Magazine article Public Finance

At the Top

Magazine article Public Finance

At the Top

Article excerpt

The arguments for a diverse workforce have largely been won. Research by McKinsey &. Company has shown that businesses with more diverse teams at the top are more likely to be financially successful. As the Treasury's Women in Finance Charter, launched in March, puts it:

"A balanced workforce is good for business - it is good for customers, for profitability and workplace culture, and is increasingly attractive for investors."

In the public sector, the drivers are slightly different. Public bodies have an equality duty, in force since 2011, that requires them to have "due regard" to the need to eliminate discrimination, advance equality of opportunity and foster good relations between different groups when carrying out their activities. Stuart Elrick, secretary of the Public Service People Managers' Association, says: "People in public service know that to help understand the communities they serve, it's good to have people from these communities working for them."

Yet the upper reaches of public finance remain strikingly male and white. So why are so few women and ethnic minorities reaching the top? And what can be done to change this?

The problem isn't a dearth of talent at the lower levels. More than 40% of undergraduates admitted to accountancy courses in 2015 were women, according to admissions service Ucas, while a 2014 report from the Financial Reporting Council showed that 32% of CIPFA members and 45% of Acca members were female. Ucas does not publish ethnicity figures for individual subjects but, in the broad area of business and administration, about 40% of undergraduates come from black and minority ethnic (BME) backgrounds.

It's hard to obtain a clear picture of what happens to graduates after they enter the public finance workforce. In the civil service, women do relatively well, although there are more at the bottom than at the top: 58% of those in administrative and assistant grades are women, compared with 39% at the highest senior civil service (SCS) grade. A report from EY this year found that three government departments had roughly equal numbers of men and women at SCS grades, partly as the result of a series of initiatives to improve diversity, the latest of which is the Talent Action Plan, launched in 2015.

Ethnic minorities, however, are under-represented in the civil service: 11% of civil servants come from a BME background, compared with 13% in the UK population as a whole. The picture is worse at the top: only 7.2% of those in the senior civil service are from BME backgrounds.

It's a different story in the private sector. A 2014 survey by Green Park Public Service Leadership found that ethnic minorities were better represented in leadership roles in the FTSE 100 than they were in equivalent roles at public bodies.

Paul deal, a partner at PwC, says this is a consequence of the global nature of private finance. "The civil service has a much more British than international culture," he says. "Local government is the same. So you're recruiting from a different pool than the international private sector in the City."

Efforts to improve diversity at the top must begin with data collection, deal says: "Numerical evidence is a good way of focusing the organisation." Data shows the scale of the problem and helps to pinpoint where it starts.

Dianah Worman, research and policy adviser on diversity at the Chartered Institute of Personnel and Development, says: "If you start with a good balance at the beginning, in terms of recruitment, when does it start to skew? How does it happen? It may be informed by things like the kinds of work people do, whether it's the kind of work that's perceived to be important to get to the next level up."

Collecting and measuring data makes it possible to take the next step: target setting. This can be remarkably effective: Lord Davies' 2011 report on gender diversity in the boardroom said that FTSE 100 boards should double female representation from 12. …

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