Female directors at the UK’s largest financial services firms earn on average two-thirds less than their male counterparts, new research shows, underlining the pay gap that still exists between men and women at the highest levels in the financial sector.
Average pay for female directors at financial services companies stands at £247,100, 66% lower than the average £722,300 paid to male directors, according to research by employment and partnership law firm Fox & Partners.
The significant gender pay gap at firms listed on the FTSE 100 and 250 stock indices suggests there has been slow progress in recruiting women to more senior, higher-paid executive positions.
The vast majority (86%) of the female company directors occupy non-executive roles, according to the research, which tend to be lower paid than executive positions, and involve less day-to-day responsibility for running the business.
The revelations come just days after the final report in the government-backed Hampton-Alexander review into female representation in business showed that women now hold more than a third of roles in the boardrooms of Britain’s top 350 companies.
However, men still dominate the highest levels of business, and the review fell slightly short of its second major target of reaching 33% representation of women on FTSE 350 leadership teams, including positions on executive committees.
The Fox & Partners research underlines that firms are willing to give non-executive roles to women to improve board diversity, but are not appointing them to better-remunerated leadership positions, which also exert more influence within the company.
“Boards need to be open to challenging themselves by asking honest questions about the barriers in their organisation that might prevent women reaching the very top,” said Catriona Watt, a partner at Fox & Partners.
“To see long-term change, firms must be committed to taking steps that will lead to more women progressing through the ranks, getting into senior executive positions and closing the pay gap,” she said.
One way for firms to promote change would be by signing up to the government’s women in finance charter, under which companies pledge to promote gender diversity by setting internal targets for this in senior management and publishing annual progress reports on the number of women in leadership roles.