According to data compiled by Bloomberg from and index of 455 companies in 24 markets, banks, insurers and funds managers have disproportionately low %'ages of women in board level management relative to the % of women among all employees. But, of the total workforce anyway only a minority are financial professionals and there is of course a very small % with line management and professional managerial roles. And, of these, only a tiny % number are bonus-earners (with the notable exception of Goldman Sachs where everyone seems to get some bonus however small in the case of most). What % of women get rich bonuses? In these highest earning echelons women are very under-respresented. We might also note too that in many financial services firms fully trained finance & banking professionals are a minority when they should be the majority? And therefore we can also ask whether professional training and conventional meritocracy based on trained knowledge are also unusually weak factors? How anyone gets to the top is questionable. And as we have seen in respect of understanding financial risk-taking the system works badly.
How the the untrained experts from other fields become top dogs in banking is a complicated story that many argue is responsible for the financial crisis.
Of course, in key jobs on which a business appears to depend critically 'representativeness' should be the least important of employment criteria.
That said, everyone knows and few dispute the "glass-ceiling" exists powerfully in gender bias. But, every prejudice and every trick in the book is bound to be operating at the top among those who are most competitive of all greasy-pole climbers. Under-representation of women is most important but only one of many biases that could be measured.
In finance among all sectors, according to Bloomberg, women score the the lowest in matching the %'ages of women managers to workers. This may be unsirprising to those who know the industry from the inside. We may all know some women managers, but it is surprising in a major services industry when in services generally women score highly in both junior and (relatively) in senior jobs. Perhaps in another generation the data may improve significantly for women at the top? Curiously the "materials sector" that includes mining companies, women are scored ebst in balancing its female workforce and directors, though in that industry just 18% of workers are women, while in finance they are 51% of total workforce.
Women are frequently overlooked in promotion stakes. They get less mentoring and sponsorship than male peers, according to Mervyn Davies, ex-CEO of Standard
Chartered Plc in a government sponsored report. He says the low number of successful female role models often compounds stereotypes.
We might consider asking the question therefore who by gender gets the bonuses in the bonus culture game? We haven't heard much if anything at all of women getting hard-to-square-to-total bank-performance big bonuses. One reason is that they probably don't get guaranteed bonuses to begin with (golden hellos in employment contracts).
Guaranteed bonuses should of course be classed as salary cost and not as "bonus". That would transform some firms' reported cost-ratios. Prime broker traders and their pit bosses are never women. I wonder what women employment is like in hedge funds - a few have had women CEOs (last time I looked).
Another question could be to ask what information is available internally in financial firms re. bonus distributions - probably none. The only information among colleagues is what comes out in media coverage (very general and very few names). What detail is reported to shareholders? - again little or nothing except a line item in AGM papers and annual reports?
One may wonder if bonus-culture is a boys-club device that in no small part disguises wage inequalities also between genders? Among all other reasons to complain about appropriateness of the bonus system gender inequality should be another - a matter too for the equality-police as well as for regulators, share & stock- holders and politicians?
In my view
- guaranteed bonuses should be separated from variable bonuses in the accounts.
- risk ratio amounts in bonus-earners' deal records should be proportionately subtracted from bonuses and withheld until risks in deals mature (are realised).
There is a fear of traders and other star bonus performers migrating if restricted in any one regulatory juridiction. CEOs can rarely change their employer and also their country of domicile. Lower ranked stars can do so much more easily. But allhave, most probably, an exaggerated idea of their individual worth and under-estimate the brand they work for, its long term relationships and the value of its capital. But, of course, so far, the moral and other pressure for lower bonuses is a voluntary not a mandatory requirement on management boards.
Regulators have the power under Basel rules irrespective of politicians wishes to make lower or zero bonuses mandatory on any bank. As I have argued elsewhere it is like awarding massive earnings only to goal-scorers on a football team and relatively little to the rest of the team including goal-keepers and defensive backs. But the regulators, when assessing whether to intervene in these matters, are also thinking often about their future careers outside regulatory work among the firms they regulate. That regulators (both internal and external to banks and other financial firms) should have wholly separate career paths is part of Basel rules but these like some equally important other rules are very rarely respected. Regulations and company law and suchlike say nothing of course about gender equality. That is just another morality idea about fairness and social responsibility that banking in general considers to be merely a PR exercise at best with the least priority in an industry so universally despised?
