Where Are the Senior Women in the Financial Sector?

The statistics on the representation of white women and women of color in the financial sector, at both management and senior levels, are grim.

Closing the Gap,” a study conducted by LeanIn.org and McKinsey & Company, looked at thirty-nine financial services companies, which employ 1.2 million people:

  • In North America, women account for fewer than one in five positions, or 19 percent, in the C-suite.
  • Women are 24 percent less likely to attain their first promotion than their male peers, even though they request promotions at the same rate.
  • Women of color are 34 percent less likely to make their first promotion than men in financial services. They face compounded bias due to both their race and gender.
  • Despite the value placed on sponsorship, senior-level women (34 percent) are still less likely than their male peers (44 percent) to receive substantial support from senior management, even though they ask for it at the same rate.
  • Nearly half of senior-level women say they continue to shoulder most household responsibilities while just 13 percent of their male peers say the same. Senior-level women are much more likely to believe that participating in flexibility programs will undermine their ability to succeed at work.

This report notes that “a limited number of female role models in leadership positions may limit women’s motivation to make it to the top.” According to Deanna Strable, executive vice president  and CFO at Principal, “Young women don’t see role models or potential paths towards executive level leadership.”

The research study “Women in Financial Services: Quick Take,” conducted by Catalyst, highlights alarming trends:

  • Between 2007 and 2015, women’s representation in the financial services industry remained unchanged for management at about 48 percent and the executive level at about 29 percent.
  • For women of color, representation between 2007 and 2015 increased slightly at the executive level from 4.1 percent to 4.4 percent.
  • Median weekly earnings in 2018 for financial managers was $1,262 for women, and $1784 for men.

A recent article written by Jack Ewing of the New York Times reports that Christine Lagarde just became the first female president of the European Central Bank. Women are visibly underrepresented at central banks and the US Federal Reserve. Ewing notes that less than one-third of the economists at the Federal Reserve are women.

In a New York Times article, Jeanna Smialek writes that representations is important because “women focus on different issues and have different economic priors than men.” Janet Yellen, the former first female chair of the Federal Reserve, explains that “beyond fairness, the lack of diversity harms the field because it wastes talent . . . and skews the field’s viewpoint and diminishes its breadth.”

Of the big banks in the United States, none have a woman at their helm. Emily Flitter of the New York Times reports that when the leaders of the seven largest US banks recently testified before the House Financial Services Committee, “not one raised his hand in response to a question about whose bank might have a woman as its next chief executive.” Shortly after that hearing, Citigroup became the first giant United States bank to put a woman in line to become chief executive. Jane Fraser will one day be the president of Citigroup, if she decides to wait for the retirement of the current, leader who is not planning to retire for a long time.

Overall, little change has happened in the representation of women in the financial sector, especially in the senior ranks. Smialek cites cultural barriers and biases that are currently embedded in the cultures of banks and other financial services organizations as the cause of this underrepresentation. Thanks to senior women like Janet Yellen and Christine Lagarde, new pressures are now on those institutions to change.


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New Research: Americans Believe Women Are as Competent as Men

I had mixed feelings as I read the report by Maya Salam of the New York Times about new research on the public’s opinion regarding women’s intelligence in comparison with men’s. I am thrilled with the results from by Alice Eagly, a well-known social psychologist at Northwestern University, that reflect this significant measure of social change for women. At the same time, I feel exasperated about how long it has taken for Americans to see women as competent. And I feel sad about the underrepresented women in the United States who are still not valued and women in all regions of the world who are still voiceless and powerless. Nonetheless, this research by Eagly is good news. Salam notes that the study “published by the American Psychological Association . . . found that a majority of Americans (finally) believe women are just as competent as men, if not more so.” (Emphasis in original.)

Eagly and her colleagues studied opinion polls from 1946 to 2018 looking at how Americans rated a number of factors, including competency (defined as intelligence, organization, and creativity) along gender lines. Here’s what they found:

  • In 1946, 35 percent of people thought men and women were equally intelligent.
  • In 1995, 43 percent thought men and women were equally intelligent.
  • In 2018, 86 percent thought men and women were equally intelligent.

Eagly reportedly told Salam that these findings represent “massive social change.” Eagly notes that one important factor contributing to this change is that until recently, few women were in visible leadership roles. Salam notes that this situation is now changing: in 2019, college-educated women edged out college-educated men in the workforce and, for the first time, six women stepped forward to run for president and were visible on the debate stage for the first two Democratic debates.

