Equal opportunity affects many industries, banking not being an exception. However, there are signs of improvement and the banking sector recognises the need to change. Noreen Doyle, the first female chair of the BBA, believes that banking ‘intends to lead, not to follow’ in this cause. Patrick Brusnahan reports
In 2013, the Department for Business, Innovation and Skills (BIS) added requirements for companies to report on the gender breakdown of their employees. At a minimum, companies must release the gender ratios relating to main boards, senior managers and total employees.
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The British Banking Association (BBA) supported this development and has released a report entitled ‘Diversity and inclusion in banking’. It showed that the banking industry had met its target, set by Lord Davies, of 25% of all FTSE 100 board positions being filled by women. This has doubled their number in just over five years.
Anthony Browne, chief executive of the BBA, wrote in his introduction: “In conducting our research, it quickly became clear that banks took diversity and inclusion very seriously and that this was not limited to gender, but focused upon opening up opportunities for all their employees irrespective of background, ethnicity, sexual orientation or disability.”
The importance of being inclusive
The report states that due to banks’ prominent position within society, they have a crucial position in society and can alter perceptions and inspire change through leading by example.
To make diversity initiatives more effective, all levels of the banks need to be engaged. The change can only be effective if there is leadership and bottom-up support.
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By GlobalDataMany diversity and inclusion teams were found within HR departments as the access they can bring is key. However, the support from board members and senior managers is just as essential if employees are to follow through on recommendations from HR.
Bank CEOs with an eye on diversity have a large amount of pressure on them. One example given within the report is Lloyds Banking Group’s CEO, Antonio Horta-Osorio, recently writing to all the senior leaders in the group reminding how important the diversity agenda was and how they were expected to support it actively. He also committed to increase the proportion of senior management roles held by women to 40% by 2020.
Different banks can have different priorities in the space for different reasons. The type of banks, its customers, staff composition and location have a strong influence on the bank’s diversity agenda.
For example, BNP Paribas focuses on driving progress in relation to nationalities, rather than other diversities. This is due to BNP Paribas’s international presence and its multinational workforce. The end goal is to enhance understanding of different cultures and how such diversity can drive better performance.
Barclays prioritised the support and sponsorship of LGBT events and is now looking at helping the disability sector. In 2013, Barclays launched its Accessibility Standards, which include a commitment to accessible services. This means that the widest audience possible needs to be considered when designing new products and services. 85% of the bank’s ATMs have audio functions and all stationery is easy to use for everyone.
In 2015, signed video for its hearing impaired customers was introduced and the bank is working on Beacon Technology which enables customers to share accessibility requirements directly with branch staff via an app.
It pays to be diverse
With improvements in collection of data and reporting, there has been a strong economic case to be made for inclusion.
Catalyst, a US firm, analysed the effects of females on boards in Fortune 500 companies. The findings purported that a more heterogeneous boardroom can improve results, lower risk and create a more effective corporate culture.
In addition, a recent study from McKinsey & Company in 2014 concluded that there is a correlation between the financial performance of a company and the extent of gender and ethnic diversity in its leadership team. While a link was not necessarily suggested, the findings are added to a body of evidence saying that more diverse leadership teams lead to more success.
The study found that businesses in the top 25% for gender diversity were 15% more likely to have higher than median financial returns. This jumped to 35% for the equivalent group regarding ethnic diversity. Another way of putting this is that the companies in the lowest quarter for ethnic and gender diversity had financial performances that were 25% lower than those in the highest quarter.
Embedding diversity in the culture of a bank is important. This changes diversity into something that every member of staff automatically subscribes to throughout their working lives.
However, some of those interviewed in the report spoke of the danger of diversity being considered as a high profile event and not something that happens everywhere. This runs the risk of it being something that an employee individually does not have to sign up to every day. The trick is to make diversity and inclusion a daily reality, not a special one-off occurrence.
