Why aren’t women making more progress in finance?
Barriers to advancement for women working in financial and professional services in London are explored in a new qualitative study conducted by the London School of Economics, on behalf of Women in Banking and Finance (WIBF), a nonprofit organization. An obstacle? Male managers who aren’t that great at their jobs.
Half of the women who participated in personal interviews “explicitly” mentioned “mediocre” men in management as a hindrance to their career advancement, according to the study. They pointed to men being skilled at internal politics within a “social club” and cited less judgement for incompetency as giving them an advantage. The women said they are held to higher standards compared to their male counterparts. A number of women in front office as well as in communications and compliance positions said there were fewer “mediocre” men in roles where they had P&L responsibility. But if the men didn’t perform well, they were moved to roles where their lack of skills wasn’t obvious.
What traits in managers create the most obstacles for women? Managers with a combination of low competency and low empathy.
“This type of manager was reported as creating a toxic and competitive environment; all examples of low competence-low empathy managers were men,” according to the study. Women in communications and compliance roles reported experiencing this type of manager the most.
Researchers also noted the progress of Black women in the financial sector is “unexplainably slow.” It may be caused by unconscious bias in the rollout of current initiatives or “a barrier to access that has yet to be identified,” according to the study.
WBIF created a Good Finance Framework based on the feedback from the 44 women who participated in the personal interviews, the perspectives of 35 women who attended roundtables, and a survey of 1,703 respondents. The framework offers 10 actions companies can take to become more inclusive and retain talented women. Upskilling managers to have an empathetic leadership style, creating incentives to reward inclusive managers, and encouraging flexible and autonomous work styles are among the suggestions. The study sponsors included BlackRock, Goldman Sachs, and Morgan Stanley among others.
Taking a look at the U.S., BoardEx’s analysis of 1,229 publicly traded financial institutions released in March found that women are represented in 3% of the CEO positions in financial services; 15% of CFO roles; and represent 21% of chief operating officers, according to Barron’s. Though progress has been slow, women are making strides. This year, Citigroup CEO Jane Fraser became the first woman to run a major Wall Street bank and Thasunda Brown Duckett became CEO at TIAA.
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Microsoft's report, The Next Great Disruption Is Hybrid Work – Are We Ready?, found flexible work is here to stay. "The data is clear: extreme flexibility and hybrid work will define the post-pandemic workplace," according to the report.
Accenture's recent survey found that 73% of CFOs said they're positioned to drive organizational resilience, but only 7% have made significant gains over the past few years. And, just 5% of CFOs have achieved "future-ready" operations, with just over a third (35%) expecting to be there in the next three years. Applying digital technologies like automation and A.I. to optimize core functions can help finance professionals to "double down" on strategic operations, according to the report.
Melissa Lee was named CFO at Daiya, a plant-based foods company. Lee most recently served as vice president of corporate FP&A at Walmart Inc.
Patrick McClymont was named CFO at Orchard, a home buying marketplace. Sean Roberts, formerly Orchard's CFO, will become chief operating officer. Most recently, McClymont served as CFO and EVP at IMAX Corporation.
"I think we’re at this tectonic shift in financial services that is kind of like what happened to offline retail with Amazon 15 years ago. We’re at the very beginning of this generational transformation, in a zero-sum way, from the old guard to the new guard."
—Mark Goldberg, a partner at Silicon Valley venture capital firm and Plaid investor Index Ventures, as told to Fortune.
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