While many financial services companies have made strides towards improving gender diversity, women are still behind at the C-suite and nearly all prior stages of promotion. At a recent gathering of business and human capital leaders from across the investment management industry, we learned that 73% of attendees believe there is broad support for diversity across their organizations but only 58% believe that their firms’ gender diversity initiatives are working.
Multiple studies have shown that gender diversity in leadership and in teams drive profitability and create value. According to Morningstar, having one or more women on a new fund’s management team improved the odds that it would attract enough assets to be successful, and mixed-gender teams generate more alpha than women-run or men-run funds. However, there are deeper structural and systematic challenges standing in the way of financial services companies improving leadership diversity. Our experts offered recommendations on effective tools and processes to overcome these challenges and support a more inclusive workplace.
Last month, Jamesbeck hosted its Women in Leadership Roundtable in New York to help the asset management community advance equality and inclusion for women. The industry panel was moderated by our executive coach Meg Staczek and featured Margo Cook, President of Nuveen Advisory Services; Sarah Melvin, Head of the Institutional Client Business for the US and Canada for BlackRock; Bob Gottlieb, Former Chief Human Resources Officer for KKR; and Claire Wasserman, Founder of Ladies Get Paid.
Below is a brief recap of some of the top strategies for attracting and mentoring female leaders:
- Building a diverse workforce starts with the hiring process and a “plus one” approach. Interview slates should include more than one female candidate as this helps reduce any natural bias in the selection process. In addition, having more than one female interviewer will promote a broader perspective when evaluating candidates.
- That said, meritocracy cannot be sacrificed for diversity, and so candidates should still be selected for their skills and qualities to maintain strong teams and prevent any misconceptions about diversity-only hiring.
- While mentors are important, diverse leaders have greater success when they have company sponsors. Sponsors support and advocate for women, as well as use their personal credibility to help them succeed.
- Focus on educating all employees on the importance of the issue by holding unconscious bias training. This can build awareness around subtle roadblocks for women, for example the tendency for executives to give women the “creative” jobs or assume that a woman wouldn’t take on a certain role because they have or might have children. Challenging those assumptions can help to ensure that women are given equal opportunity.
- It’s important to recognize the difference in male versus female leadership styles and unconscious biases. Providing executive coaching and training will help to ensure a smooth transition and fair chance at success.
- Call out unconscious bias when it does appear in the workplace to start exposing how it’s ingrained in corporate culture. For example, point out when a woman is cut off in a meeting or is written off for an opportunity.
- It’s important for gender diversity initiatives to have open support from the top, which will trickle down and make the issue a firm-wide priority. C-Suite executives should sponsor diversity-focused events and be the voice of initiatives to reinforce this message.
- Take a public stance by announcing diversity goals and identifying someone to spearhead the initiatives. This will hold firms accountable and attract high performing women and minorities to reinforce an authentically inclusive environment. Furthermore, discussing with clients and gauging their thoughts will highlight the importance of this issue for all stakeholders.
- Offering benefits geared towards women and families is a key component of support. This includes establishing a strong parental leave program, offering child care options at the office or during business travel, and/or instating a path back for women returning from time spent raising children. Furthermore, encouraging men to take advantage of these benefits and paternity leave helps normalize the culture and make it about parents, not just mothers.
As the race for growth and demand for diversity continues, organizations must continue to examine how they can strengthen diversity and create more equality in their leadership ranks by implementing these strategies and widening the net for new talent. We plan on hosting additional roundtables, and if you would like to attend or discuss these issues further, please feel free to reach out. We would love to hear from you!
The Jamesbeck Team