Fintech firms falling behind in diversity
Fintech (Financial Technology) companies are trailing behind their peers in terms of diversity at the top, with women occupying fewer than one in ten (9%) of Board seats at UK Top 50 Fintech businesses, reveals research by Astbury Marsden.
Astbury Marsden’s analysis shows that women in Fintech businesses are under-represented at Board level compared to Silicon Roundabout’s technology companies, where Boards are comprised of 18% women on average.
It points out that FTSE 100 companies are now also far more diverse, having recently achieved the 25% female Board representation target for 2015.
The research found that more than two-thirds (69%) of the Fintech boards studied are made up of men only, in contrast to FTSE100 companies which have no all-male boards.
Adam Jackson, managing director at Astbury Marsden, said, “Fintech companies are among the most innovative, modern and forward-looking in the world, so it’s important that this is reflected in their leadership and governance structures through greater diversity.”
“Placing more emphasis on creating a broader spectrum of viewpoints at the top could benefit the industry in many ways, but there are also potential risks in failing to address diversity. It’s not an issue Fintech firms should ignore.”
Astbury Marsden explains that greater diversity can positively impact businesses’ performance. It is widely recognised to help:
· Improve corporate governance through delivering a more rounded approach to leadership - broadening the Board’s perspective when it comes to decision-making, reducing the risk of unchallenged consensus and increasing the scope of oversight
· Foster a more inclusive culture and provide a range of positive, powerful role models - helping to attract and retain talented staff and creating a more diverse workforce at all levels
· Enhance internal and external reputation with key stakeholders, including shareholders, customers and the media
Jackson added, “As the fledgling Fintech sector takes off, and fast-expanding companies look to fill increasing numbers of positions with high calibre candidates, this is a good time for Fintech companies to look at whether they can redress the gender balance.
“Focusing on diversity at the top as part of the current recruitment drive would set the tone, helping to establish a broader cross-section of talent all the way down through the organisation.
“Given that a well-balanced Board is now widely seen as essential, with stakeholders increasingly expecting to see companies focussing on diversity, the Fintech industry needs to be seen to do more.
“Setting recruitment goals to boost the numbers of female Board members could be one way of doing this, giving firms something to work towards and demonstrating their commitment to this issue.
“Having a target to aim at has effected significant boardroom diversity improvements at FTSE100 companies, spurred on by intense public scrutiny and political pressure. A similar - but proactive, industry led - approach could also yield positive results for Fintech firms.”
The Government-sponsored Davies Report was published in 2011to tackle the under-representation of women on FTSE100 Boards, setting a target of 25% female Board members by 2015. This has now been met. The target has now been extended to 33% female representation across the FTSE350 by 2020.