The boss of the London Stock Exchange has said gender diversity is not a “side-of-the-desk exercise”, as stark new figures show that there were nearly 200,000 more women working in the UK’s finance sector in 1997 than there are today.
Women in the financial sector have continued to earn less than their male counterparts over the past five years, according to a report from the Centre of Economic & Business Research (CEBR) on behalf of the London Stock Exchange (LSE).
The proportion of women working in finance has steadily decreased since the mid-1990s.
Diversity and inclusivity is a necessary-to-have, not a nice-to-have. When you think about it that way, it is not a nice distraction, it's just part of the job— Julia Hoggett, chief executive of the London Stock Exchange
In 1997 there were around 589,000 women working in the UK finance sector, whereas in 2022, some 26 years later, the number had declined by more than 30% to just over 400,000.
It means the share of women in finance peaked in 1997 at 57%, and has fallen over time, hitting its lowest point of 45% in 2021.
Julia Hoggett, the chief executive of the LSE, explained that the decline is partly because a much larger proportion of women worked in administration and clerical roles in the 1990s.
She told the PA news agency: “Some of those roles were made redundant as a result of digitisation over the years.
“But I have seen data that suggests, say in investment banking, there are occasions where women will disproportionately lose roles more regularly than men.”
Furthermore, women working across all job levels in financial services have continued to earn less than men over the five years to 2022, the report found.
And even though administrative roles were dominated by women, the weekly earnings of men in those positions remain higher and are growing at a faster rate.
Ms Hoggett said it is crucial that all companies collect and publicise data about their diversity and inclusion progress, so that they can be “held accountable”.
She said: “Unless you systematically gather the data in order to see where those pinch points and those issues are, then you wont be able to change it.
“I don’t think this is a side-of-the-desk exercise”, Ms Hoggett went on.
“Diversity and inclusivity is a necessary-to-have, not a nice-to-have. When you think about it that way, it is not a nice distraction, it’s just part of the job.”
Despite the number of women in finance declining over the years, the contribution of those women to the economy has been increasing.
Over the 26-year period, women working in the financial sector contributed £1.12 trillion to the UK economy, in total value-add and when adjusted to inflation.
This equates to an extra £299 per household per year, the CEBR said.
I have always had a sneaking suspicion that, actually, being openly gay has helped me in my career— Julia Hoggett
Ms Hoggett, who took over at the helm of the LSE in 2021 from her role as director of market oversight at the Financial Conduct Authority (FCA), said that she had not found being female a “challenge” in her 25-year career in finance.
This was partly because she did not have to take time off work when her two children were born, and therefore take a career set-back, she said.
“I have always had a sneaking suspicion that, actually, being openly gay has helped me in my career,” Ms Hoggett told PA.
“Sometimes if I took command in a board meeting, people would see that as ‘Julia being Julia’, when they might not say the same for a straight female colleague.”
She added: “To create the most value in an organisation you have to be inclusive.”
The CEBR said that the “next frontier” for policymakers must be childcare, specifically through measures such as shared parental leave, and for societal attitudes about childcare to change.
It follows a separate report from accountancy giant PwC on Tuesday which found that women are being priced out of work due to soaring childcare costs.
It said that the “motherhood penalty” has become the most significant driver of the gender pay gap.
