Where in the world are financial services firms closest to achieving gender equity among their leadership ranks?
In 2019, we launched our Within reach series to spark conversations on the progress financial services institutions (FSIs) have made toward achieving gender equity in leadership roles and uncovering strategies that enable meaningful growth in the number of women leaders. To date, our series has focused on some of the largest public US FSIs, but now we are expanding our lens to include women in financial services leadership roles around the world. This article is the first in a new series focused on exploring the data and issues that determine whether worldwide gender equity is indeed within reach.
To get a clear sense of progress across regions, our analyses1 will focus on these key metrics: current share and forecast growth2 of women in financial services over the next decade, by role category (see sidebar), and the multiplier effect3—whether having women in the C-suite created a ripple effect throughout an organization, resulting in having more women overall in senior leadership roles.
Our assessment of the share of women by role categories in FSIs in 2021 establishes a baseline from where we can measure growth or decline annually. Spanning over two decades (through 2021) and encompassing nearly 23,000 FSIs across more than 160 countries, our data analysis employs a time-series model to forecast potential growth through 2030.
C-titled roles at the corporate leadership level (e.g., chief executive officer, chief financial officer, or chief marketing officer).
Non–C-titled executives (e.g., line-of-business leaders, division chiefs or regional leaders, EVPs, or SVPs or equivalents). Depending on the institution, this may be 1–3 levels below the C-suite.
All other workforce titles below senior leadership.
Oceania leads the C-suite regional forecasts, with nearly 9% projected growth, and is the only region projected to achieve a 30% share of women in C-suite roles over the next decade (figure 1). This is important, as research shows that reaching this 30% threshold is often considered the tipping point for enacting substantive change across an organization.4 North America and Europe are both expected to exceed 6% growth in women in the C-suite by 2030.
Asia and Oceania are the only regions expected to record growth in the share of women across all role categories—C-suite, senior leadership, and next generation—by 2030. Meanwhile, with a 28.3% share in 2021 and forecasted growth to 33.5% by 2030, Africa leads all regions in current and projected growth in the share of women in senior leadership roles.
That said, our analysis indicates that North America, South America, Europe, and Africa, also reflect a decline in the share of women in one or more role categories by 2030.5
Viewing these numbers with an industry lens, women’s share of leadership roles within FSIs compares favorably across 11 industries, according to S&P Global’s Gender equality in the workplace report.6
But the numbers only tell part of the narrative. The programs and strategies that FSIs enact to increase the representation of women in leadership are the ultimate drivers of sustainable, long-term change.
External factors, such as public policy, cultural norms, investor expectations, and corporate social responsibility initiatives can impact gender equity progress. Legislative actions to achieve diversity quotas or government-backed nonbinding board diversity targets vary by country. Some countries, such as Finland and Sweden, look to self-regulation to increase the ratio of women on boards.7 Australia, which also doesn’t have legislative mandates, averages 32% representation of women on boards,8 and is notably influencing our Oceania estimate of a greater than 30% share of women in the C-suite by 2030.
While legislative approaches are primarily aimed at increasing gender diversity on boards, Germany and, more recently, France have set nonboard gender diversity targets for institutions.9 Illustrating that a greater number of women in leadership roles tends to influence board diversity, Deloitte’s Women in the boardroom research has shown that organizations with women CEOs have almost double the number of board seats held by women.10 Our research shows that this phenomenon also applies at the organizational level when looking at the ratio of C-suite to senior leadership levels in FSIs.
Finally, many investors are also monitoring and advocating for gender diversity on boards and within the leadership ranks.11 Credit Suisse’s 2021 “Gender 3000” research found a “diversity premium,” defined as a correlation between more gender-diverse leadership and higher returns on capital, among other financial measures.12
Regardless of region, here are some actions FSIs should consider now that can help improve gender equity:
Our research shows that having women in the C-suite matters. In fact, this level of representation in leadership can be inspiring. “She did not mentor me. She did not sponsor me. But she absolutely inspired me. Because she was there,” a facilitator from Deloitte’s 2019 “The future of women leaders in the financial services industry” panel explained.13 This, in part, illustrates a phenomenon we call the multiplier effect14 (see endnotes for details and methodology): For each woman added to the C-suite, we observed a positive, quantifiable impact on the number of women in senior leadership levels just below the C-suite. In North America, the multiplier effect is 2.9—meaning that every woman added to the C-suite results in nearly three additional women among the senior leadership ranks (figure 2). Europe revealed similar numbers—2.6—and Oceania’s were slightly lower, at 1.8.
Among the other regions—Africa, Asia, and South America—a multiplier effect could not be determined. This is because the math, put simply, didn’t add up: While historically the growth of women in the C-suite outpaced those in the senior leadership, there weren’t enough women in FSI C-suites and senior leadership, at the organizational level, to see a ripple effect throughout their organizations. In the coming months, however, this series will delve deeper into data from select individual countries where the multiplier may be evidenced even though at the corresponding regional level a multiplier was not revealed.
For FSIs to drive meaningful change and realize the full power of the multiplier effect across their organizations, they will need to improve diversity at the highest levels. For some institutions, this may represent a fundamental shift in their strategic efforts to build a diverse pipeline. Gender equity in FSIs may be within reach if leadership—both women and men—commit to and act on building and sustaining a diverse workforce.
Deloitte’s diversity, equity & inclusion (DEI) consulting services change the world by taking a systemic approach to help organizations access and engage a more diverse workforce; build inclusive leadership capabilities; foster a culture of belonging; and embed equity and inclusion across every business function. Contact the authors for more information.