Financial sector’s lack of progress on gender balance ‘disappointing’, says Central Bank

A lack of progress eradicating the gender imbalance at senior levels of the financial services sector is "disappointing" and much more needs to be done, according to Central Bank deputy governor of prudential regulation Ed Sibley.

The Central Bank’s demographic analysis report for 2020 examined 3,600 applications to the regulator for approval to occupy a senior role in regulated financial firms. It found just over one in four were for women.

This compares to about one in six of the applications it received in relation to these pre-approved control function (PCF) roles across the sector in 2012, the first year for which data is available. But there was “little overall change” relative to 2019, it said as it published the numbers on International Women’s Day.

Within the largest (“high”) impact regulated firms, men hold 85 per cent of current PCF positions in the asset management sector, 78 per cent in the banking sector and 74 per cent in the insurance sector.

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There was a “pronounced gender imbalance” at board level across all sectors, with female applications for these positions falling to 22 per cent in 2020, down from 24 per cent the year before. In 2020, less than one-sixth of applicants for roles where the holders are responsible for driving strategy and / or business revenue were female.

"It is disappointing to see that progress is so slow and has, in some respects, stalled in 2020," Mr Sibley said.

Priority issue

“A lack of diversity at senior management and board level is a leading indicator of heightened behaviour, culture and governance risks. As diversity is so interconnected with risk, resilience and financial performance, it will continue to be a priority for the Central Bank.”

This is the fifth time that the Central Bank has published such data, which covers some 53 PCF roles at both board and management level. “Applications” to the Central Bank are made in respect of candidates who have been proposed by their employer to do the job, pending regulatory approval, and do not refer to the total number of applications the financial firm received when advertising a particular role.

Mr Sibley said the Central Bank would continue to “require improvements in this area” and undertake detailed reviews of the underlying issues.