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The industry is about results and outcomes – the right clients, the right business, the right way. When applied consistently, those metrics are indifferent to demographic profiles. In theory, that makes finance a relatively level playing field – for women and anyone else. Of course, bias exists in all facets of life, and it would be naïve to suggest that there are no barriers to success for women in the industry. The statistics do not support that assertion. From 50/50 recruitment at graduate intake, the proportion of women starts to decline from the first ‘titled’ positions, dropping to single digit at the MD level and low single digits at Board level. Still, this is progress from when I started my career: the graduate intake IS 50/50, and there ARE female MDs and Board members.
There is ongoing debate and much academic research attempting to explain the attrition levels. I think one of the more interesting analyses is Julie Nelson’s paper “Would Women Leaders Have Prevented the Global Financial Crisis?” (Tufts University). She focuses on the unconscious power of stereotyping, and points out that most research on this question focuses on the differences, rather than the similarities. Interestingly, there is little attention to the substantive size or importance of these ‘differences,’ or the degree of overlap.
I am not an advocate of the assertion that women are more risk averse than men. This simplistic assertion ignores the critical difference between risk taking and recklessness. Perhaps instead of asking ‘do you like taking risk?’ we should focus on ‘are you good at taking risk?’ I don’t think that risk aversion is an intrinsic sex-linked trait. Some men are risk-takers; some are not. The same is true of women.
Nor do I believe that the attrition rate of women in the industry is generally voluntary – women choosing to opt out for personal reasons, or that they don’t like the competitive culture. Some women do leave the industry for personal reasons, and some women don’t like the competitive culture. The same is true of men. I know of several male teachers at both my son’s school and my daughter’s school who ‘opted’ out of finance to become teachers.
If there is a meaningful difference, perhaps it is that people (both men and women) who self-select into finance have different characteristics than the general population who choose other career paths. Any rational person (male or female) will leave a firm (or a career) if blockages in the career path prevent you from achieving your professional goals. But, why is there a starting salary pay premium for male graduate trainees over female? Why are women graduate trainees more often channelled into support functions rather than front office P&L-owning positions? Why will my daughter only earn 82.5 p while her twin brother earns £1 (assuming the same qualifications, experience, doing same job, and both ranked in 95th percentile on performance)? She certainly should NOT go to Uni!
According to research by the Economic Policy Institute, the pay gap widens the higher up you go (by position seniority), and is more pronounced among those holding university degrees. Women with an undergraduate degree earn 78% of men’s pay, and with an advanced degree, 74%. This is true across a range of industries, including those that are traditionally female occupations (nursing and teaching). This has little (if anything) to do with personal choices, risk aversion or leadership skills.
So what has changed over the course of my career? More women choose finance as a career. More women hold ‘front office’ positions and advance to lead teams or business divisions. More women make MD, and even a few make it onto a Board. Many firms are committed to offering agile working (for men and women). Most firms offer some variety of Women’s Networks and mentoring programmes. Behaviours have been modified across the industry – not just in the context of male to female colleagues – reflecting political pressures, stakeholder and societal expectations of good governance. Much progress, sometimes rapid, sometimes glacial.
It’s still not a level playing field, and probably won’t be in my professional life span. This is a work in progress. But even with the inequities, I have been able to build an intellectually demanding career path that is stimulating, challenging and financially rewarding. I have always assumed that the same rules applied to men and women; even when it clearly wasn’t the case, I behaved as if it were so. When I mentor men and women who are at earlier stages in their career, the advice is much the same: bring you’re A-game; know your stuff (especially the numbers) inside out; set high standards, and exceed them; be willing to negotiate and compromise on commercial matters, but never on principled behaviour.
Interestingly, statistics for the industry suggest that Gen Y and Gen Z are less inclined to pursue careers in finance, and some banks are struggling to build a pipeline of bright young recruits to replenish the attrition of more experienced staff (both male and female). Ironically, this may be a windfall for women in the industry, as corporate norms and personal biases will have to adapt in order to attract and keep talent – any talent – even if she’s a woman.
Lea graduated from the Masters in Finance (Part-time) in 1995 and wrote this piece in celebration of the 20th Anniversary of the programme. Find out more about the MiF here.