

Finance Failure

Meanwhile in the finance industry, inadequate male managers and fake empathy are among the headwinds holding back women, according to a Women in Banking and Finance report with the London School of Economics.

‘Mediocre’ men were more likely to stay in the sector than comparable females because they fit the social norm of what a worker in financial and professional services looks like. By contrast, women -- and particularly Black women -- had to outperform to progress, according to research that included interviews and roundtables with 79 women working in the City of London.

“Having the opportunities of talented women guarded by managers that favor people ‘like them’ and play bad politics is detrimental for financial services in terms of innovation,” said Grace Lordan, director of the Inclusion Initiative at the London School of Economics.

Listed Entities

The Women on Board UK report made recommendations including:

Scrutiny of the number of individual FTSE All-Share companies reaching board and executive diversity targets, not focusing on overall collated dataAll listed entities, excluding collective investment companies, report their Gender Pay Gap, on a comply or explain basisFTSE All-Share companies to aim to reach the ‘gold standard’ of 40: 40: 20 gender balance, with 40% women, 40% men and 20% of either, and/or other genders

The report draws on data from company websites or investment trust fact sheets as well as information on the FTSE 350 from the Hampton-Alexander and Parker Reviews.

There are good business reasons for having more women in leadership positions. Large firms in the U.K. whose executive boards are one-third female are 10 times more profitable on average than all-male boards, gender-diversity consultancy The Pipeline said in a study last year.

(Updates with details of Women in Banking and Finance report throughout.)

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