In an opinion piece published on The Banker, new editor in chief Silvia Pavoni observed that “diversity is an attribute that still largely eludes banks and other financial companies”. Writing that “decisions at board level are, arguably, among the most consequential and challenging the organisation will ever make”, she suggested that the key to giving the board “the best chance of coming to a well-thought-out conclusion” is having people “with a variety of skills and perspectives”.
In her piece, Silvia Pavoni quoted findings from an EY study published in January this year, which showed that only 44 percent of financial services directors appointed in 2023 were female – a decrease compared to 2022, when the figure stood at 51 percent. The same study stated that “current gender split across all firms stands at 57 percent male and 43 percent female (down from 58:42 in 2022)”. In addition, “31 percent of listed European financial services firms are still reporting under 40 percent female representation in their boardroom”.
Silvia Pavoni acknowledged the argument that some might have that “banks (and most businesses) are continuously faced by so many other and more urgent problems that they can’t possibly also be called out for poor diversity performance”.
Change is coming
Nevertheless, change might be underway. Several regulations are now in place encourage diversity in the financial sector. Companies listed on Nasdaq are currently required to have one “diverse” director, a number that will increase to two for companies in some segments in 2025. There is an EU directive that requires the boards of listed companies to have “at least 40 percent of non-executive roles occupied by the ‘underrepresented sex’ and 30 percent for all directors”. By 2026, member states will have to establish penalties for companies that fail to comply.