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TOP TIPS TO IMPROVE GENDER DIVERSITY IN INVESTMENT BANKING

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TOP TIPS TO IMPROVE GENDER DIVERSITY IN INVESTMENT BANKING

While there has been great improvement since Lord Davies set out the 25% female board-level target for theFTSE 100 by 2015 -which has been exceeded now at 26.1% – the big global investment banks are falling noticeably behind commercial and diversified banks with women representing just 16% of its board membership. The industry is clear there is much to be done on gender representation, the latest public commitment to change being via the HM Treasury backed ‘Women in Finance Charter’. The charter requires public reporting for transparency and accountability on progress, and committing to linking pay of the senior executive team to delivery against these internal targets. And while pay gap reporting is not yet formally legislated, the expectation is that the government’s“closing the gender pay gap” consultation will result in regulations on publishing gender pay gap information to come into effect as early as October 2016.

Harriet Baldwin, former economic secretary to the Treasury was reported to have said earlier this year that “financial services was the most highly paid sector, but also had the highest gender pay gap, at 39.5%, compared with 19.2% across the economy. This means that for every pound earned by a man in the Square Mile, a woman earns just over 60p. Clearly then, more needs to be done to address gender imbalance, in terms of representation and equality of pay in investment banking, but how can this be achieved?

Evolve corporate culture

More progressive firms are investing time in proactively understanding the realities of the current culture and working to build a truly inclusive culture of the future. This isn’t simply evidenced through adopting progressive policies, but through systematic initiatives to embed authentic leadership behaviours, on-going programmes of bias education, and investment in the development of female talent as some key examples. We know that women make choices against joining a business if they can see the barriers for their progression outside in, and see a heavily male-dominated old boys’ club mentality self-perpetuated by homogenous leadership and a resistance to adopt new ways of working.

Assessing barriers for both entry and progression for female talent, and looking at how the culture of the organisation (perceived and real) affects both acquisition and retention of women is key.  What is the female candidate experience throughout the recruitment process? Are we adopting longer term engagement strategies and affording women an extended period to get to know the business and understand both horizontal and linear career trajectories?  Are we coaching leaders in the inclusive behaviours and the flex needed to better accommodate the diversity that greater female representation in teams brings? Are we able to showcase leadership development efforts, a culture where talent is recognised and able to deliver high performance not measured by presenteeism?

Look beyond the typical talent pools

Once there has been a mind-set shift and the importance of defining an inclusive culture is understood, it’s important to consider looking at atypical pools of talent. The investment banking sector has a heritage of being heavily male dominated and challenging the business to think beyond typical time-to-hire metrics and resource efficiencies is essential if you are going to afford the time to truly invest in sourcing and engaging female talent. Working to identify atypical talent pools via returner programmes, or launching education programmes for hiring communities that mean applying skill adjacencies to consider slightly different profiles rather than opting immediately for the “as before” model, are good starting points. The process of understanding critical roles, skill shortages and robust resource planning is at the foundation of these interventions.

Reviewing internal mobility processes

Finally, investment banks need to have a serious look at current internal mobility and honestly assess where they could be letting women down. There are numerous studies suggesting inequality in promotional opportunities, with reports indicating a tendency for females to be passed over for moves in favour of their male counterparts.Research compiled earlier this year by Emolument.com for International Women’s Day revealed that in the banking arena, it will take a woman on average two years longer to become a managing director than it would a man. Is there real transparency around internal opportunity, or do we “advertise” opportunities internally that are in reality already locked down? Are we losing female talent due to a sense of being trapped and undervalued, or do we lean on the arguments of balance and family to justify female attrition? Transparent, fair, meritocratic internal mobility processes need to be sustainably audited, monitored, and sadly policed if we hope to improve the retention and progression of female talent across all career bands.

The value that female talent brings to investment banks isn’t in question, and the business case for gender diversity is clear.There is no silver bullet, and we need to work at a cultural change level and persist in both acquisition and retention efforts to bring about the shift we want to see in the industry. The tips above should at minimum support in motivating the much needed momentum for the investment banking industry.

  • Aimee de Carcenac, Consulting Lead, Diversity & Inclusion, Alexander Mann Solutions

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Battling Covid collateral damage, Renault says 2021 will be volatile

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Battling Covid collateral damage, Renault says 2021 will be volatile 1

By Gilles Guillaume

PARIS (Reuters) – Renault said on Friday it is still fighting the lingering effects of the COVID-19 pandemic, including a shortage of semiconductor chips, that could make for another rough year for the French carmaker.

Renault reported an 8 billion euro ($9.7 billion) loss for 2020 which, combined with gloomy take on the market, sent its shares down more than 5% in late morning trading.

“We are in the midst of a battle to try to manage a difficult year in terms of supply chains, of components,” Chief Executive Luca de Meo told reporters. “This is all the collateral damage of the Covid pandemic… we will have a fairly volatile year.”

