Where Are the Senior Women in the Financial Sector?

The statistics on the representation of white women and women of color in the financial sector, at both management and senior levels, are grim.

Closing the Gap,” a study conducted by LeanIn.org and McKinsey & Company, looked at thirty-nine financial services companies, which employ 1.2 million people:

  • In North America, women account for fewer than one in five positions, or 19 percent, in the C-suite.
  • Women are 24 percent less likely to attain their first promotion than their male peers, even though they request promotions at the same rate.
  • Women of color are 34 percent less likely to make their first promotion than men in financial services. They face compounded bias due to both their race and gender.
  • Despite the value placed on sponsorship, senior-level women (34 percent) are still less likely than their male peers (44 percent) to receive substantial support from senior management, even though they ask for it at the same rate.
  • Nearly half of senior-level women say they continue to shoulder most household responsibilities while just 13 percent of their male peers say the same. Senior-level women are much more likely to believe that participating in flexibility programs will undermine their ability to succeed at work.

This report notes that “a limited number of female role models in leadership positions may limit women’s motivation to make it to the top.” According to Deanna Strable, executive vice president  and CFO at Principal, “Young women don’t see role models or potential paths towards executive level leadership.”

The research study “Women in Financial Services: Quick Take,” conducted by Catalyst, highlights alarming trends:

  • Between 2007 and 2015, women’s representation in the financial services industry remained unchanged for management at about 48 percent and the executive level at about 29 percent.
  • For women of color, representation between 2007 and 2015 increased slightly at the executive level from 4.1 percent to 4.4 percent.
  • Median weekly earnings in 2018 for financial managers was $1,262 for women, and $1784 for men.

A recent article written by Jack Ewing of the New York Times reports that Christine Lagarde just became the first female president of the European Central Bank. Women are visibly underrepresented at central banks and the US Federal Reserve. Ewing notes that less than one-third of the economists at the Federal Reserve are women.

In a New York Times article, Jeanna Smialek writes that representations is important because “women focus on different issues and have different economic priors than men.” Janet Yellen, the former first female chair of the Federal Reserve, explains that “beyond fairness, the lack of diversity harms the field because it wastes talent . . . and skews the field’s viewpoint and diminishes its breadth.”

Of the big banks in the United States, none have a woman at their helm. Emily Flitter of the New York Times reports that when the leaders of the seven largest US banks recently testified before the House Financial Services Committee, “not one raised his hand in response to a question about whose bank might have a woman as its next chief executive.” Shortly after that hearing, Citigroup became the first giant United States bank to put a woman in line to become chief executive. Jane Fraser will one day be the president of Citigroup, if she decides to wait for the retirement of the current, leader who is not planning to retire for a long time.

Overall, little change has happened in the representation of women in the financial sector, especially in the senior ranks. Smialek cites cultural barriers and biases that are currently embedded in the cultures of banks and other financial services organizations as the cause of this underrepresentation. Thanks to senior women like Janet Yellen and Christine Lagarde, new pressures are now on those institutions to change.

 

