Women in Financial Services

This chapter opens with considerations on the growing importance of the debate on gender equality in firms, both financial and non-financial, which is now at the heart of regulatory proposals, laws, and voluntary rules all over the world. For financial firms, the centrality of the issue is due, among other things, to one of the causes of the financial crisis triggered in 2007–2008, known under the term “group-think”. This expression underlines a dysfunction in governance mechanisms, namely the lack of adequate diversity in the opinions, skills, and backgrounds of those who assume a key role in corporate decision-making processes. The structure of the book is then explained, with a brief description of each chapter to give the reader an overview of the many facets of this topic.

The chapter opens by exploring the growing attention to gender diversity and its main drivers in the financial system, primarily in the banking sector. It first analyses the reasons behind the strong focus on gender diversity in this system, linked to the so-called group-think (considered one of the main causes of the 2007–2008 financial crisis) and the related “Lehman Sisters Hypothesis”. The chapter then outlines initiatives and legal measures aimed at disseminating the culture and practice of gender equality. Detailed reference is given to CRD IV and CRD V: CRD IV deals with the criterion of diversity in its broader acceptation (in terms of gender, age, geographical origin, professional background, and so on) in relation to the recruitment and composition of governing bodies; CRD V deals with gender-neutral pay policies. Section 3 provides a detailed overview of the so-called hard gender quotas, which are compulsory by law, and the “soft” quotas, which are not compulsory by law but rather stem from self-regulatory initiatives. Section 4 describes requirements for disclosing information on gender diversity, with specific reference to the Global Reporting Initiative standards. The chapter closes with Sect. 5, which describes indexes that track the performance of companies committed to supporting gender equality and provides details on gender parity certifications and the Women’s Empowerment Principles, with mention of some of the financial companies involved.

This chapter offers a comprehensive literature review of the existing research on board gender diversity (BGD) and performance in banks and other financial institutions. After briefly reviewing the main theories on the role of women in the decision-making process, we analyse different relationships. First, empirical studies investigating the relationship between BGD and bank economic-financial performance are examined. Given the large number of studies, they are grouped into three categories: (1) studies revealing a positive linear relationship, (2) studies supporting non-significant, negative, or non-linear relationships between BGD and bank performance, and (3) studies focused on the Microfinance Institutions (MFIs). Then, the analysis shifts to the studies that examine the associations between BGD and bank efficiency, bank corporate social responsibility (CSR) performance and bank risk-taking. The final section of the chapter is dedicated to other areas of research on bank gender diversity that would benefit from an in-depth exploration.

This chapter aims to provide data on the representation of women in financial firms, especially banks, and the evolution of this over time, drawing on several studies conducted mainly by international and European organisations. A special focus is devoted to female board members with both executive and non-executive functions, chairwomen, and female CEOs. The general trend shows, on the one hand, an increase in the presence of women, particularly as non-executive board members, most likely due to pressures resulting from the introduction of gender quotas in many countries, and on the other hand, a low number of female CEOs and chairs. Moreover, the data show the persistence of a low number of women in revenue-generating roles (the so-called roles associated with “profit and loss responsibilities”). Despite the large differences in the data across countries, the Scandinavian countries seem to be the most oriented towards gender equality. Finally, attention is given to the “double glass ceiling” phenomenon. In this respect, studies show that despite the existence of a gender balance at entry levels, the relationship becomes increasingly imbalanced in middle management and especially in executive committee positions. The chapter analyses both the motivations behind this phenomenon and some supporting data.

This chapter addresses the issue of the gender pay gap within the financial system. To this end, it first reviews the main treaties and legal acts that formalise the principle of equal pay for men and women from the Treaty of Rome to the main European directives. It then analyses the theoretical and empirical studies on the issue, which for the financial sector are still in an embryonic phase. The second part of the chapter focuses exclusively on the financial system, analysing the evolution of the gender pay gap over time and the differences across geographical areas and economic sectors. The assessment primarily addresses data collected by Eurostat and the European Banking Authority (EBA). It also provides a focus on the gender pay gap in the UK banking sector. Finally, the chapter explores the most recent laws on the gender pay gap passed in several European countries and the novel “gender neutrality principle” of banking remuneration practices. The chapter ends by proposing some actions that need to be taken by banks to close the existing gender pay gap.

This chapter aims to analyse gender diversity in the insurance sector. It consists of three sections. The first section presents the main evidence from the existing studies and research conducted so far only on insurance companies. The second section reports some data on the current presence of women in the workforce of these financial institutions including managerial and top positions. Finally, the third section highlights the progress that this sector is making towards greater gender equality by presenting three leading insurance companies in the European market (Axa, Zurich Insurance, and Assicurazioni Generali) that are particularly attentive to advancing gender diversity.

