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EU Banks Lag on Gender Diversity: Almost Half Lack Female Directors
23 Apr
Summary
- Nearly half of EU banks lack any women in executive director roles.
- Women in EU finance earn 17% less than their male counterparts.
- Firms with mixed-gender boards show higher profitability than all-male boards.
As of 2024, nearly half of the 850 banks and investment firms surveyed by the European Banking Authority (EBA) lack any women in executive director positions. This significant gender diversity gap means a substantial portion of the EU financial sector is not meeting regulatory requirements.
Across the sector, women represent only about one-fifth of executive directors and face a considerable gender pay gap, earning 17% less than their male colleagues. While some prominent female leaders exist, the overall progression of women into senior roles has been slow, trailing behind the UK and US.
The EBA's analysis highlights a strong correlation between gender diversity and financial performance. Companies with mixed-gender management teams reported a weighted average return on equity of 12.8%, substantially higher than the 7.4% return seen in firms with single-gender executive boards.
Despite EU rules mandating diversity policies and targets, about one-fifth of assessed companies had no diversity policy, and a third failed to set quantitative targets for female representation. The EBA urges national regulators to consider supervisory measures against non-compliant firms, as progress in recruiting women to executive roles has been minimal, with women filling just over 26% of vacancies between 2022 and 2024.