Photo by Jonathan Francisca on Unsplash

What Gender Bias Looks Like

Gender bias can be subtle and difficult to understand. At the beginning of my women’s leadership programs, many women cannot see it and eventually discover that it is so much a part of their daily lives, they have become numb to it. The following are some recently published examples of gender bias from the media, finance and biopharma, economics, and Wall Street that silence women’s voices and create barriers to women’s participation in shaping our world. News Media: Amanda Taub and Max Fisher of the New York Times write that women are underrepresented in news coverage by a ratio of three-to-one. Being quoted or cited in news articles helps determine who is considered to be an authority on a topic. Taub and Fisher note that the social machinery that equates expertise with maleness is complex and creates a vicious cycle that shuts women out. For example, news organizations use online searches to find experts to quote or cite. Because women are underrepresented in news coverage, their names do not come up as often in searches and they continue to be excluded. Finance and Biopharma: Rebecca Robbins and Meghana Keshavan of STAT share an example of gender bias at a large annual healthcare conference sponsored by J.P. Morgan: men represented 94 percent of the 540 people making high-profile presentations to biotech executives and investors. Let’s be clear—these events are where careers are made and enhanced by the opportunity for visibility. And women are not visible. This lack of representation of women on panels and in speaking slots at professional conferences is a trend that has been recently reported in several fields. Economics: Justin Wolfers of the New York Times writes about the scarcity of women and women’s voices in the field of economics and the implications for all of us. He notes that “because economics has an outsized influence on public policy . . . [and] many debates are likely to be dominated by men for years to come,” there are so few women in economics. Wolfers cites surveys that show stark differences in opinion between women and men economists: women economists, by large margins, favor policies that promote income equality, big government and government regulation, mandatory employer-provided health insurance, and labor policies that promote environmental quality over economic growth. Women economists tend to focus on different topics than men, and as Wolfers writes, “If there were more female economists, more attention would surely be paid to these issues.” The number of women studying economics has stalled, and women are a minority in every level of training and rank in economics. Wolfers notes that a host of careful studies has identified barriers that discourage and drive women out of the field, such as being held to a higher standard for publishing or not being given tenure credit for publishing with men, while men get credit for publishing with women. Jim Tankersley and Noam Scheiber of the New York Times, also writing about women in economics, share new research on patterns of gender discrimination in the field. One study on the most popular introductory economics textbooks found that the textbooks refer to men four times more than to women and that 90 percent of the economists cited in the texts are men. This new research also notes that the bias against African American women in economics is especially pronounced—only fifty-two black women earned doctorates in the field between 2006 and 2015. Black women are incredibly invisible. Wall Street: A new lawsuit against the investment firm run by Steven A. Cohen, Point72, is reported by Jessica Silver-Greenberg and Matthew Goldstein of the New York Times. The woman bringing the suit explains, “The company is a testosterone-fueled ‘boys club’ in which men comment on women’s bodies, belittle their abilities, exclude women from meetings, and pay them less than male peers.” Further evidence of gender bias is offered: women are fewer than 3 percent of managing directors and, of the 125 portfolio managers, only one is a woman. When women’s voices and perspectives are missing from the classroom, research, business, and government, we all lose. Let’s keep the pressure on for change.   Photo courtesy of businessforward (CC BY-SA 2.0)]]>

Why There Are So Few Senior Women on Wall Street

Why are there so few women in senior management in the banking and investment industry, also known as Wall Street? In spite of a plethora of diversity committees, women’s leadership programs and retreats, and inclusion training in Wall Street firms for at least the last two decades, the representation of women in senior positions has not changed much. A major investment bank has never had a female CEO, and only 2 percent of hedge fund managers are women. Sam Polk, a former hedge fund trader, explains in an article in the New York Times that the hypermasculine culture of Wall Street firms remain unchanged because “men rarely do or say anything” to challenge the overt and covert sexism all around them. The pressure to conform and fit in to be promoted is reinforced from day one. The overt sexism that women experience, such as pressure to sleep with bosses, retribution when they don’t, and loss of opportunity after taking maternity leave, is one type of sexism that creates barriers for women, but it is covert sexism that Polk is most concerned with in his article. He explains that “most of the sexism on Wall Street occurs when women aren’t in the room.” He calls this “bro talk,” where men casually talk about women as sex objects and body parts as a way of bonding with each other. Polk reflects on his own experiences in high school, in college, and as a bond trader on Wall Street where he heard men who were role models—fathers, coaches and bosses—denigrate women. He notes that while he felt uncomfortable hearing and participating in this type of talk, he never said so because “it feels really good to be in the in-crowd.” Protesting would have been “embarrassing and emasculating” and, he admits, bad for his career. Now the father of a daughter, Polk regrets his silence and explains, “‘Bro talk’ produces a force field of disrespect and exclusion that makes it incredibly difficult for women to ascend the Wall Street ladder. When you create a culture where women are casually torn apart in conversation, how can you ever stomach promoting them or working for them?” He urges men to be allies—to finally bring about change in the Wall Street culture and other organizational cultures they are in, men must insist that women be spoken about with respect. He makes the point that a relationship exists between “bro talk” and the rape and sexual abuse of women and girls. Polk states, “When we dehumanize people in conversation, we give permission for them to be degraded in other ways as well. . . . Our silence condones this language.” In another article describing the new movie Equity about female executives on Wall Street, author Melena Ryzik interviewed women who are currently investment bankers who agree that the culture of hypermasculinity still exists. They detail a number of sexist assumptions and double binds that create barriers for women:

  • The assumption that women will leave to marry or have children so there is no reason to promote them.
  • The demand that women have to continually prove themselves before they get promoted, while men are given a chance to prove themselves after promotion.
  • The conflict between being too tough or too pliant and being called overbearing when expressing an opinion.
Barbara Byrne, an investment banker at Barclays and a producer of the film, asks, “When do we get our fair share, when do we get a seat at the table?” It will take both women and men to change the culture of sexism. Let’s hope that many men heed Polk’s call for an end to their silence. Are you a man, or do you know a man, who speaks out when other men are demeaning women behind closed doors? We need men to stop participating in “bro talk” and challenge other men to stop, too. It will help us all to hear your success stories.   The image in this post is in the public domain courtesy of Helpsg.  ]]>