Overcoming barriers to female leaders in finance
The case for more diverse teams is clear and well documented – ‘groupthink’ is risky and leads to poor decision making.
At the recent FT CFO Dialogues conference, the founder of FutureBoards, Turid Solvang, led a workshop with SKAGEN CIO, Alexandra Morris, aimed at establishing why this widely accepted principle is still not being put into practice in the global financial services industry.
The workshop sought firstly to understand the barriers to female leaders in finance and established the following five factors as the most prominent:
1. Unconscious bias
Unconscious bias was cited as the main barrier to achieving gender balance in the financial services industry. This begins in early childhood, continues throughout education and into the workplace i.e. the language used; women are ‘bossy, feisty, pushy and selfish’, whilst male counterparts are ‘persuasive, confident and dedicated’. Further challenges include women being underestimated in the workplace, incorrect assumptions made about their desire to progress, how successful women should (or could) be, and whether they wanted to give up careers to become carers.
2. Gender balance is not sufficiently high up the corporate agenda
Corporates are not sufficiently prioritising gender balance as a key business issue and one that could lead to improved decision-making and performance. Management teams could and should do more to promote gender equality but progress is very slow. Despite targets set in 2016 by the UK government for FTSE 350 companies to have 30% female representation on boards and in senior executive positions by 2020, it isn’t working. The FT recently reported that the number of female executives has actually fallen in the last 12 months.
3. Family issues
The burden of managing family life lies disproportionately with women in the UK. In the Nordics there is a better balance; men take extended, paid periods of paternity leave, even when in senior management roles - with no stigma attached. Companies should be required to level the playing field. The UK government shared parental leave scheme has low statutory pay and take-up. Availability of flexible working policies needs to increase and be encouraged.
4. Rules made by men
Women are often told they must change to reach the top by adopting masculine behaviours. Better assessment is required about what power means, who determines culture, how we define success and what is required in order to achieve it. Studies show that people tend to recruit in their own image and if there is no diversity amongst those in hiring positions to influence the corporate culture, then real gender balance is impossible.
5. Talent pipeline
Are there enough qualified women available to take senior executive positions? If not, why not? Do graduate trainee programmes attract a broad mix of applicants? Previously there was a better gender balance at graduate-level than for senior positions. Not enough females are choosing STEM subjects in education but is that really a barrier to the C-suite talent pipeline? How many male CEOs are qualified in a STEM subject? Is there something off-putting about the financial services culture for women to apply? Are we undervaluing ‘new’ skills that women can offer? Leadership teams of the future may need different skills.
Overcoming the barriers
The workshop also explored practical solutions to improve gender equality and agreed that the onus is on companies and their stakeholders to act. Corporate boards and executive management teams are seen as best equipped to affect change in hiring processes and organisational culture but investors, employees and customers ultimately hold the purse strings.
Gender equality is recognised by the United Nations as one of its key objectives to achieve corporate sustainability and forms part of the Sustainable Development Goals (SDGs). These are a valuable tool for investor engagement, reporting and communication, as are policies for voting against all male boards and senior management teams. Company management teams and boards need to define Key Performance Indicators (KPIs) for gender balance, against which shareholders can hold them to account.
Consumers and employees can also ask for more information from their employers and the companies and organisations they deal with every day to question the status quo, work together to raise awareness and speak out on the topic.
Finally, are the wrong questions being asked?
In any corporate environment, the team is much greater than the individual. Those that have better gender balance offer more cognitive diversity, which can lead to improved risk management and decision-making.
In addition to SKAGEN’s CIO regularly speaking at events to promote gender diversity, our parent company Storebrand has spearheaded the FiftyFifty initiative which is based on SDG 5 (gender equality). The programme brings together women from some of the largest companies in Norway to articulate and develop actions and goals for successfully recruiting a larger number of female leaders. Women currently represent 50% of SKAGEN’s own leadership team and we actively promote diversity more broadly across the company.
Given the overwhelming number of barriers women face in the financial services sector more generally, are we asking the wrong questions? In the current management teams of financial services companies, do we need more people with the same skills, or do we need something a little different, more progressive and, if so, are we looking in the right places, if at all?
This is a summary of the FT CFO Dialogues workshop – the full article can be read here