Diversity reporting shifts up a gear at world’s biggest banks: Two-thirds of Global Top 20 now measuring how diverse their workforce is in annual reports
February 1, 2016
- European banks far more likely to report on diversity than their American peers
- More than half report on proportion of women at senior level
LONDON, UK (DATE, 2015) – Diversity reporting has shifted up a gear at the world’s biggest banks, with two-thirds (65%) of the Top 20 banks* now measuring how diverse their workforce is in their Annual Reports, reveals research by global executive search firm DHR International.
DHR International explains that shareholders and other stakeholders are increasingly keen to see information on diversity included within Annual Reports - the flagship communications documents through which banks convey key information to them.
However, DHR International found that 20% of the Annual Reports analysed did not mention diversity at all.
DHR International’s findings show how seriously most global banks are now taking diversity as a means of improving recruitment and retention through inclusivity, creating a more representative and well-balanced workforce, fostering greater innovation and ultimately helping to boost corporate performance.
Stéphane Rambosson, Managing Partner of European Financial Services Practice at DHR International says: “Addressing diversity is no longer optional for world-leading businesses. In the global banking sector, diversity reporting is rapidly becoming the norm.”
“For stakeholders, this is not about buzz-words and box-ticking: shareholders - as well as policy-makers, the media, customers and staff - do expect to see a lack of diversity being tackled."
“Failure to provide a metric for, or even mention diversity in Annual Reports suggests one of two things – either that it’s not seen as important enough to report to shareholders or that the numbers don’t reflect well.”
“Since many banks do analyse the make-up of their workforces, and are increasingly asking us for a diverse slate of candidates when looking to fill senior roles, reporting will help to demonstrate they are taking a lead in this area. Even if there is room for improvement, showing that this is being recognised and focused on is important."
The research flagged up several interesting examples of best practice. (See box-out below).
European banks far more likely to report on diversity than American peers
DHR International’s research also found that European banks are typically far more likely to report on diversity than American and Canadian banks.
91% of European banks provided a metric for diversity in their Annual Reports compared to just 33% of their North American peers.
In addition, almost two-thirds (64%) of European banks reported a diversity target – but no US or Canadian banks did.
Stéphane Rambosson says: “The depth of information provided tends to be far greater in Europe - most likely due to intense political pressure to redress gender imbalances in the boardroom increasing the focus on diversity generally.”
“This doesn’t mean that US and Canadian banks are necessarily any less committed to diversity than their European cousins – more that policies and progress are just not being communicated to the same degree.”
"However, there can be a lot of truth in the old adage that what doesn't get measured doesn't get done."
Investment banks behind commercial banks in diversity reporting
DHR International adds that those institutions with bigger investment banking arms are behind retail and commercial banks in terms of diversity reporting.
Only half of investment banks provided a measure for diversity in their Annual Reports, compared to 88% of retail and commercial banks. Moreover, just 25% of investment banks’ Annual Reports contained a diversity target, while half of commercial banks reported their future targets.
“Being more consumer facing, retail banks are far more used to ensuring that the diverse nature of their client base is reflected in their senior appointments. There is also the traditional perception that retail banks have offered an environment in which women have been better able to thrive than investment banks, but there is an ongoing effort among investment banks to consign that to the past" says Stéphane Rambosson.
“Previously, investment banks may have seen less need to report on diversity because they have a narrower customer base with different motivations than a retail bank. However, that is changing. Investment banks are increasingly seeing the need for diversity as one of their major HR challenges."
More than half report on proportion of women at senior level
DHR International’s analysis reveals that more than half (55%) of the banks studied measured the number or proportion of women occupying senior positions (director level and upwards) in their Annual Reports, with over a third (35%) comparing it to previous years’ levels.
Stéphane Rambosson adds, “Many banks may have come a long way in boosting female representation at board level, so they should celebrate that. However, they are increasingly wanting to show that this goes far deeper into their organisations.”
“Given that the benefits of having a more balanced workforce all the way up to senior management level are widely recognised, banks want be seen to take gender diversity among top executives seriously. Highlighting progress against previous years is a good way to do this.”
“Ensuring the workforce is diverse can also aid decision making across all levels of the organistaion. This encourages a range of varying approaches to problem solving and can lead to fresh ideas."
DHR International’s research flagged up several examples of best practice such as:
Citigroup launched a “CEO scorecard” in 2013 which measures the diversity of candidate slates for top positions. Citigroup set a target of 58% on this scorecard in 2014, and reported surpassing this target with 70% of candidates ranking on the scorecard.
Citigroup holds an annual series of corporate activities in Mexico, Latin America, Europe, Middle East and Africa (EMEA) and Asia Pacific, designed to raise awareness of diversity and inclusion issues.
Citigroup also runs the ‘Investing in Tomorrow’s Female Leaders’ programme which aims to advance women into leadership positions. Since the launch of the programme, 761 women have taken part.
Lloyds Banking Group lists targets and performance measures across a range of classes of diversity as part of a traffic light system for key metrics, alongside other business-specific measures such as mortgage provision to first-time buyers and SME lending. Lloyds also offers a range of programmes to support disabled colleagues including the workplace adjustment programme, which provides physical and non-physical adjustments to support colleagues in their roles. Since 2002, 1,300 colleagues have participated in and benefited from career development and training programmes specifically for disabled colleagues.
The group also runs networks aiming to promote diversity including:
- Breakthrough, a women’s network committed to encouraging the development of female colleagues.
- The Group Ethnic Minority network focuses on career development and supports the aspirations of its members.
- Rainbow, an inclusive Group-wide network for lesbian, gay, bisexual and transgender colleagues aiming to promote a positive and inclusive working environment.
Deutsche Bank holds an annual Global Diversity Week in which 20,000 staff took part last year, up from 6,000 in 2011.
It has also committed to a voluntary undertaking to increase the number of female senior Directors and Officer titles to 25% and 35% respectively by 2018 and is actively increasing its recruitment of women at top level – the number of female Managing Directors and Directors has increased by 17% since 2010.
Percentage of Top 20 global banks reporting on diversity in Annual Reports
*Top 20 global banks by size of balance sheet