* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Women's success in finance relies on the sector having managers that create environments that include diverse voices and weeding out the managers who continue to hire in their own likeness
By Dr Grace Lordan, Founding Director of The Inclusion Initiative (TII), Director of the MSc in Behavioural Science and an Associate Professor in Behavioural 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 on behalf of Women in Banking and Finance (WIBF).
I actively listened to the headwinds and tailwinds they had experienced over their career. I heard reports of being ‘mommy tracked’ after maternity leave to being denied opportunities and being excluded from the decision-making processes.
One theme shone through brightly – the success of the final gender convergence relies on the sector having managers that create environments that include diverse voices. The success of the final gender convergence relies on the sector weeding out the managers who continue to hire in their own likeness. The final gender convergence will tackle cronyism.
Based on the headwinds and tailwinds identified by the women that I met, I created ‘The Good Finance Framework’. This framework sets down a clear set of actions that an organisation can take to create a more inclusive culture. If adopted, all talent stands to benefit. Actually, there is one exception – people of all genders who favour people ‘like themselves’.
Underlying the framework are two important movements at the organisation level.
The first is a movement away from relying on compliance-based mechanisms to include women across all levels of the organisation, towards real culture change. Examples of compliance-based mechanisms are audits, monitoring and quotas.
Real culture change has happened when diversity is embraced as a mechanism to innovate, create and assess risk better. The framework highlights that within the financial services sector, we have many leaders that are already there. Now we need more.
I view audits, monitoring and quotas as blunt instruments that were very necessary for the progress we have seen over the last decade. I also expect that the culture change that the framework would bring will augment the effectiveness of these blunt instruments. After all, if there are gender quotas in an organisation that has good culture, there is an understanding as to why quotas are necessary.
The women who get on the board will be fully welcomed and heard, as opposed to being forced to adapt their views and perspective to the status quo.
Second, the framework calls on firms to evaluate their diversity and inclusion (D&I) initiatives. Too much money is being spent given the glacial progress. If firms evaluate where their money is going in terms of return on investment, they can learn what is creating change in their own organisation. This allows them double down on effective initiatives and sink initiatives that are ineffective.
The framework encourages learnings to be shared across organisations. I am certain this can happen, as WIBF have brought together a series of sponsors of the framework, 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 sector will end up leading on the final gender convergence. There are no other sectors that are coming together, in the manner in which the partner firms of WIBF’s Accelerating Change Together programme are coming together, to understand how we can accelerate the final gender convergence.
Overall, the framework is centred around the need for managers to truly understand the value of including women in decisions that shape the future of the sector.
When this happens, we will notice real change. These managers will be high on both competence and empathy. Our work has emphasised that there is too often a trade-off across these domains. The industry needs managers that are highly competent. Equally, a leadership style that is authentic, empathetic and inclusive is required to bring the next generation of talent along the pipeline in a manner that is inclusive.
The framework dovetails with predictions from research on the future of work, where our leaders will need heart as well as brains if they are to give their employer a competitive edge.