Just over year ago, spurred by the Young Foundation’s report on gender-lens investing, a number of organisations including Big Society Capital committed to better understand the extent of diversity within social investment.
As an organisation focused on helping address inequalities and disadvantage through our work, promoting diversity and inclusion in its broadest sense should be an important part of this. As a first small step, in our published transparency data we encouraged our intermediaries to report on which of their investees have female CEOs. So far, we’ve been able to collect this data for less than 10% of the investee organisations – which shows we need vastly better data on the make-up of our sector.
To start building this picture, in partnership with the Social Impact Investors Group, we sent out a survey to gather data on diversity from those working in social investment. We received 227 responses for 32 different organisations, including intermediaries, financial institutions, charities and social enterprises, and consultancies.
Even from this small and imperfect sample, we can see that the emerging picture is not bright.
Where are our female leaders?
At the management level and operational / working level our sample suggests we have a balanced gender split, with 52% and 56% female representation respectively. Without knowing the data for how many women apply for management roles and are successful, we can perhaps be encouraged by the relative gender balance at this level.
The challenge comes at the Executive and Leadership level. Here we see just 28% female representation. There is a clear drop off in women either transitioning or being hired into these decisions making levels which is troubling. This appears to be less marked at Board level, where we see female representation of 38%.
This pattern of relative gender inclusion at Board level and poorer representation at Exec level is reflected in the wider financial services sector, where around 14% of Executive Committee members are women [1], with 20% on Boards [2]. Compared to the wider financial services sector, we may be doing a little better. Data from ACEVO suggests charities are doing better still – women CEOs now outnumber men by 58% to 40% [3] for the first time.
If we assume as a sector, we are more likely to encourage internal progression, the gender balance at managerial levels gives some hope for optimism in the longer term. But the relative lack of women in Executive role is stark and a call to action for us all. We can no longer say that gender inclusion is not a problem in the social investment market.
A bleak picture for Black, Asian and Minority Ethnic (BAME) inclusion
There is even further for us to progress here – we have 30% BAME representation in operational roles (compared to around 14% at the national level, and broadly in line with figures for non-white British representation at this level in London). From this, we see a significant dip in transitions to management roles with just 9% representation (again, below national averages), with a slight rise up to 21% in Executive roles.
This lack of transition from operational roles into management positions is a real concern (even more so if we hold the assumption that we do more internal recruitment). Under representation of BAME is a huge problem for the charity sector more widely: over half of charities in the top-500 have ‘all-white governance’. Out of a total of 5,988 trustees listed by the Charity Commission just 6.3% of trustees are from BAME backgrounds [4].
How do we move forward from here?
These results kick-started important discussion at The Gathering of social investor in February. A cross-sector working group has now come together (including representatives from The Joseph Rowntree Foundation, Social Finance, SASC, Big Society Capital, the Access Foundation, Power to Change, TSIP, TSIC and Right to Succeed). As a group we are committed to raising the profile of diversity and inclusion and supporting each other in taking our first steps in what is a long but essential journey.
We will focus on better understanding what is driving these results, and mapping out actions (no matter how small) we can all start taking today. This could include following the lead of peers like ClearlySo who recently signed up to the Treasury- led Women In Finance Charter that commits firms to supporting the progression of women into senior roles and publically report on their progress.
We need everyone’s input to drive change and have called on all intermediaries in our portfolio to identify an individual to be part of this group (a ‘Diversity Champion’).
If you’d like to be involved in the diversity working group, please contact Danyal Sattar (Danyal.Sattar@jrf.org.uk).
The full version of the diversity survey results are available here.
[1] Oliver Wyman, Women in Financial Services, 2016
[2] Ibid