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Financial Services: Where are all the women?

Posted by: Claudia Butler 2 Mar 17  | Finance

With International Women’s Day fast approaching, we’re exploring why the financial services industry is lacking a female presence in C-level positions and why companies benefit from having a diverse workforce.

A recent research paper by Morgan Stanley revealed that the financial services industry had the best employee female to male ratio, with banks demonstrating the strongest gender diversity. But when we delve deeper into the sector, a survey run by Morningstar revealed that less than 10% of all U.S. fund managers are women. Although women in the U.S. financial services industry account for 40.5%-63.0% many of them do not hold senior or C-level positions. It was also said that women exclusively run only 2% of the industry’s assets and open-end funds.

Why gender diversity works

Although, on the surface it may appear the push for gender diversity is solely because of women’s rights, it is a proven fact that diversity in senior level positions has a positive impact on a company’s performance.

Catalyst carried out a study on corporate performance when there was gender diversity among the board members. The results proved that companies who had a high representation of female board members significantly outperformed those with no female directors. In fact, the report Women Matter discovered that companies with the best gender diversity at board member levels outperformed their sector in terms of return on equity, operating results and stock price growth.

Men and women have different mind sets

The correlation of a diverse workforce to the success of a company makes perfect sense as men and women have different mind sets. According to Business Insider, some of the key mind sets women bring to a team are: the intuition to assess all points of view, different values and the ability to network and support one another. Men on the other hand are very strategic and linear in their thinking allowing them to breakdown a problem and solve it says The Fiscal Times.



Breaking down the gender stereotype

Compared to 1984, the number of women in the workplace has increased from 42 million to 72 million. Gender specific roles are beginning to dilute and as the amount of stay-at-home dads increases, many women are able to embrace their career and are no longer challenged by the demands of the job coupled with looking after the family home.

In 2012 42% of the graduating class at Wharton Business School said they wanted to have children, compared to 80% in 1992 according to Friedman, which suggests more women are focussing on their career at a young age.

As well as gender stereotypes, ILM recently brought to light that 73% of women believe that there are a number of barriers preventing them from progressing to top level management positions. These included: maternity, childcare, a lack of self-belief and confidence. These barriers contribute to the fact that 20% of men will apply for a role despite only partially meeting its job description, compared to 14% of women. This lack of self believe and confidence inhibits many women from applying for roles they are more than capable of doing.

How can talent teams help?

To help tackle the issue, ILM suggests that internal talent teams should proactively identify high achieving women and prioritise encouraging them to apply for senior level roles. Focusing on personalised development and support programmes can also encourage women to set more ambitious goals and stretch assignments, as well as support and encourage greater risk taking.

It seems that more companies within the financial services industry need to spend time utilising their female workforce by encouraging them to apply for C-level positions. This not only breaks down barriers for women to apply for senior level positions, but can also better their company’s performance. It will be a slow process, but we hope to see more women in C-level positions in the financial services industry over the coming years.

 

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