‘Boys club’ mentality a real turn-off for women
Less than a fifth of C-suite executives within financial services firms are women, and if the findings of a recent McKinsey & Company report are true, gender parity at the senior ranks could take another 100 years to materialise. Based on interviews with 14,000 employees across financial services firms in the US, the management consultancy’s report dispels the commonly held misnomer that men are favoured more in the promotion-stakes, simply because their female colleagues are less likely to stick around (aka the ambition-gap factor).
Despite both genders entering the financial services sector at the same time and in equal numbers, McKinsey’s research suggests that the playing-field tips increasingly in favour of men, very early into their careers. That’s because men are 24 percent more likely to get a first promotion than a female colleague.
Other factors making the playing-field between men and women increasingly uneven, says co-author of the McKinsey report, Marie-Claude Nadeau include, fewer sponsorships for women in the workplace, and biases within performance reviews.
Vicious cycle self-perpetuates
Nadeau describes gender imbalance in the ‘promotion stakes’ as a vicious cycle that’s perpetuated by an enduring boys’ club mentality that’s endemic within the financial services sector. Instead of making women struggle through this ‘boys club’ mindset, she says the culture within financial services firms needs to change to make it more appealing for women to stick around for the longer haul.
Given that there’s a direct correlation between better performance & profitability, and greater C-suite diversity, the paucity of women on the management teams is a serious issue. If McKinsey’s numbers are anything to go, the number of women at the C-suite level have not budged in the last four years.
Based on McKinsey’s modelling and projection rates, it would take a millennium to get gender parity within the C-suite line-up. What would also go a long way to making financial services more appealing to women, adds Nadeau would be, A) the removal of bias from performance reviews and promotions, B) getting more senior executives to advocate for women, and greater flexibility to promote work/life balance.
The gender gap further up the company ladder becomes increasingly more top heavy. Based on research by Renée Adams, a professor of finance at UNSW Business School, along with professors Brad Barber, from UC Davis, and Terrance Odean from UC Berkeley, only 10 percent of key leadership positions of CEO, chief investment officer, and chief financial officer within the financial services sector are held by women.
The gender imbalance is no better within the financial advice sector, with The Association of Financial Advisers (AFA) estimating that only 20 percent of financial planners in Australia are female. While this male-dominated industry may have repelled women from entering it, there are no real barriers to entry, and added levels of flexibility – around where, how and when financial advisers work – lends itself to much greater female participation.