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Women in finance beyond the glass ceiling | London Business School

Similar beneficial dynamics play out within companies. Academic research indicates that employing a greater proportion of women acts as a restraining influence on the riskier investment behaviour of men. Mixed gender teams of fund managers outperform funds managed by single-sex teams by balancing out risk and producing less volatile returns.

Such creative and financial benefits of mixed teams show that there are no winners in a workplace battle of the sexes. Instead, men and women who want to reorganise the way we work are joining forces, both within companies and through organisations such as the 30% Club and the Diversity Project, chaired by Bates.

Government has played its part, too. In 2016 Jayne-Anne Gadhia, CEO of Virgin Money, was invited to lead a review into the representation of women in senior management in the sector. Her report, Empowering Productivity: Harnessing the Talents of Women in Financial Services, revealed that only 14% of executive jobs were held by women. The report’s recommendations became the backbone of the Women in Finance Charter, which asks financial services firms to commit to four key actions:

• Appoint a member of their senior executive team to be responsible and accountable for gender diversity and inclusion

• Set and publish internal targets for gender diversity in their senior management

• Publish progress annually against these targets in reports on their website

• Have an intention to ensure that the pay of the senior executive team is linked to delivery against these gender diversity targets.

The March 2018 review of progress made by the original 68 signatories to the Charter reported that more than a quarter have already met their targets and more than a half are on track to do so.

Developing and retaining female talent

Gadhia’s report also identified a “permafrost” in the financial services sector’s mid-tier – women were either failing to progress or just leaving. The common assumption is that women fall out of senior roles because they leave to have children, but the research found this was simply not the case. Women who didn’t have children were just as likely to tread water at work or leave. The problem was more complicated. The whole culture needed to change: “Not many women leave to do yoga full time,” says Woodman wryly.

“They leave when they don’t think the management team supports them and they leave to perform other highly demanding roles within or outside the industry. One of the most important areas a firm has to work on – which never gets enough attention – is the way managers develop talent. Women have a tendency to be less vocal about their aspirations. Even when they are, managers have not always been open to thinking of different leadership styles.”

What is the solution to developing and retaining female talent? Part of the answer lies in rethinking how business is done. Woodman and Bates agree that the presenteeism mindset ne to go, for a start. Keeping in tune with a generation used to communicating and contributing remotely means businesses must make as many roles as possible open to agile working.

“This isn’t about giving women with kids a laptop,” says Bates. “It’s about getting the job done efficiently.” Happier employees, both male and female, who are not exhausted by long commutes are more engaged and more productive.

While being physically located in an office may no longer be essential, feeling supported within the organisational structure remains vital: “At Morgan Stanley we’ve instituted a process where we’re having constant and frequent conversations about our rising stars – both women and men,” says Woodman. “The focus is on mentorship, effective sponsorship and talent management.”

This includes the successful ISG Connects programme, a six-month mentoring initiative in the Institutional Securities Divisions which carefully matches women with a senior colleague. Often these pairings develop into a form of sponsorship which can act as a catalyst for the junior employee’s career as the senior colleague advocates for them to gain experience and take on more responsibility.

If women are taking a career break to have children or fulfil other caring commitments, Bates urges managers to keep in touch with them. She commends those businesses – in particular the big investment banks – who have introduced programmes for women looking to return to the workforce. “They give access to a pool of enormously competent and capable people,” she says.

Where are we now?

Focusing on the glass ceiling may not be helping bring about change. While it’s critical that women hold senior leadership positions, not least because they act as role models for their younger colleagues, focusing too rigidly on the achievements of these highest flyers risks distracting attention away from the far wider question of how gender balance is being sought today.

Bates’ and Woodman’s CVs mark them out as trailblazers and glass-ceiling smashers, but their actions and aspirations encompass far more. Both are committed to creating inclusive and flexible working environments and to increasing the number of women working at every level in the sector: “My emphasis is on building the pipeline – attracting a high percentage of women to join the firm and then retaining them and inspiring them,” says Woodman.

Gender balance is not just a ‘nice to have’. With algorithms increasingly automating tasks, the way companies will differentiate themselves – and protect their bottom lines – is through creativity and innovation. Bringing together people with different backgrounds, experiences and perspectives can give rise to a burst of creativity described by Frans Johansson as “the Medici Effect.” “When you step into an intersection of fields, disciplines or cultures,” writes Johansson, “you can combine existing concepts into a large number of extraordinary new ideas.”

These are the sort of moments that Bates describes as her true career highlights, when providing a spark became a springboard for someone else’s thought and creativity. Occasions when, as she puts it, “someone comes back with a better answer than the question you asked.”