Recommendation 3

HM Government Rejected

We agree with the Committee that a strong pipeline of female talent is key to supporting long-lasting, sustainable change. However, we remain unpersuaded that expanding the scope of the Women in Finance Charter is the right way to drive more change and increase the impact of the Charter. HM Treasury already recognises the talent pipeline as one of the key, sustainable drivers for change. This is illustrated in the language of the Charter: ‘The Charter reflects the government’s aspiration to see gender balance at all levels across financial services firms.’ HM Treasury has encouraged and will continue to encourage signatories to build a sustainable talent pipeline through communications, events and engagements. For example, in September 2023, HM Treasury and the London Stock Exchange Group organised an event focused on the talent pipeline. Recent Women in Finance Charter Annual Reviews have also found that signatories already recognise the importance of the talent pipeline and, more importantly, they are acting on this. Information provided by signatories shows they are increasingly seeking to nurture their female talent through actions such as measuring the impact of learning and development programmes and improving transparency of career pathways and internal job moves. Moreover, resources like the Women in Finance Charter Blueprint, developed by Nishma Gosrani at Bain & Company for Amanda Blanc’s Accountable Executive Taskforce, provide useful insights on effective actions that firms can take to strengthen their talent management practices and their talent pipelines. Our Industry Board also engages with their sub-sector charter signatories on a regular basis, delivering deep dive sessions and bringing in best practise examples and speakers to the insights from the Blueprint. We see clear benefits in retaining the Charter’s sharp focus on senior representation to ensure more, and faster, progress is made at the senior management level, which is pivotal to wider change. The 2023 Annual Review revealed that Charter signatories have increased female representation to 35% on average, up from 34% in 2022. While positive and consistent, this one percentage point average increase year-on-year is slow; at this pace, the signatory average would reach parity in 2038 and, even then, only across some sectors. We know it is possible for firms to move faster, and we showcase those that have made great strides in the 2023 Review. Extending the scope of the Charter would require signatories to submit additional data to HM Treasury on an annual basis, increasing the burden on firms and potentially making the Charter less attractive to new signatories. We will continue to engage closely with the Charter’s signatories, Industry Board and Accountable Executive Taskforce to consider how best to garner these insights by other means.