Last week, over a month after reports of her hire began circulating, the appointment of Alison Rose as chief executive of The Royal Bank of Scotland Group was finally made official. This is a monumental appointment that should not be downplayed.
Rose is the first female CEO of not only RBS, but any of the major UK banks, making the announcement a milestone for diversity in the banking industry. While this has been recognised broadly, what many commentators may not appreciate is the impact this could have on the Scottish financial sector in particular.
My team of leadership consultants works closely with leaders in Scottish business, with a focus on financial services. When we analysed a sample of psychological assessment data for executive and senior leaders in the Scottish financial sector, it became clear to us that Scottish leaders demonstrate particular strengths and weaknesses. Managing complexity and risk, and analysing problems are positives, but leaders who demonstrated skills in role modelling behaviours that allow innovation to flourish are lacking, and this needs to be addressed.
The Scottish financial sector serves diverse communities and customers, and having this diversity reflected in your people and leadership is an important step to connecting and staying attuned to their needs – and unleashing innovation. Having diversity represented at the top of an organisation creates a positive ripple effect. For instance, a female CEO of a male-dominated company can act as role model, both in terms of inspiring emerging female leaders to aim high and reach similar heights, as well as using their new position to positively influence, drive and champion diversity and inclusion initiatives internally.
For the traditionally male-dominated finance industry, increasing gender representation is an important first step in challenging the status quo and moving towards a space of greater inclusion. Having a female CEO is a huge commitment to diversity, but the journey doesn’t stop there. Diversity on its own has limited impact when an organisation doesn’t have the leaders who can role model the change they want to see and foster a culture that allows diversity to thrive.
In short, those who hold leadership positions within the Scottish finance industry need to realise that inclusive leadership is not just an optional extra. Many studies have shown that diverse teams help drive innovation and create cultures that encourage new ideas and risk- taking, and that unleashing such potential comes down to those at the top setting the tone for the type of inclusive culture that is conducive to business success. By making Diversity and Inclusion a business priority, and investing in contextually relevant and well-resourced interventions, leaders can play an important role in generating a culture where talent can truly bring their best selves to work.
Given Alison Rose’s track record – such as the Rose Review spotlighting the barriers faced by female entrepreneurs – her appointment can safely be assumed as more than a box ticking exercise towards greater diversity in banking. One would hope that a key facet of Rose’s mandate will be in generating a culture where diversity and inclusion is embraced, and talent and innovation can truly flourish. If she can achieve that, we can only guess whether this impact could move beyond the boundaries of RBS and permeate the wider industry. I certainly like to think that it could.
Ed Cochrane is head of YSC Edinburgh