The finance industry is typically portrayed as a male dominated environment with discrimination towards women ingrained in its ideology. In films about the sector, like Wolf of Wall Street and Inside Job, women are typically seen to be objects, and those who actually work in finance are excluded and humiliated at every turn. This wouldn’t be so bad if the films were fictitious, but they’re not. Wolf of Wall Street is based on a true story, and Inside Job is a documentary.
The truth behind these representations is borne out by a wealth of statistics. According to a survey by Opportunity Now, the gender equality arm of the Business in the Community (BITC) charity, over 50% of women in finance say they have experienced bullying in the last three years, while 12% of women also reported that they had been sexual harassed. A Financial Times study of the fund industry backs this up, with 28% saying they had experienced harassment, and an additional 54% said that they had been the subject of inappropriate behavior. Though, the situation could be worse. At least there’s not many women there to experience such naked hostility. Studies conducted by the Harvard Business School found that just 9% of senior roles in venture capital are held by women, 6% at private equity firms, and a measly 3% at hedge funds. This, despite the fact women account for 40-50% of the graduate intake at most major City employers.
In their defense, the major financial firms appear to be making an effort to get more women on board. Large banks like Citigroup have women’s networks and in-house mentoring programs typically available to most new female recruits, as well as generous maternity packages. At a very senior level at least, banks seem to have realized the importance of getting women on board. The economic benefits of having women on board would suggest they’re making the right move. A review of 2,360 companies by Credit Suisse Research Institute over a six-year period found that it was ‘on average better to have invested in corporates with women on their management boards than in those without… companies with one or more women on the board have delivered higher average returns on equity, lower gearing, better average growth and higher price/book value multiples.’
However, while banks are making big noises, their initiatives appear to be doing little. The number of women in senior management is not going up, and anecdotal evidence suggests that sexism is still rampant. The main issue is that the entire culture in finance is one that rewards risk and an absence of empathy. Women, statistically, tend to be better at conflict management, empathy, self-awareness, and risk management. These are all qualities that are the antithesis to those promoted in finance, but they are very much needed to right the well-publicized and incredibly damaging ills in the industry. Women have, and do, flourish in finance because many also lack empathy and embrace risk, but maybe if virtues more traditionally associated with femininity were encouraged as opposed to showy programs, not only would the gender imbalance be corrected, but the industry as a whole would be less prone to massive scandals.
One of the reasons that the generous maternity packages offered by banks have failed is that many women believe that if they take them up, they will lose ground to male colleagues. Citigroup, PwC and Deloitte are among those planning to push new fathers to take more paternity leave when new UK rules come into force in April. This should help employers see women and men as equally likely to go on parental leave, and go some way to eliminating the unconscious bias among male managers against hiring and promoting women because they fear them disappearing for a year. It should also help promote a cultural change among the general staff.
Opportunity Now has suggested conducting equal pay audits and ensuring that company bosses are visible in leading the fight against inappropriate sexist behavior. Regulated quotas have also been put forward as a good option. These provide a temporary solution to the issues. If finance is to embrace women, and women are to embrace finance, the whole industry needs to re-evaluate.