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.
Photo by Jonathan Francisca on Unsplash