Michael D'Arcy, Minister of State at Department of Finance and Public Expenditure and Reform, tells us about the future for Irelands' women in finance.
In March 2016, the UK government launched the HM Treasury Women in Finance Charter to encourage the financial industry to improve gender balance in senior management. One of the main commitments of Irelands new Ireland for Finance strategy is to develop a similar Charter for Ireland, as one of seven headline actions.
To find out more, we caught up with Minister Michael D'Arcy TD, Minister of State at Department of Finance and The Department of Public Expenditure and Reform with special responsibility for financial services and insurance. He told us the background to this commitment and plans for the Charter's preparations.
Please can you tell us about how you got into your role?
My first political office was as a councillor on Wexford County Council, to which I was co-opted in 2003. I retained my seat on the Council in the local elections the following year. I also served as a Director of Wexford County Enterprise Board. I was first elected to the Dáil in May of 2007. I served in the Seanad between 2011 and 2016.
I was my party’s senior senator on the special Oireachtas Banking Inquiry Committee in 2014, which examined the causes of Ireland’s banking crisis, and the identification of measures to ensure that the country would avoid a similar development in the future.
In June 2017, I was appointed Minister of State at the Department of Finance, with special responsibility for financial services and insurance.
What is Ireland's Women in Finance Charter, and what does it entail?
There is an increased regulatory focus both in Ireland, and internationally, on the issue of culture in financial services decision making. Culture, and within culture, diversity and inclusion, are also important elements of industry perception, and attractiveness to talented employees. I believe it is vitally important that this focus should be considered in efforts to promote Ireland’s financial services sector internationally.
Research carried out by the Central Bank of Ireland (CBI) has shown that approximately 80% of the most senior and influential appointments in regulated firms in Ireland between 2012 and 2016 were male. These figures demonstrate a significant gender imbalance in the submitted Pre-Approval Controlled Functions (PCF) applications, and indicates a continued lack of diversity at the most senior levels of regulated firms. PCF applications from females increased to 22% in 2017 and to 24% in 2018. Although the figures are moving in the right direction, I am concerned about the lack of progress in this area.
Financial Services Ireland (FSI) has also acknowledged that having a workforce that represents the general population of people in Ireland makes sense. Diversity in the workforce includes, but is not limited to gender, race, age and sexuality. Gender diversity and inclusion featured in our IFS2020 strategy, but further progress is needed. The 30% Club Financial Services Sub-Committee report in Ireland of 2018 has recommended practical solutions. We are continuing to engage with organisations such as the 30% Club and other entities in the diversity and inclusion space.
Are there any plans for the preparation of Ireland's Women in Finance charter that you can share with our readers?
The Women in Finance Charter is one of seven actions for 2019 that are prioritised as Headline Actions in the 2019 Action Plan for Ireland for Finance – it is action measure no. 5 of 51 actions. I think a very important point is that the Industry Advisory Committee (IAC), which consists of representatives of Irish and international IFS companies, has agreed to be the lead organisation for developing the Charter. That means that the financial services industry itself will have ownership of the Charter and that it will be drafted by people with knowledge of how firms and the sector work.
The Charter will be developed this year, and a number of IFS companies will be invited to sign it by the end of each of 2019, 2020, and 2022. In June, the IAC provided me with an update on their work on the Charter. Two members of the Committee are taking the lead on this action and will be bringing their work to the upcoming meetings of the IAC.
What impact do you hope Women in Finance Charter will have on Ireland's financial industry?
I believe that by taking ownership of this Charter, IFS companies will work proactively with the Government to raise greater awareness of the need for action in this space. This will involve reviewing progress and continual learning from what works and doesn’t work in the sector.
CBI research has consistently shown that companies with a significant proportion of women in senior management positions perform better, in part because of some leadership behaviours that women exhibit more consistently than their male colleagues. In particular, women excel in the area of people development, participative decision making, presenting a compelling vision and acting as role models – all drivers of financial performance.
This will also help achieve another goal, by ensuring that the culture of our IFS sector in Ireland is strong, and that Ireland is recognised as a diverse, people-friendly place in which to work and live. A key priority will be the push for the greater diversity of talent in the sector. This goes beyond the number of women in the workplace or in leadership; it will also seek to improve the diversity of age, ethnicity, sexual orientation, education, background, nationality, disability, beliefs, and more.
How can we ensure more women hold more senior roles in Ireland's finance sector?
Research on board membership has shown that female directors enhance board independence, partly because women bring different perspectives and networks to the table, and partly because they are more likely to ask difficult questions. There is also evidence of a point of critical mass – when there are at least three out of 10 women on the board.
With this in mind, I have welcomed the establishment of the Better Balance for Better Business, which is a new business group to recommend on how more women can be involved in decision-making at the top level of businesses in Ireland. It was launched by the Government and senior business leaders in July 2018.
I also value the experience of women who have left the workforce and may be interested in returning to it. It is accepted that due to childcare or other care obligations, many people, but particularly women, leave the workforce for a period of time. This includes the 50+ generation, many of whom have left the workforce for a while. The Government is committed to offering greater support to enable women to return to work, which, includes encouraging all generations and age cohorts.
Finally, what can our readers, as individuals, do to push for gender diversity and help their organisations fight for the right teams of people?
There are no simple answers to this question. A lot depends on the role of the individual and the influence they have within an organisation. Success in this area will depend on leadership from the top down. Human resources sections play a critical role in gathering the relevant data to inform strategies in the space. Ideally, this strategy should be regularly reviewed by the Board, and revised in light of real experiences. Readers can encourage their firm to adopt the Charter when it is published and to dedicate resources to implementing it.
It has been noted that for every extra women appointed “one changes the conversation and the lived experience of those who are making the decision”. It is only by passing on this lived experience from generation to generation that we will continue to benefit from increased female participation in the finance sector.
Minister Michael D'Arcy TD will be speaking about the development of Ireland's Women in Finance Charter at Women in Finance Dublin 2019, 12-13 September 2019. After sell out events in the UK, Australia and Europe, places are limited, get yours now to avoid disappointment.