More women in finance, a more sustainable economy
If one-third of corporate board members had been women, Wall street might have avoided a meltdown.
(Page 2 of 2)
Within one year of women gaining the right to vote, local public-health spending increased by 35 percent, averting what researchers estimated would have been some 20,000 child deaths per year.Skip to next paragraph
Subscribe Today to the Monitor
Norway's law requiring listed companies to make sure 40 percent of directors are female has been called a tentative success. Instituting such quotas in the US might present legal challenges and resistance from management.
Voluntary campaigns to recruit and retain more women and people from underrepresented groups, on the other hand, would not only benefit businesses but the economy as a whole.
Shifting the lack of diversity in the top echelons of the financial sector is not just about finance, nor is it about boosting women for their own benefit. This is about men and women working together to create a more sustainable and stable financial system.
Women represent a scant 10 percent of all traditional mutual-fund managers and a mere 3 percent of the approximately $1.9 trillion invested in hedge funds, according to recent research. The needed shift in financial and other circles won't happen as long as we settle for a few token "skirts" at the nation's most entrenched boys' clubs.
Study after study confirms that men and women bring different and complementary sensibilities and leadership styles to the table.
A 2005 study from the Center for Financial Research at the University of Cologne in Germany documented differences between male and female fund managers: Women managers tended to take fewer extreme risks and to adopt more measured investment styles (which perform well over time).
And according to research published in 2002 in the International Journal of Bank Marketing, women tend to make investment-related decisions with a detailed, comprehensive approach, while men are more likely to simplify data and make decisions based on one overall strategy.
We have to work together – risk-averse and risk-prone, detail-oriented and big-picture thinkers – if we are going to participate in the global market strategically and wisely.
One of the main obstacles is the misperception of women as weaker leaders and decisionmakers. Gender stereotypes continue to portray strong executives as predominantly male.
Also, women have fewer networking opportunities than men and lack some of the strategic mentorships and sponsorships associated with career advancement. There is also a reluctance to move women into jobs that require long hours and extensive travel, based on concerns about their ability to balance career and family.
•Challenge stereotypes through management training throughout organizational structures.
•Provide diversity education to broaden perceptions and promote the business case for diversity.
•Set clear performance standards and evaluation criteria for promotions.
•Strengthen and expand the leadership pipeline by providing women with training in leadership and negotiating skills as well as access to networks and mentors.
It's now or never. If we don't adopt a "critical mass principle" – and it's up to those in the sector to figure out how to set industry-wide goals – we'll be doomed to more of the same conventional wisdom that led us down this destructive path of short-sighted and unstable financial hubris.
Playwright Eugene Ionesco once wrote, "Ideologies separate us. Dreams and anguish bring us together."
Indeed, these economic times have brought on a shared anguish for so many people – rich and poor, men and women alike. Now it's time to get serious about reform and innovation that welcome a diversity of outlooks to set us on a more balanced and sustainable course.
Linda Basch is president of the US-based National Council for Research on Women that, late this month, it is set to release "Women in Fund Management: A Road Map for Achieving Critical Mass and Why it Matters."