The 2018 FSC report Towards Prosperity showed only 8% of women make up key personnel in KiwiSaver funds management and only 21-25% of women are employed in senior roles in professional financial services.
New Zealand has only two companies in the top 100 of the international Equileap 2024 Gender Equality Report & Ranking.
In the third of our Money Month series, co-founder of Hi Money and Project Gender, Angela Meyer, shines a light on the state of New Zealand women’s financial lives.
OPINION
“I’m looking for a man in finance, 6′5″, blue eyes, trust fund,” sings ayoung woman in a recent social media trend. Flash mobs featuring these stereotypical “men in finance” dancing outside financial districts in the UK and the USA have gone viral. But behind every good joke lies a truth: the financial system remains overwhelmingly controlled by a specific group – men – leaving women and other under-represented groups on the fringes.
This exclusion has significant real-world consequences. The allocation and management of capital and resources – the way money is spent and invested and by whom – has profound implications for everyone, and the lack of diversity in those decision-making roles impacts all of us.
While the most recent data (2018) from the FSC report Towards Prosperity showed good representation of women in the industry overall, only 8% of women make up key personnel in KiwiSaver funds management and only 21-25% of women are employed in senior roles in professional financial services – stats that underscore the industry’s need to address the systemic issues that have long excluded women from holding senior positions.
A recent Cogo/Shift report Shifting the Dial on Diversity commissioned by the Institute of Financial Professional New Zealand (INFNZ) spoke to female stakeholders about the barriers that continue to prevent women from advancing to senior roles in finance.
Only 8% of women make up key personnel in KiwiSaver funds management in New Zealand. Photo / 123rf
The report heard from senior finance leaders that recruitment practices in the sector often favour men, sidelining women from the start of their careers. Other themes include that the industry’s traditional and exclusive image discourages women from entering and a lack of inclusion further prevents them from staying in the field. Networking opportunities tend to benefit men, while penalties for taking career breaks for childbearing and rearing compound the disadvantages women face in advancing their careers.
This is where the “S” in ESG – Environmental, Social, and Governance – comes into play. The “S” specifically refers to social factors, including how companies treat their employees, ensure their safety and wellbeing, address gender equality, close gender pay gaps and maintain labour standards within their supply chains. The social aspect of ESG is about getting people – employees, consumers and local communities – into business practices.
While many organisations have made strides in environmental sustainability (the “E”) and governance (the “G”), the “S” often lags behind, despite being the only letter in the acronym that directly addresses people. In New Zealand, for example, the absence of mandatory pay gap reporting and the disbanding of the Pay Equity Task Force mean that there is not a lot of pressure on companies and the Government to address these issues. It can easily go on the “maybe” list rather than being prioritised for the “to do” list. This lack of transparency keeps gender disparities hidden.
New Zealand has only two companies in the top 100 of the international Equileap 2024 Gender Equality Report and Ranking. The report reveals progress mixed with major challenges, highlighting the need for more robust measures domestically. As the old saying goes, “what gets measured gets managed”.
Yet there are legislative advancements in other countries which offer examples of what can be done:
European Union: In March 2023, the European Parliament passed the Pay Transparency Directive, requiring companies with more than 100 employees to report gender pay data within three years.
Australia: In February 2024, the Workplace Gender Equality Agency published private sector gender pay gaps, resulting in widespread shock by consumers and fast-tracking of accountability by companies. In Australia, companies must have a gender equity action plan.
Japan: Since July 2022, companies with more than 300 employees must disclose gender pay gap data, increasing reporting compliance significantly.
The lack of a gender lens in our financial ecosystem reflects broader societal issues. But with concerted efforts toward inclusive policies and transparent reporting, we can create a more equitable financial landscape. The financial industry stands on the brink of a significant shift. Over the next two decades, an estimated $68 trillion is expected to be passed down from the Baby Boomer generation to their heirs, with women set to inherit a substantial portion of this wealth. This “Great Wealth Transfer” presents a critical opportunity for the financial sector to take women seriously. As women gain more financial control, their preferences and priorities will shape investment strategies, consumer behaviour and economic policies.
But for this shift to be meaningful, the financial industry must pull up its socks. It needs to become a competitive and attractive industry of choice for women.
This requires recognising and addressing the needs of all stakeholders, promoting gender equity, and embracing diversity in all its forms. The INFNZ report also offers suggestions of ways to increase the numbers of women in the financial industry.
The “Great Wealth Transfer” is a once-in-a-lifetime opportunity to reshape the financial industry in a way that truly serves everyone. By getting people – especially women and underrepresented groups – into ESG practices, we might just see more women in finance.
As investors (if you’ve got a KiwiSaver account, you’re an investor), we can ask for change and accountability from our fund managers and KiwiSaver providers to better understand how the social aspect (the “S”) of ESG is being managed.
Angela Meyer, co-founder of Hi Money and Project Gender.
Here are 10 questions to consider asking.
Employee wellbeing: How does the company measure and ensure the wellbeing of its employees? Are there programmes in place to support mental health, work-life balance and career development?
Diversity and inclusion: What policies and initiatives does the company have to promote diversity and inclusion within the workforce? How does it track progress in these areas, and what are the current metrics on gender, ethnicity, and other forms of diversity?
Gender pay equity: Does the company conduct regular gender pay-gap analyses? If so, what are the results and what steps are being taken to address any disparities?
Labour standards in supply chains: How does the company ensure that its suppliers adhere to fair labour practices? Are there audits or certifications in place to verify compliance with labour standards?
Support for working parents: What policies are in place to support employees who are parents or caregivers, such as parental leave, flexible working hours or child care assistance?
Employee engagement: How does the company measure employee engagement and satisfaction? Are there mechanisms for employees to provide feedback and how is that feedback acted upon?
Community engagement: What strategies does the company use to engage with and support the communities where it operates? Are there programmes for local hiring, education or social investment?
Human rights policies: Does the company have a formal human rights policy and how is it implemented across its operations? How does the company address any human rights concerns that arise?
Transparency and reporting: How transparent is the company in reporting on its social impact? Are there clear and accessible reports available for stakeholders to review?
Board and leadership diversity: What is the composition of the company’s board and leadership team in terms of diversity? Are there initiatives to increase representation of under-represented groups in these positions?
