THE gender pay gap is widening for Europe’s non-executive board members in the financial services sector, despite a drive to recruit more women to these senior roles.
Women were paid 36 per cent less than men on average in 2023 on the boards of banks, insurers and asset managers, compared with a 31 per cent disparity in 2019, according to analysis by the consultancy EY.
Pay for both men and women joining boards increased during that time but it has risen faster for men, the study found.
The widening pay gap is a “red flag”, according to Kate Grussing, managing director of Sapphire Partners, a headhunting firm that specialises in finding diverse candidates to fill senior roles.
The reasons for the disparity are complicated. It may be because women are being placed more often into less important board member roles, according to Grussing. Another reason is that male directors have more C-Suite experience than their female counterparts by the time they are appointed to a board position, according to EY Global Financial Services Leader Omar Ali, and men are also more likely to be tapped for multiple committee seats.
Boards “need to have a careful eye on pay discrepancies that can result, for example, if women are predominantly in what are perceived as lighter touch committee chair roles”, Grussing said.
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The findings comes as companies in the European Union are rushing to meet a June 2026 deadline to achieve 40 per cent female representation on their boards and 33 per cent across executives and non-executive roles. The rule – set by the European Commission in 2022 – requires large public companies to meet the objective, with potential penalties imposed on those that do not.
At the moment, 28 per cent of European financial services firms analysed by EY fall short of the target.
Women are being paid less when serving on board committees such as audit and nomination. Female committee chairs are earning half of what their male counterparts are making and committee members are receiving 75 per cent compared with men in those roles.
EY’s latest European Financial Services Boardroom Monitor measures 2023 pay data – the most recently available – at nearly 90 companies in Europe including the UK.
Tara Cemlyn-Jones, a former investment banker who leads 25×25, a London-based women’s leadership advocacy group formed to help boost the level of female talent at the top of British companies, said that not enough women are being appointed to executive roles, which is creating a perceived deficiency in their experience in selections for more senior non-executive roles.
The gender pay gap among non-executives is “disappointing and staggering” nearly a decade after the launch of the review by Philip Hampton and Helen Alexander to get more women into top roles at companies, Cemlyn-Jones said.
Meanwhile, in the US and Canada, the gap between male and female boardroom pay narrowed in 2023 from 2019, to 5 per cent from 7 per cent, EY found. Women also made almost as much as men when they were appointed to chairs or members of board committees in North America. BLOOMBERG
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Publish date : 2025-01-12 14:29:00
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