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Leasing Professionals Kerry Huntley spells out why gender parity is a strategy to explore for asset lenders seeking better business in 2016 Published: 9th December 2015 Share Global Financial Services is undeniably a male-dominated industry. This is the case with traditional banking (according to one study on the banking and financial services sector in the UK, only 30% of respondents believe that gender diversity is good within their organisations) (1), and probably even more so when it comes to more specialist areas of business finance, such as the asset finance and leasing industry. Yet in a world that is experiencing a radical rebalancing of economic maturity and power, giving rise to considerable opportunities for the role of finance in an expanding world economy, to under-utilise the talents of women seems short-sighted. At the moment, in Siemens Financial Services (SFS), we currently have a gender balance of 51% female and 49% male. Breaking with corporate cultures, and indeed national social norms, may require regulations, rules and quotas in the first instance. But such policies are only the start and further action is needed. The purpose of diversity in the workforce (and that means right through from junior workers to board directors) is very practical; to produce the most effective, capable and high-yielding workforce and leadership that is humanly possible. It is not a political standpoint. It is not a matter of social morality (though both are important issues in the world at large). It is a case of better business. Which then implies that until the financial services industry in general, and asset finance in particular, can improve its track record, both sectors must by definition be under-performing (2). Gender parity – the current state of play While progress has been made, business in general, and the financial services sector in particular, must make further efforts to recognise, capture and foster female talent. The proportion of women who have climbed the corporate ladder and made it to main board level varies widely between countries. Norway and Sweden are known for having the highest percentage of female board members, 26% and 23% respectively. The situation in Norway is of particular interest when considering the role government policy plays in narrowing the gender gap: Norway was the first country to introduce legislation making a female board quota mandatory for publicly listed companies. It would seem that in the initial stages, legislation may hold the key to fundamentally changing attitudes. However, it is not sufficient in the long-term to simply enforce such measures. Evidence of long-term commercial benefit has to accrue if the change is to be permanent. Some evidence is emerging. Studies have demonstrated a positive correlation between women in leadership positions and a company’s financial performance, with one study revealing that Fortune 1000 companies run by women oversaw financial results, on average, that beat the stock market (103.4% vs 69.5% return for the S & P 500 stock index) (3). However, while women comprise nearly 60% of employees in the financial services industry, less than a fifth (19%) progress through to hold more senior management roles (4). Leveraging diversity – key steps What, then, are the essential steps to develop a diverse talent strategy across the organisation? A review of the various expert sources on this issue reveals consensus over four key steps: a) Defining leadership In order to make the beacon of leadership attainable by all, it is essential to construct the clear, tangible performance goals, valued capabilities and critical behaviours that these positions require. At SFS, for instance, this kind of definition has led to the formulation of talent programmes to recognise and nurture SFS’s outstanding potentials globally. A definition of leadership which focuses as much as possible on hard outcomes – not just token behaviours – helps to achieve a number of diversity goals:- • to prevent incumbent bias ignoring diverse talent; • to make it difficult for failure to persist; and • to make non-co-operation from incumbents visible and subject to penalties. b) Implement a common standard for talent assessment Accurate assessment of talent and potential is a crucial component of leadership development. Candidates need to demonstrate skills in areas such as risk taking, owning profit and loss responsibility, building and leading strong teams, anticipating and managing change and resilience in the face of adversity. Behaviour-based assessment systems are useful in this context, in that they measure not only the business achievements, but also how they are achieved, a critical factor in building and leading sustainable business success. For example, at SFS a specific leadership programme is the catalyst for the continuing development of excellent leadership at the company, offering a series of leadership learning programmes to a selected group of managers. c) Evaluate the leadership development pipeline and process While succession planning at board level is common, the same cannot be said of middle-tier management progression. Organisations need to ensure a viable internal talent pipeline that embraces diverse talent before casting an eye elsewhere. For instance, at SFS we use a management tool designed to align people strategy with business strategy. It gives a fast and accurate overall picture of relevant key functions and the current succession situation as well as identifying high potentials. d) Build the business case for diversity Substantial evidence of the business benefits of gender diversity exists but such information must become internally recognised. It should be presented to the board, to management, and to the shop floor. The company should publicly make a commitment to diversity and publish updates in its annual report, all the while presenting the issue as part of the strategy to grow the business, not merely as politically correct tokenism. A strategy to explore Diversity is not a matter of corporate posturing. It is a strategy to explore, capture, harness, and nurture the best talent in the company and external candidate pool, in order to improve business results. Although a different image of the industry is beginning to take shape, more efforts must be made to encourage change. Kerry Huntley is HR Business Partner at Siemens Financial Services 1. Michael Page, Banking and financial services salary survey: insight and trends, 2014 2. Various sources, for example:- McKinsey, Women Matter, 2013; Exeter University, Gender Diversity in the Financial Services Sector, January 2013; AFI, Leasing Foundation & DWF Collaborate on Diversity Scorecard for Leasing and Asset Finance, 5 September 2013: Y Chan, Is Diversity a Strategic Asset for Organizations in the Financial Services Industry? Leonard N. Stern School of Business New York University, May 2009; AFI, “Greater Gender Diversity will Transform the Economy” Say Leasing Executives, 2 October 2013 3. Fortune, Women CEOs in the Fortune 1000: By the numbers, July 8 2014 4. PriceWaterhouseCoopers, Mending the Gender Gap, May 2013 Asset Finance Connect Asset Finance Connect brings you news and updates about UK and European auto, equipment and asset finance providers. 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