Europe’s Gender Pay Gap Widens on Corporate Boards
In a concerning trend for gender equality in corporate leadership, Europe has seen a widening gender pay gap among non-executive board members in the financial services sector, despite efforts to increase female representation in senior roles. According to a recent analysis by the consultancy EY, women on boards of banks, insurers, and asset managers were paid 36% less than their male counterparts in 2023, up from a 31% disparity in 2019.
Expert Insights on the Pay Disparity
Kate Grussing, managing director of Sapphire Partners, a firm specializing in diverse executive placements, highlighted the widening pay gap as a “red flag” for the industry. She pointed out that while pay increased for both men and women joining boards, the rise was more significant for men. Grussing suggested that women may be placed more often in less influential board roles, contributing to the disparity.
EY Global Financial Services Leader, Omar Ali, noted that male directors often have more C-Suite experience than their female counterparts when appointed to board positions. Additionally, men are more likely to hold multiple committee seats, further exacerbating the pay gap.
Challenges in Achieving Gender Equality
As European companies strive to meet gender diversity targets set by the European Commission, the gap in female representation on boards remains a significant challenge. Currently, 28% of financial services firms in Europe analyzed by EY fall short of the 40% female representation goal.
Tara Cemlyn-Jones, a former investment banker leading a women’s leadership advocacy group in London, emphasized the importance of appointing more women to executive roles to enhance their experience for senior non-executive positions. She described the persistent gender pay gap on boards as “disappointing and staggering” nearly a decade after initiatives to boost female representation.
Comparative Analysis with North America
In contrast to Europe, the gender pay gap on corporate boards in the US and Canada narrowed from 7% in 2019 to 5% in 2023, according to EY findings. Women in North America also earned comparable salaries to men when appointed as chairs or members of board committees.
Overall, the data highlights the ongoing challenges in achieving gender parity in corporate boardrooms, underscoring the need for continued efforts to address pay disparities and enhance female representation in senior leadership positions.