Many women are stepping into visible leadership roles. Here are just a few:

  • Christine Lagarde—Already a groundbreaking visible leader for some time now, Christine Lagarde has just broken another barrier. David Segal and Amie Tsang of the New York Times report that she has just been named the new president of the European Central Bank, becoming the first woman to be picked for this role. She will leave her post as the head of the International Monetary Fund where, appointed in 2011 as the first woman to hold that post, she successfully steered the economies of many countries reeling from the global financial crisis. Lagarde is committed to promoting women as a moral urgency. She states that her research shows that “a higher share of women on the boards of banks and financial supervision agencies is associated with greater stability. . . . If it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.”
  • Julie Sweet—David Gelles of the New York Times reports that Julie Sweet has become the first female chief executive of Accenture. With her appointment, twenty-seven women now lead S&P 500 companies. Her promotion means that slightly more than 5 percent of the biggest public companies in the United States are currently led by women. Sweet has been a leading voice within Accenture for diversity and inclusion in the workplace and the development of more female leaders in the corporate world. She intends to maintain her commitment to diversity and inclusion in her new role.
  • Sarah Zorn—As she completes her term as the first female regimental commander of the Citadel, a military college in South Carolina, Sarah Zorn provides another example of a woman in a visible leadership role. Alyssa Schukar of the New York Times notes that “for most of its 176-year history, the Citadel . . . did not admit undergraduate women.” Only in 1995, when Shannon Faulkner won her two-year court battle to be admitted, did the state school allow women in, by a ruling from the Supreme Court. Twenty-four years later, women make up 10 percent of the Citadel’s student body, and 25 percent are students of color. Since Zorn ascended to regimental commander as a twenty-two-year-old junior, the school has seen a record number of female applicants.

These women are just a few of those breaking barriers to become visible examples of women’s competence as leaders. We still have a long way to go to reach parity, but change is moving in the right direction—slowly but surely.


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Gender Judo

One of my favorite authors and researchers, Joan C. Williams of the Center for WorkLife Law at the University of California Hastings, just published new research on the likability trap for women. She reports on both her own research and other new studies that show the ways successful women overcome the likability trap and offers practical strategies that many women will find useful.

What is the likability trap? Williams defines it as a double bind that women face when they move into positions of leadership and need to be assertive and direct. She explains that the problem is in today’s American society, women are expected to be helpful, modest, nice, and indirect while men are expected to be direct, assertive, competitive and ambitious. When women move into the traditional male domains of leadership, where demonstrating masculine qualities is necessary (which women can do quite well), they do not fit the feminine stereotype. Men and women both can become uncomfortable with them. They are deemed unlikable and can find it difficult to be effective. In her interviews with two hundred successful women, Williams found that “savvy women learn that they must often do a masculine thing (which establishes their competence) in a feminine way (to diffuse backlash),”or as Williams calls it, “gender judo.” Gender judo requires extra effort for women that men don’t have to expend, but successful women report that they have to do it.

What are some strategies that successful women use? Williams pulls from her own and others’ research to describe some strategies that work. She also warns that some may be hard for the reader to swallow, but they are, unfortunately, necessary and effective. Here are some strategies for leading in a feminine way:

  • Playing Office Mom—Some successful women adopt the strategy of Office Mom. One former chief executive explained, “I’m warm Ms. Mother 95 percent of the time, so that the 5 percent when I need to be tough, I can be.” She embraces the stereotype that women are naturally nurturing so she can be assertive when she needs to be, a form of judo when you can intentionally flip back and forth from one direction to another to maintain momentum and survive and thrive as a woman leader.
  • Using a social impact cover—Williams reports that social scientists Matthew Lee and Laura Huang found that female entrepreneurs are more likely to get venture capital funding if they pitch their companies as having social impact. This “cover” helps overcome the mismatch of the stereotype of a good, community-focused woman with a hard-driving entrepreneur.
  • Negotiating—Numerous studies have been reported in recent years about the double bind for women when negotiating. Williams summarizes this research as “women who negotiate as hard as men do tend to be disliked as overly demanding.” Women have to use “softeners,” such as asking questions for clarification of the salary rather than assertively making demands. Men can just be direct and make demands.
  • Using femininity as a toolkit—This strategy requires some experimentation. Being an authentic leader is important, so each woman may have to find what works for her to do something masculine in a feminine way. For example, some women try smiling more or being more relational and asking about people’s families—which can feel unnatural for many people. Williams does caution, though, about not using a submissive conversational style, like apologizing and hedging, which can undercut your leadership credibility. Some women try to find a good mix of authoritative mixed with warmth that works for them.
  • Displaying gender—This strategy might be harder for some than others, but Williams found that some women in her study reported that wearing feminine clothes or pink lipstick when they are the only woman in the boardroom or on the leadership team helped to soften their impact on the men.

In this report, as in her book What Works for Women at Work, Williams suggests some steps that organizations can take to create cultures where women do not face barriers to success because of gender or race:

  • Organizations need to be aware and vigilant about challenging the biases that force women to take these extra measures to succeed.
  • Reward systems need to stop rewarding behavior considered appropriate for white men while punishing women and people of color for not fitting neatly into the stereotypes for their groups.
  • Both women and men should be rewarded for displaying empathy and putting the common good above self-interest.

The fact that women have to perform gender judo is unfair. But the more we talk about this double bind, the closer we get to gender equality at work.


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