Barriers to Leadership for Women in The Financial Services
The finance industry is not known to be supportive of women, with female managers, senior managers, and executives in financial services being 20-30% more likely to leave their employer than their peers in other industries, according to a 2016 research Women in Financial Services.
I started my career in the City in 2006. I personally didn’t feel the unsupportive environment until about 9 years later from when I first started in the industry. When I had a child, I started to have difficulty managing my workload and needed to slow down. Needing to pay specific attention to other areas of my life, I could not perform at the same level in the industry that has no semblance of work-life balance. Unable to spend time with my kid even on weekends, I decided to take a break.
My story is hardly unique. Luisa Gomez Bravo, Global Head of Corporate & Investment
Banking, BBVA says in research by Oliver Wyman, “The issues surrounding gender equality increase as you go up the pyramid, and you can pinpoint maternity.”
Low Number of Women in Managerial and Executive Positions
Studies show that in the finance industry, the highest percentage of women exist at the bottom of the career ladder and lowest on the top. While women form the majority at the lowest rung as support staff at 71%, their percentage starts to decrease and they end up being the minority on the top at 21%. Correspondingly, the percentage of men at each higher level goes on increasing.
Source: When Women Thrive, Mercer, 2016
I have found that who your manager is has a great impact on how your experience in the industry is. It comes down to the person managing you and their internal beliefs, values, and biases. Women are typically more understanding and supportive of other women than men because they understand their unique challenges. Hence, the low number of women managers and executives also make the workplace harder for women on lower career levels.
While this bias in promotion hinders women’s careers — they are not the only ones negatively impacted. Having women in managerial positions brings diverse opinions and views to the organisation, which helps create stronger, richer, and more resilient companies. In fact, Christine Lagarde, president of the European Central Bank and formerly the chair and managing director of the International Monetary Fund famously said for the 2008 financial crisis, “If it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.”
A McKinsey research titled “Delivering through Diversity” also shows that gender and racial diversity are clearly correlated with profitability in companies.
Culture
But cultures that are open and welcoming to diversity as a norm and practice, rather than to fill a quota, would be the ones that would perform well, regardless of the actual gender of the CEO.
For example, even today with the coronavirus pandemic, when countries with female leadership have performed better, several experts in The New York Times and The Conversation have pointed out that the better performance is probably less to do with female leadership per se, and more to do with the culture that exists where women can climb at that level of leadership in the first place.
For example, my home country Sweden is amongst the top 5 countries to have the highest representation of women on executive committees in financial services firms at 33%, whereas the global average is at 20%. But there is much more than just a supporting manager and unbiased work environment that allows my friends working there to have three kids, and still meet me for 6 o’clock drinks and dinner at a day’s notice. Something as seemingly unconnected as the school system that offers affordable summer camps for kids allows them to be stress-free and productive at their work.
That is why experts now suggest to not just measure the percentage of women in the sector — but measure culture and behaviour, like diversity, morale, trust, and conduct, the stuff that actually matters.
For example, while most companies these days have flexible work options like remote and part-time work, only women are expected to avail those, with a study showing that it is usually seen as a “mum’s choice” and a source of social embarrassment. For flexibility to be normalised, men need to do it as well, says Euan Munro, CEO, Aviva Investors in the study.
One of the most visible impacts of coronavirus on the workplace is the growth of flexible and remote working, but it is questionable if these changes will last in the future.
Money
Data suggests that men get promoted quickly in the banking industry, with women taking 6 months longer than men to reach managerial positions.
Similarly, men’s bonuses are higher than that of women, with it being more than twice than that of women in the trading industry.
Given men’s high paychecks, most men don’t culturally feel it is their duty to take care of the kids or household chores as they are providing for the family financially. This leads to men not needing those flexible working options available to them. In turn, creating a vicious circle.
While women are paid less than men, the financial services industry still pays very well as compared to other sectors. But given the unsupportive culture overall in the UK and specifically in the industry, you have to then hire a nanny for your kid. Instead of paying your lavish paycheck to the nanny, women feel they might as well give up their job and take care of their kids themselves. “The mid-career conflict… the cost and benefits of a career in financial services can seem to be out of balance,” says the 2020 Oliver Wyman study.
Shaping The Future
To then succeed in life and careers, women in finance fight in different ways, from trying to work under more supportive managers within the same company, moving to companies with a better culture to some becoming freelance consultants or starting their own businesses. Some change their entire career trajectory by moving to another industry altogether where they can have more flexibility.
But people shouldn’t be forced to leave. The problem should be resolved within the industry itself, with the industry adjusting to the needs and requirements of its human resource rather than the other way round.
But since a lot of factors influence an industry’s culture, governments can and should get involved with better initiatives. Some, but not all, are already doing their part. For example, governments of Sweden (one of the world’s most gender-equal countries) and Saudi Arabia (one of the world’s least gender-equal countries) have come up with initiatives like the global gender equality strategy and Vision 2030 respectively.
These initiatives do have an impact. For example, the CEO of Saudi Arabia’s third-largest bank by assets Samba Financial Group is a woman named Rania Mahmoud Nashar since February 2017, the time when the government had started to implement Vision 2030.
At the same time, the finance sector with its clout, power, influence, and visibility needs to do better themselves too, since those who control money control culture. Would they lead the way?
Bahareh has over 15 years of experience in the financial services, technology and legal sector with expertise in marketing, performance & strategic analysis, managing client relationships and business development. She can be reached at [email protected]
Curzon PR is a London-based PR firm working with clients globally. If you have any questions, please feel free to contact our Business Development Team [email protected]
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