Women are underrepresented and undervalued in the financial sector. But non-male perspectives make for better decision-making.
As a relative outsider to the financial world, I was looking forward to this month’s Pension Playpen, a group which discusses issues in the industry over lunch. This time, they were asking: why aren’t there more women in finance? I wanted to know how diversity was being talked about in an industry which seems to be run by men. So I was relieved and pleasantly surprised by an hour long discussion which was insightful, respectful, and where female voices were heard loud and clear.
Why is diversity important in the first place?
One of the ideas we kept coming back to was that diversity leads to better decisions. When people with different perspectives and backgrounds tackle a problem, they think about it for longer, and more carefully. They have to consider how it will affect people who aren’t like them.
We talked about studies which looked into how different groups handle a problem-solving task. A group of 4 friends will have a great time doing it, and report that they did brilliantly. But as it turns out, their success rate is a lot lower than the groups which had to swap a friend for a stranger. These groups may have had less fun, and a less easy ride reaching a consensus, but introducing a different perspective made for better results. Disagreement and difference leads to better decisions. Familiarity and homogeny leads to decisions which are more rash, more selfish, and replicate what’s gone before. Which brings me to the financial crisis.
‘Women have different ways of taking risks … of ruminating a bit more before they jump to conclusions’ (Christine Lagarde)
There’s good reason to think that it wouldn’t have happened with women in charge. Women tend to consider more facts when assessing risks or opportunities. Which means women tend to take less risks. And if we know anything about the financial crisis, it’s that it was the result of some short-sighted, arrogant and reckless decisions.
You might think this would bode well for women in finance. In the aftermath of near financial ruin, brought on by misplaced confidence, it would probably make sense to embrace an approach which was more deliberative. More measured. Less typically ‘male’.
But it seems that the ability to take risks is a key part of getting ahead in this industry. By ‘taking risks’, I don’t mean investing massive amounts of money into mortgage-backed securities on the shaky assumption that house prices weren’t likely to decline, sparking a chain of events which led to the near collapse of world’s financial system. No, the kinds of risks we talked about were things like applying for a job even if you don’t meet all the entry requirements. One of us mentioned a study which shows that men will apply for a job if they meet 60% of the requirements, whereas women will only apply if they meet 100% of the requirements.
‘If I don’t know about something I’ll know it by tomorrow. Therefore I do know everything about everything’ (Scott from The Apprentice)
Another personal risk you might take day-to-day is speaking to someone even if there’s a chance they’re not interested in what you have to say. The women in the room shared experiences of everything from board meetings to my philosophy seminars from undergraduate days, and our suspicions were confirmed – in most settings, men tend to dominate discussions, at the expense of women who have valuable things to say.
Being averse to this kind of risk – the kind of risk we take when we choose to suggest an idea in a meeting at the risk of not being taking seriously – affects the kinds of job roles women are seen (and see themselves), as being able to do.
For example, think about the traits we typically think a good salesperson has. Confident. Persistent. Willing to do almost anything to secure the sale. Doesn’t take no for an answer. In other words, all the risk-embracing traits women are trained from birth not to exhibit.
‘Such a nasty woman’ (Donald Trump)
And who could really blame us. Look at any example of a woman who’s progressed to the dizzy heights of management, or leading a country, and once you get past the analysis of the skirt she’s wearing that day you’ll find a slurry of commentary about her character. ‘Bossy’, ‘ruthless’, ‘abrasive’, and ‘hard to work with’ are common choices to describe women who have dared to step above their station.
So it seems we can do no right. If we quietly and competently get on with our job, we don’t progress. (One of us talked about her frustration at time and time again seeing younger, less qualified men overtake her in her company). And if we do muster up the confidence to chase a promotion – and manage to be picked over men who have been referred through a boys’ club recruitment process – then we’re bloody difficult.
As we reached the end of the discussion, it was clear it had gone well. We all agreed that the time had flown by. Discussions like this, which identify the problems which are holding women back in their careers, are becoming more and more common. What we need to do now more than ever is figure out how we’re going to fix them.
Share your experiences
Having these kinds of conversations brings things that are hidden in plain sight into public scrutiny. The more they’re talked about, the quicker these practices will become unacceptable, and the better decisions businesses will make. So please join in the conversation.
A guest post by Jess Jones
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