The culture of finance has come a long way in the 24 years since Sam Smith helped to buy out and later took the helm at corporate broker finncap Group PLC (AIM:FCAP).
When she first started out in the City as a work experience intern on the trading floor at the tender age of just 17, Smith, who is now 48, says she was wolf-whistled by staff. Such a thing wouldn’t, she hopes, happen today.
As a newcomer in the so-called ‘open outcry’ trading pits of the former London Commodity Exchange, she explains in an interview with Proactive how she was confronted with an intimidating environment in which she “got wolf-whistled at”.
Picture a trading floor, replete with young men and some women gesticulating to each other about the price of stocks and whether to buy or sell through hand signals and shouting. It is an intimidating environment for any person, let alone a 17-year-old trainee coming to the world of stock trading anew.
It is an irony of linguistics that since the ‘me too’ era there would most likely be open outcry if a young woman faced the same treatment on the trading floor today, and yet such incidents were largely brushed under the carpet.
The trading pits of bustling financial centres are not what they once were, and since the Covid-19 pandemic are now almost a relic of the past.
Smith explains that in those early days of her career, she didn’t know how to deal with the harassment. After all, there was no manual on how to manage the wolfish behaviour of the trading floor, and it was seen as an exceptional occurrence even to have a woman there in the first place.
She describes how she had thought privately to herself, “how am I going to deal with it?”
Now, three decades on, she says, “that would be unacceptable”, and having traders “ogling you – that wouldn’t happen now.”
“Now the norms have shifted, a lot,” she said, with some relief. “The world is shifting.”
In a departure from her experiences on the trading floor 30 years ago, Smith says calling for gender diversity and inclusion today is “almost [like] pushing on an open door”.
“It feels different,” she said.
“Fourteen years ago when I set it [finnCap] up, culture was just not a thing,” she says. “Within four years it became much more something people wanted to talk about.”
Despite some tangible progress in the FTSE 100’s record of gender diversity in recent decades, Smith said there is still a long way to go before gender and ethnic diversity is reflected in companies in any meaningful way.
“I still think there’s so much to do,” she says. “Particularly at board level. [The] arc of power, a certain way of doing things that isn’t always right.”
Now in her work as a non-executive director, she is trying to push the business case of having more meaningful diversity.
“There’s a real awareness that diversity does [create] better decision-making,” she said. “[The issue of] female workers is a business issue not a female issue.”
Smith is an advocate for diversity being reflected at c-suite level, rather than just in the boardroom. Organisations such as Helena Morrissey’s 30% Club have been somewhat effective, she says, in attracting more women into the boardroom. But it is at chief executive level that she believes leaders have the most influence.
There was a time when there were more men named John or Dave sitting in the boardrooms of London’s blue-chip companies than there were women. However, following a recent campaign led by the 30% Club, those stark findings have since improved.
According to UK government figures from February 2022, nearly 40% of board positions at FTSE 100 level are now occupied by women.
“Boards got to 30%, but does that mask [problems]?” Smith asks. “That’s where most of the influence comes [from CEOs]. It’s not good enough to say [the] board is 30% women. [Businesses] need to think more generally [about] where the power is/has been.”
She is part of ‘25 x 25’, a diversity pledge aimed at filling 25% of London’s blue-chip chief executive roles with women by 2025. Currently fewer than one in 10 leaders of FTSE companies, just 9%, are female, according to ongoing research by HR firm Robert Half.
They include female business leaders such as NatWest Group PLC (LSE:NWG)’s Alison Rose, GSK PLC (LSE:GSK, NYSE:GSK)’s Emma Walmsley, Severn Trent PLC (LSE:SVT)’s Liv Garfield, Whitbread PLC (LSE:WTB)’s Alison Brittain, Imperial Brands PLC (LSE:IMB)’s Alison Cooper, and until recently, ITV PLC (LSE:ITV)’s Carolyn McCall (before the television channel dropped out of the top listing at the latest reshuffle).
“This is about finding female CEOs,” but it is also about having the right programmes in place to create a pool of staff at the entry level from which to choose future leaders, according to Smith.
The topic is close to her heart after spending 24 years as a founding chief executive at one of the City of London’s busiest corporate advisories.
She said that during her time at the helm of finnCap she and fellow staff were “trying to break the culture of financial services”.
In 2007, just 10% of employees at finnCap were female, which rose to 40% a few years ago. Since the broker merged with M&A advisory firm Cavendish, that figure has fallen back down to around 35%, largely because, she said, there are fewer women in those advisory roles.
Achieving 40% female workers at one of the City’s best-known corporate brokers was no mean feat. Yet it was largely incidental. Smith explained that much of the threshold was achieved due to visibility.
“[It] hasn’t been done by a focus on it,” she said, explaining that being a female CEO herself, she believes she emboldened other women to go for top jobs and attracted them.
“[The] CEO being female encouraged others,” she said. “Perception changed. Now you really need to think about social inclusion and ethnic minorities.”
In her time at finnCap, Smith drove phenomenal change, taking the firm public through an initial public offering in December 2018 and growing it into a business with an annual turnover of £52.5mln.
“Getting through that was very difficult with Brexit tension and going straight into [an] acquisition and IPO—that was really big for us,” she said.
Smith first joined finnCap in 1998 and took part in an initial management buyout in 2007, followed by a bigger secondary buyout in 2010, in which staff bought J M Finn stock “to incentivise the team” at a share price of 5p per share and total price tag of about £2.5mln.
“We raised it all from the team internally,” she said. “Those decisions are the biggest.”
Her secret is that she knows “how to do organic growth” and has a “growth mindset”.
“I love change. I wanted things to move,” she added.
Following her decision to move into a non-executive advisory role, John Farrugia, formerly managing partner at Cavendish, will take over the role of chief executive in the company’s latest incarnation, finnCap Cavendish.
Merging the two different company cultures “was quite difficult”, Smith said, with successes including new hires and instituting a group-wide bonus.
Diversity and inclusion are at the top of Smith’s priority list for whatever she does next, which is likely to involve working with CEOs in a non-executive capacity to help draw awareness of such issues.
She said she wants to “make a difference” in the areas of diversity and inclusion in particular, as well as environmental and social governance, adding that “there are a lot of companies trying to make a difference and not just paying lip service”.
Smith has also dabbled in political spheres, recently helping to raise awareness of the issue of entrepreneurship in education in government by collaborating with the All-Parliamentary Group for Entrepreneurship.
Its main objectives will be to ensure that governments recognise the importance of entrepreneurship and formulate a strategy to include it in the curriculum.
“No one in government is responsible for entrepreneurship,” Smith said. She is incredulous.
Her hope for the next prime minister, whether it be Liz Truss or Rishi Sunak, is that “they will prioritise growth”.
“What else can you do?” she said. “This has been the most complex three years of uncertainty ever. More founding CEOs [are] stepping back than ever.”
As for the next stop in her entrepreneurial journey, as well as wanting to spend more time with her daughter, she said she is “very much focused on where I can make the maximum impact”.
“So watch this space,” she said, after recently stepping back into a non-executive advisory role at finnCap.
Her future direction of travel is likely to be around growth, among the areas where she feels she “can make a difference in making businesses better”.
“Growth comes from smaller companies,” she said. “In the small- [and] mid-cap world, they are doing things differently, they’re good employers. You need more money in the system.”