Rimes’ panel debate: Equity for women and driving inclusion in the workplace
March 25, 2021
According to McKinsey, one in four women are considering downshifting their careers or leaving th...
On March 8, Rimes convened a virtual roundtable to mark International Women’s Day 2021. The panel comprised Brenda Lyons, Executive Vice President and Global Head Of Asset Servicing Product at State Street; Fiona Horsewill, Head Data & Digital, Custody & Fund Services at Citi; Joanna Dai, Founder & CEO of DAI; and Meryam Omi, Head of Sustainability and Responsible Investment Strategy at Legal & General Investment Management. The session was moderated by Terri Morgan, SVP, Sales Manager at RIMES Technologies. What follows is a summary of key points raised during the discussion.
The impact of COVID-19 on female workforce representation
According to McKinsey, one in four women are considering downshifting their careers or leaving the workforce entirely because of the impact of COVID-19. In the US in December, women accounted for 100% of all jobs lost.
Why has the pandemic impacted women’s careers so dramatically? One explanation is that the majority of non-paid care work, which increased during lockdowns, has disproportionately fallen on women to fulfil. Some women may feel that they can’t do full justice to their work when balancing it with care duties and so choose the latter.
As the return to work gets underway, it’s important for leaders to pay close attention to this issue. It is possible that men will be more willing to return to the office, while women may prefer to maintain a more flexible working approach. The pandemic has shown just how effectively the trading floor can be virtualized, and employers should actively approach a hybrid working environment to ensure that all employees can work in the way that suits them best.
The role of women in sustainable finance
In the past, whereas anything around corporate governance tended to be male dominated, environmental factors were considered “fluffy” and that left an opening for women to carve out expertise.
To be done right, sustainable investing requires breaking through the traditional views of finance and capitalism to focus on true externalities. Additionally, Environmental, Social and Governance (ESG) investing is also one of the few fields where competition isn’t important. With ESG the overall goal is the same and that enables cooperation and collaboration, which are arguably female strengths.
Historically, the private equity market has been hugely underrepresented by women. This is beginning to change, and as it does so firms are starting to ask about factors such as diversity and inclusion measures. There is still much work to be done here, and women can take the lead in focusing private equity firms on ESG as part of the investment process.
Improving female inclusion and retention in the financial services sector
It makes sound financial sense to have a diverse workforce. Research by BCG in 2018 showed that when women business owners pitch their ideas to investors for early-stage capital, they receive on average more than $1 million less than men. However, businesses founded by women actually deliver more than twice as much revenue per dollar invested than those founded by men.
The reasons for this disparity include unconscious bias as well as the different approaches to pitching taken by men and women: whereas men are more likely to over-pitch and undersell, women tend to undersell. Additionally, male investors tend to be less familiar with female founded businesses or comfortable with their business models, many of which are based on personal experiences or delivering against a social purpose.
When it comes to fund and investment performance, women again often outperform men. Having a gendered balanced workforce is not just the right thing to do ethically, it’s also the right thing to do for investors. There is much that needs to be done to get this right. The industry should come together to attract and retain female workers by, for example, mandating that when interviewing for an executive position there is a balanced slate of candidates.
Female representation in the boardroom
Just setting targets is not enough. Where boards have no female representation, the Chairman needs to be questioned about why this is the case. One attempt to do this in 2017 resulted in 58% of the boards queried about their lack of gender diversity hiring women. That’s not enough and the industry need to be vigilant and proactive to drive change.
Voting against companies with no female board members can drive change. However, this needs to be done in the right way. In Japan, for example, academics with no business experience are often appointed to boards in a box-ticking approach. When their lack of experience shows, it bolsters the case of those who think women should not be on boards.
Investors need to question how companies are working to ensure that women are supported throughout their careers all the way up to board level. They also need to work to ensure there is more than one female representative: studies suggest you need 30% female representation to drive real change.
Addressing unconscious bias
One-off training sessions will not make a difference. What’s required is changes to the day-to-day culture of an enterprise. We all have biases, but being able to admit these and recognize when they are coming into play is an important step in addressing them – both as individuals and as teams. People should go out of their way to learn about diverse cultures and to spend time with team members from different backgrounds – particularly if you do not know them well.
Leaders need to create an environment where issues around diversity can be discussed openly. It’s important to acknowledge the challenge and tackle it as a joint endeavour, putting in place metrics to ensure change happens.
The role of government and enterprise policy
In the US, there are a number of initiatives underway seeking to get women more active in politics to drive top-down change. This is to be welcomed. We need as many women as possible to be politically engaged, and that starts with education.
From an enterprise perspective, empowerment is key. Firms should create an environment where all employees feel safe to be themselves and to take risks within a framework. Command and control structures do not always get the best out of people. More flexible cultures that allow people to work in a way that’s suitable for them will get the best out of everyone – women and men.
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