Despite an increased focus on diversity in the financial sector over the last decade, statistics suggest that crisis-driven job losses have been disproportionally hard on women.
Between 2007 and 2010, the number of women working in the UK financial sector declined by 12.5%, compared to 8.8% of men, according to the Economic Policy Institute.
"This is indicative that financial sector gender diversity initiatives were still a nice-to-have, rather than a fundamental focus," argues Aviva Wittenberg-Cox, CEO at 20-first, a business consultancy that focuses on gender-balance issues. "In the financial crisis, some firms take the opportunity to shake-up their diversity programmes, to promote and change. Others hunkered down and relied on old-dependable candidate profiles, which in the financial sector meant largely high-performing males."
There are some other harsh figures: Women comprise just 17.8% of the FSA's 'approved persons' list – which includes a large proportion of advisory and trading roles – and, despite an increase in women at board level in the UK last year, they still make up just 14.2% of FTSE 100 boards, according to the Cranfield School of Management.
Within investment banking, women are still hugely under-represented at the senior level. They accounted for 17.6% of this year's crop of Morgan Stanley MDs (compared to 16.4% last year), for example, and of the 261 Goldman Sachs 2011 MD promotions, female candidates comprised 19%, which is down from 24% in 2010.
However, are things starting to get better? Justine Lutterodt, managing director at consultancy the Centre for Synchronous Leadership, believes so.
"The dialogue is becoming more authentic in the financial sector and starting to focus on the real issues, rather than 'fixing the women'." she says. "Part of this is commercial - firms are beginning to realise the potential for improved decision-making, talent retention, and client engagement resulting from greater diversity in senior management."
Business imperatives are driving diversity
There are various, slightly vague, arguments for employing more women in managerial positions – they're more risk-averse, better communicators, more empathetic and pragmatic than men – but applying a single set of personality traits to a large section of society isn’t always helpful.
The real argument, perhaps, is more practical – the more diverse your workforce, the less homogenous your outlook will be and the better the chance of producing new ideas and solutions.
Some oft-cited research into the gender make-up of Fortune 500 companies' boards and its effect on performance from Catalyst, a US think-tank for women in business, supports this. It showed that companies with the highest proportion of women on their boards had a much better return on equity than those with the lowest and, on average, were more efficient.
A report last year by Lord Davies of Abersoch, which recommended that companies double the number of women on boards by 2015 or face government intervention, has also prompted more action.
A year on, and there's something of a "culture change" in British business, argues Lord Davies, and women now account for 15.6% of all directorships, up from 12.5% last year.
Confidence not competence
If financial services firms are keen to espouse their innovative gender diversity initiatives, and there's a general consensus that more women are needed at a senior level, why are they still so under-represented in the senior ranks? One argument is that women are more reluctant to put themselves forward for promotional opportunities.
"Women are inherently less confident, even with the same qualifications and experience as their male peers," says Kate Grussing, a former senior banker at Morgan Stanley and J.P Morgan who now runs Sapphire Partners, a search firm that specialises in placing senior women into often flexible roles. "Part of that makes them great employees because they over-deliver and over-prepare, but on the other hand it explains why they don't get promoted at the same rate because they don't put their hand up for the really challenging assignments."
New jobs are currently much scarcer in the financial sector and employers are becoming much more stringent with their hiring criteria. Coupled with this, female candidates are less likely to apply unless they believe they're a perfect fit for the role.
“If a woman believes she has only 90% of the skills required, then she is unlikely to apply for the position. On the contrary, a man will not hesitate even if he has only half of the skills required,” said Diane Segalem, vice-president of the head hunters CTPartners.
The importance of a strong network
Networking is, of course, a key component of a successful career in the financial sector. However, it's only recently that banks have started considering using a technique called 'social network analysis' to apply a sense of scientific rigour to how women (and other minorities) are connected in the business.
"Leading banks are realising the focus on individual human capital is necessary, but not sufficient," says Steven D'Souza, former head of diversity for global wealth management EMEA at Bank of America Merrill Lynch and an associate at law firm Byrne Dean. "How women are connected within an organisation, the quality, size, structure and diversity of their connections within a firm has a direct correlation to their promotion and subsequent career success."
"This technique can very quickly reveal if and where the women in an organisation or department are isolated compared to the men," adds Harish Bhayani, senior partner at PRM Diversity Consultants.
The need for a cultural shift
Open discrimination is now increasingly rare, but banks still have consider the effect that 'unconscious bias' – automatically favouring those people similar to you – may have in hampering women's career progression.
"There remains a lot of cultural bias and assumptions about the traits of women managers, and many in the financial sector feel pressure to be more masculine to fit in, rather than simply being themselves," says Lutterodt. "This manifests in different ways - for instance I met a woman last year who had been advised to cut her hair shorter to 'look less like an assistant and more like a manager.'"
Women who have made it to the senior ranks feel the obligation to influence the culture from within and also serve as role models for those entering the industry, says Herta von Stiegal, chief executive of Ariya Capital and former MD at Citi, J.P Morgan and AIG Financial Products.
"Until the number of women in senior positions reaches critical mass and they're no longer characterised as exceptions, change will be difficult to achieve," she says. "It will take enlightened men and brave women to bring about a cultural shift in attitudes."
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