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City AM blog: Pathways to progression through socio-economic inclusion

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Reshaping the makeup of corporate leadership will help instil a culture of progression

Socio-economic diversity seems to garner little specific attention as an element of corporate strategy, with the makeup of financial institutions rarely reflecting the wider public.

Yasmine Chinwala, OBE, is a partner at capital markets think tank New Financial. She leads its diversity and culture programme and works closely with HM Treasury to monitor the progress of signatories to the Women in Finance Charter – work that places her at the heart of understanding about how to improve progression pathways.

Likewise, Chris Woolard, CBE, is a financial services partner at EY, and Chair of its global financial services regulation network. Most recently, he was acting CEO of the Financial Conduct Authority (FCA), where he worked for eight years in senior leadership roles across strategy, competition, and financial technology.

Chris grew up on a council estate in south-east London and attended a local comprehensive before becoming the first member of his family to study at a university, representing a lived experience that is a rarity within corporate boardrooms.

Underpinning both guests’ work is a clear desire to create a more representative financial sector. Yasmine is a member of the recently launched Socio-Economic Diversity Task Force – a new independent group set up by the City of London Corporation.

“What it’s really trying to achieve is an increase in socioeconomic diversity at senior levels in professional and financial services across the UK,” explains Yasmine. 

Her view is that the industry’s existing efforts to improve socio-economic representation have primarily been focused on “point of access”, or simply getting individuals through the door.

But Yasmine’s current emphasis focuses on pushing the discussion further to focus on progression, making sure that once people from under-represented groups are in a business, they can progress further, and fully.

“Understanding their experiences, their journey, and what they’re bringing to the organisation far more clearly” is the driving force behind Yasmine’s work.

Changing the demographics of leadership roles is a tall order. Chris says that around 89% of senior financial roles are held by people whose family has a professional background.

“If you look even at CEOs in the wider UK market,” Chris says, “about 52% of them come from that background. There’s a huge disparity here about who gets on within financial services and professional services in the UK, and who really does make it to the top.”

The makeup of ‘the top’ has been in the spotlight for some time now, particularly focused on women. For example, the Women in Finance Charter aims to increase female representation in senior management, and created a framework for effective dialogue, governance and accountability of female representation. However, social mobility is still a “very new discussion” for the financial sector.

The Charter’s work is committed to gathering female representation data. Organisations have long held employee data but using it to determine the extent of shortcomings in representation is fairly new, overcoming a “big stumbling block to this discussion,” as Yasmine explains.

All of this is in an attempt to make leaders more representative and reflective of the businesses they run and the customers they serve – something that delivers considerable and broad benefit to any and every organisation. Yet currently, leadership roles are often filled from a narrow pool of candidates, calling into question the role and efforts of the headhunter themselves. 

“All you’ve done is put the sisters of the brothers who are already on the board, on your board,” says Chris.

But a broader, intersectional view of the issue reveals that the socio-economic factor further brings to light other extensive inequalities as Chris shares his concerns that the “rate of progression” for black and minority employees within an organisation is significantly slower than white, economically privileged people.

But good, thoughtful and progressive leaders do exist. They are reshaping the way corporate cultures are embodied, from the top down, and for the benefit of all.

Chris says that the pandemic shone a light on the value of true leadership: “I think you cannot understate the role that good leadership has played in this crisis. If you look at the organisations that have come through it best, they have had that strong, enlightened leadership within them.

“This is a chance to get a genuine diversity of thought [and] spirit around the table making decisions and driving firms forward at a time when getting that fresh blood, getting that fresh talent has never mattered more.”

The perspectives of Yasmine and Chris are not necessarily entirely unique, but a rarity at the top of the corporate world. Filling businesses with a broad scope of culture and experiences can enrich an organisation in a way that better serves employees and customers. And ensuring that top positions are not routinely filled by people from the same pool will create an environment where under-represented employees – and the businesses they work for – can truly flourish.

You can listen to the full podcast here.