De Meo, who took over last July, is looking at ways to boost profitability and sales at Renault while pushing ahead with cost cuts. There were early signs of improving momentum as margins inched up in the second half of 2020.

The group gave no financial guidance for this year, although it said it might reach a target of achieving 2 billion euros in costs cuts by 2023 ahead of time, possibly by December.

Executives said they were confident the carmaker could be profitable in the second half of 2021, but that they lacked sufficient market visibility to provide a forecast.

Renault struck a cautious note, saying it was focused on its recovery but warned orders had faltered in early 2021 as pandemic restrictions continued in some countries.

The group is facing new challenges as the European Union tightens emissions regulations and after rivals PSA and Fiat Chrysler joined forces to create Stellantis, the world’s fourth-biggest automaker.

The auto industry endured a tough 2020 but a swift rebound in premium car sales in China helped companies such as Volkswagen and Daimler to weather the storm.

Auto companies globally have since been hit by a shortage of semiconductors that has forced production cuts worldwide.

“The beginning of the year has shown some signs of weakness,” De Meo told analysts, but added the chip shortage should be resolved by the second half of 2021. “We have taken the necessary measures to anticipate and overcome challenges.”

Renault estimated the chip shortage could reduce its production by about 100,000 vehicles this year.

SHARP HIT

The group was already loss-making in 2019, but took a sharp hit in 2020 during lockdowns to fight the pandemic, which also hurt its Japanese partner Nissan.

Analysts polled by Refinitiv had expected a 7.4 billion euro loss for 2020. The group posted negative free cash flow for 2020.

The 2018 arrest of Carlos Ghosn, who formerly lead the alliance between Renault and Nissan, plunged the automakers into turmoil.

In a further sign that the companies have been working to repair the alliance, De Meo told journalists that Renault and Nissan will announce new joint products together in the coming weeks or months.

Renault has begun to raise prices on some car models, and group operating profit, which was negative for 2020 as a whole, improved in the last six months of the year, reaching 866 million euros or 3.5% of revenue.

Analysts at Jefferies said the operating performance was better than expected. Sales were still falling in the second half, but less sharply.

Renault is slashing jobs and trimming its range of cars, allowing it to slice spending in areas like research and development as it focuses on redressing its finances. It is also pivoting more towards electric cars as part of its revamp.

It was already struggling more than some rivals with sliding sales before the pandemic, after years of a vast expansion drive it is now trying to rein in, focusing on profitable markets.

De Meo told journalists on Friday that the French carmaker will make three new higher-margin models at its Palencia plant in Spain, where manufacturing costs are lower, between 2022 and 2024.

($1 = 0.8269 euros)

(Reporting by Gilles Guillaume and Sarah White in Paris, Nick Carey in London; Editing by Christopher Cushing, David Evans and Jan Harvey)

 

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UK delays review of business rates tax until autumn

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UK delays review of business rates tax until autumn 2

LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.

Many companies are demanding reductions in their business rates to help them compete with online retailers.

“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.

Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.

($1 = 0.7152 pounds)

(Writing by William Schomberg, editing by David Milliken)

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Discounter Pepco has all of Europe in its sights

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Discounter Pepco has all of Europe in its sights 3

By James Davey

LONDON (Reuters) – Pepco Group, which owns British discount retailer Poundland, has targeted 400 store openings across Europe in its 2020-21 financial year as it expands its PEPCO brand beyond central and eastern Europe, its boss said on Friday.

The group opened a net 327 new stores in its 2019-20 year, taking the total to 3,021 in 15 countries. The PEPCO brand entered western Europe for the first time with openings in Italy and it plans its first foray into Spain in April or May.

Chief Executive Andy Bond said its five stores in Italy have traded “super well” so far.

“That’s given us a lot of confidence that we can now start building PEPCO into western Europe and that expands our market opportunity from roughly 100 million people (in central and eastern Europe) to roughly 500 million people,” he told Reuters.

To further illustrate the brand’s potential he noted that the group has more than 1,000 PEPCO shops in Poland, which has a significantly smaller population and gross domestic product than Italy or Spain.

The company, which also owns the Dealz brand in Europe but does not trade online, has already opened more than 100 of the targeted 400 new stores this financial year.

Pepco Group is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal.

Since 2019 Steinhoff and its creditors have been evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.

That process was delayed by the pandemic, but Steinhoff said last month that it had resumed.

“The business will be up for sale at the right time. It’s a case of when, rather than if,” said Bond, a former boss of British supermarket chain Asda.

Pepco Group on Friday reported a 31% drop in full-year core earnings, citing temporary coronavirus-related store closures.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 229 million euros ($277 million) for the year to Sept. 30, against 331 million euros the previous year.

Sales rose 3% to 3.5 billion euros, reflecting new store openings.

($1 = 0.8279 euros)

(Reporting by James Davey; Editing by David Goodman)

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