EY report highlights gender gap and evolving C-Suite demands

The latest EY European Financial Services Boardroom Monitor reveals a concerning trend in the gender split among boardrooms of Europe’s largest financial services firms.

Amid a growing demand for C-suite experience, the appointment of female directors has seen a significant decline, raising questions about the progress of gender diversity in the industry.

In 2023, the appointment of female directors to Europe’s largest financial services firms fell by seven percentage points year-on-year. The report shows that 44% of all appointments last year were women, down from 51% in 2022.

Despite all monitored firms having female representation at boardroom level, the current gender split stands at 57% male and 43% female. This is a decline from the 58:42 ratio in 2022.

Furthermore, 31% of listed European financial services firms are still reporting under 40% female representation in their boardrooms, falling short of the European Commission’s directive for a 40% female target for non-executive boards or 33% for all board members by June 2026.

For CFOs, understanding this trend is crucial. Diversity in boardrooms is not just a matter of equity; it’s also a business imperative. Diverse boards are better equipped to navigate complex markets, understand customer needs, and foster innovative thinking.

The decline in female board representation can be a red flag, signaling a potential disconnect between the firm’s governance and the evolving marketplace.

Actionable Insights for CFOs

CFOs should advocate for a proactive approach to ensure gender diversity in their boardrooms. This includes:

• Encouraging mentorship and development programs for high-potential female leaders.
• Re-evaluating recruitment strategies to broaden the pool of female candidates with C-suite potential.
• Implementing unbiased performance measurement criteria to identify potential board members.

Demand for C-Suite experience

The demand for C-suite experience has been a significant factor in board director recruitment in 2023. A total of 59% of all directors appointed in 2023 brought C-suite experience.

However, only 38% of these were female, down from 47% in 2022. This trend suggests that while there is a growing demand for C-suite experience, female directors with such experience are not being appointed at the same rate as their male counterparts.

For CFOs, this trend underscores the need to build a robust talent pipeline that ensures women are gaining the necessary experience to step into C-suite roles. It’s not enough to have diversity goals; firms must actively work to create pathways for women to gain relevant experience.

Actionable Insights for CFOs

• Develop internal leadership programs focused on equipping high-potential female employees with C-suite relevant skills.
• Foster a culture that supports and recognises the advancement of women into senior roles.
• Collaborate with HR to identify and address any systemic barriers that hinder the progression of female talent into executive positions.

In-demand skills and expertise

The report also highlights the most in-demand skills and expertise for board directors. In 2023, 36% of all directors appointed brought political experience, down from 41% in 2022.

Tech experience saw an increase, with 27% of directors appointed having this skill, up from 22% in 2022. ESG/sustainability skills and experience saw a slight decrease, with 22% of directors appointed having this expertise, down from 23% in 2022.

For CFOs, these trends in skill demand are indicators of where the industry is heading. A board that lacks tech expertise might struggle in a digitally-driven market, while underemphasising sustainability could lead to reputational risks and missed opportunities in a world increasingly focused on ESG principles.

Actionable Insights for CFOs

• Assess the current skill composition of the board and identify gaps in tech and sustainability expertise.
• Advocate for board refreshment strategies that align with future industry trends, including digital transformation and sustainability.
• Foster a culture of continuous learning within the board to stay abreast of evolving market demands.

 

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