Is the financial sector doing enough to promote gender equality?

* All opinions expressed in this opinion piece are those of the author and not of the Thomson Reuters Foundation.

The success of women in finance relies on the industry having managers who create environments that include diverse voices and weed out managers who continue to hire in their image

By Dr Grace Lordan, Founding Director of The Inclusion Initiative (TII), Director of the MSc in Behavioral Science and Associate Professor of Behavioral Science at the London School of Economics and Political Science

Recently, I met 79 women who work in financial services in the City of London as part of a qualitative study I conducted for Women in Banking and Finance (WIBF).

I actively listened to the headwinds and tailwinds they had experienced during their career. I heard that I was “stalked by my mother” after maternity leave, that I was denied opportunities and excluded from decision-making processes.

One theme shone brightly – the success of ultimate gender convergence hinges on the sector having managers who create environments that include diverse voices. The success of the final gender convergence depends on the sector eliminating managers who continue to hire in their image. The final convergence of genres will tackle clientelism.

Based on the headwinds and tailwinds identified by the women I met, I created ‘The right financial framework‘. This framework establishes a clear set of actions an organization can take to create a more inclusive culture. If adopted, all talents will benefit. In fact, there is an exception – people of all genders who favor people “like them”.

This framework is based on two important movements at the level of the organization.

The first is to move away from compliance-based mechanisms to include women at all levels of the organization, towards real culture change. Audits, monitoring and quotas are examples of compliance-based mechanisms.

A real culture shift has occurred when diversity is embraced as a mechanism to innovate, create and better assess risk. The framework highlights that in the financial services industry, we have many leaders who are already there. Now we need more.

I view audits, monitoring and quotas as blunt instruments that were very much needed for the progress we have seen over the past decade. I also expect that the culture change the framework would bring will increase the effectiveness of these blunt instruments. After all, if there are gender quotas in an organization that has a good culture, you can see why quotas are necessary.

Women on the board will be fully welcomed and heard, rather than being forced to adapt their views and perspective to the status quo.

Second, the framework invites companies to assess their diversity and inclusion (D&I) initiatives. Too much money is spent considering the glacial advance. If companies assess where their money is going in terms of return on investment, they can learn what is creating change in their own organization. This allows them to double effective initiatives and eliminate ineffective initiatives.

The framework encourages the sharing of learning between organizations. I’m sure it can happen, as WIBF has assembled a series of framework sponsors, including Blackrock, Citi, Goldman Sachs and the London Stock Exchange. The work is also supported by the Financial Conduct Authority.

I believe that the financial services industry will eventually lead the final gender convergence. No other sectors come together, the way WIBF’s Accelerating Change Together program partner companies come together, to understand how we can accelerate the ultimate convergence of genders.

Overall, the framework centers on the need for managers to truly understand the value of including women in the decisions that shape the future of the sector.

When this happens, we will notice a real change. These managers will be both knowledgeable and empathetic. Our work has highlighted that too often there is a trade-off between these areas. The industry needs highly skilled managers. Similarly, an authentic, empathetic and inclusive leadership style is needed to bring the next generation of talent along the pipeline in an inclusive way.

The framework aligns with research predictions about the future of work, where our leaders will need hearts as well as brains if they are to give their employer a competitive edge.

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