This chapter focuses on the role of the asset management (AM) industry in adopting and disseminating gender diversity principles. To this end, the chapter opens with a brief analysis of the rationale behind the importance of gender diversity in the AM industry. Subsequently, it focuses on the significant barriers that women still encounter in this financial sector. The second section analyses the main regulatory initiatives put in place by both European and US regulators to promote gender diversity in the AM sector. The third section deals with the current adoption by US mutual funds of investment strategies focused on the promotion of gender equality. This is followed by an overview of the main “gender diversity funds” that some important asset managers (Nordea, Fidelity, RobecoSAM, UBS Asset Management, and State Street Global Advisors) have chosen to launch recently on the market. Finally, the chapter closes with an in-depth look at the main initiatives adopted by three European AM trade associations (Investment Association, Finance Finland, and Assogestioni) aimed at encouraging asset management companies to increase the uptake of gender diversity policies and standards.

The chapter deals with gender issues in Central Banks (CBs). Here, discrimination against women and obstacles to their careers seem even more pronounced than in supervised financial intermediaries. The chapter first discusses the causes of this accentuated difficulty for women and then reviews the scarce literature on the pattern of appointments and promotions of women on CB boards, on the relations between gender and monetary policy decisions, and on the influence exerted by women on the stability of the financial system and the quality of supervision. The focus then shifts to the strengthening of the gender parity policy by the European Central Bank (marked by the setting of targets for the recruitment and promotion of women) and to women governors. In regard to the latter, we attempt to outline a detailed picture of the women who have held such positions in CBs around the world, highlighting both how rare they still are and how patterns change across countries. Finally, the chapter offers a picture of gender policies followed by the EU28 CBs based on responses provided by banks to our survey or on information retrieved from the banks’ documents, especially their annual reports.

This chapter is exclusively empirical as it aims to provide an overview of the gender diversity policies adopted by banks and insurance companies worldwide over the last 11 years (2010–2020). This was done by using information collected from the Refinitiv Eikon database. The data considered are (a) the percentage of women employees, (b) the percentage of new women employees, (c) the percentage of women managers, (d) the percentage of female directors on the board, (e) the percentage of female executive members, (f) the gender pay gap, (g) the flexible working hour mechanisms promoting a work-life balance, (h) the board gender diversity policy and, finally, (i) the support for the UN-Sustainable Development Goal (SDG) 5 Gender Equality. The full sample consists of 2064 listed financial intermediaries of which 1427 are banks and 637 are insurance companies (belonging to the following sub-sectors: life & health insurance, multiline insurance & brokers, property & casualty insurance, and reinsurance). Overall, the analysis shows that women are still underrepresented in managerial and especially executive roles in both the banking and insurance sectors. However, it is important to underline that in the last 11 years, there has been a rearrangement of the roles held by women. On the one hand, the number of women employees has decreased. On the other hand, the number of women directors, managers, and executives has increased, although at very different growth rates. In any case, this rebalancing process is still ongoing and will be so for a long time.

The chapter analyses gender diversity in Italian banks starting from the regulatory framework, first by looking at the Golfo-Mosca Law, which was reiterated with amendments by the 2020 Budget Law. Alongside these regulations, the chapter illustrates numerous additional initiatives, such as the establishment of an Observatory that studies and promotes gender equality by the Bank of Italy, together with the Department for Equal Opportunities of the Italian Presidency of the Council of Ministers and the Italian Companies and Exchange Commission (Commissione nazionale per le società e la Borsa, CONSOB). Another initiative is the charter by the Italian Banking Association inviting signatories to strengthen their governance following the principles of inclusiveness and equal opportunities. Not least, the proposal by the Bank of Italy, following its 2015 diversity benchmark, of introducing a gender quota in the administrative and control bodies of banks. The chapter ends with an analysis and commentary on the female presence and the gender pay gap in Italian banks (with a focus on listed banks) based on data extrapolated from corporate governance and remuneration policy reports.

This chapter opens by underlining the importance of a model that allows the assessment of the gender diversity of financial firms under several analysis profiles widely discussed in the previous chapters. We propose a model of analysis that is suitable for the construction of an index of gender diversity based on a set of items predetermined according to standards, legal acts, and best practices relevant to the topic. More in detail, the framework consists of 24 items that can be divided into four categories: (1) gender balance in governance bodies and employees; (2) policies promoting gender equality; (3) transparency of the company’s actions towards the community; and (4) equal compensation. In the case of comparison among intermediaries of the same country, the proposed framework can be integrated by taking into account further elements peculiar to each country. It is a first attempt to fill a gap in the gender diversity literature, where—to the best of our knowledge—there is no framework to calculate a gender equality index that goes beyond the composition of governance bodies and the gender of the board chair and/or CEO.