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Financial majors sign up to link executive pay to gender diversity

Multiple International financial services firms have signed up to a new U.K. government charter designed to improve gender diversity in senior positions within the sector. 

The charter, which 72 firms have signed, commits companies to linking the remuneration packages of their executives to gender diversity targets and was unveiled at the London Stock Exchange on Monday. It also commits firms to setting out internal targets for gender diversity in senior management, publishing progress reports and appointing a senior executive responsible for gender diversity and inclusion.

The firms that have signed up span sectors including insurance, retail banking, asset management, mutual funds and FinTech. These include banks like Deutsche Bank, Barclays, Credit Suisse, Aberdeen Asset Management among others. Financial trade bodies such as the U.K. Treasury, the U.K.'s Financial Conduct Authority and a few others have also signed the charter. A full list of signatories is available here.

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The charter was based on recommendations set out in the Jayne Anne Gadhia review, which was launched at the Bank of England in March this year. The review found U.K. financial services were male-dominated, with female representation on boards at around 23 percent and on executive committees at around 14 percent.

"I am delighted by the large number of financial services firms who have signed the HMT Women in Finance Charter," Jayne-Anne Gadhia, the chief executive of Virgin Money, said in a statement released by UK Treasury.  "They include firms from across the U.K. financial services sector, with large investment banks, retail banks, asset managers and insurers amongst the signatories."

Some firms have already set targets for female inclusion, such as the Royal Bank of Scotland, which was one of the charter's signatories. 

"We have set targets to have at least 30 percent women in leadership roles by 2020 in every one of our franchises and we're aiming for full gender balance in all areas of our business by 2030," Marjorie Strachan, head of inclusion at the Royal Bank of Scotland, said in a statement. 

The U.K.'s Hermes Investment Management, which has £24.1 billion (£18.5 billion) of assets under management,  was another signatory. 

"I find it absurd that while senior executives may have sympathy with the social case for achieving a greater mix within their businesses, few see it as a necessity for achieving the right balance of growth and risk management," Saker Nusseibeh, chief executive of the institutional asset management firm, said in a statement. 

"The truth is that companies should be nurturing and growing their pipeline of talent and with women making up 50 per cent of this possible pool, to ignore them is value destructive," he added. 

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