“There is no limit to what we, as women, can accomplish” Michelle Obama.
Why then, are there fewer women in leadership positions in the financial planning sector?
Marion Burchell, Managing Director Azolla, was recently asked to deliver a GROW Leadership and Confidence session to answer this question[1].
Women remain under-represented in Financial Services and are poorly represented in senior leadership positions in the industry[2]. Despite gender parity at entry-level (49%), representation of women in c-suite positions significantly decreases (23%), resulting in one of the toughest conditions for aspiring female leaders of any industry.
While there has been a general increase in female representation in leadership roles, it is clear that the working world still excludes, underpays and overlooks half of its available talent. The World Economic Forum reported that at no age were more than 50% of women working full-time, yet higher paid management opportunities are mostly exclusively reserved for full time workers[3].
Research indicates a major argument raised for this is women self-selecting out of the workplace due to reasons such as being the primary caregiver (children or aging parents), feeling unfulfilled in the part time work they are given and return to work in lower paid positions.
Marion believes the real reason is more fundamental – workplace structures were not made for contemporary, modern lives. As a result, women select out of the workplace due to:
- stress and burnout due to unmanageable workloads which have been the product of women having to work twice as hard to advance
- negative workplace behaviours such as harassment, bullying and microaggressions
- under-valuing of the skills, knowledge and expertise they bring and contribute
- dissatisfaction that senior leadership permit toxic behaviour and unhealthy workplaces
- all culminating in not feeling like they have a valid voice in the organisation where they can express these concerns without being deemed a troublemaker
Essentially, women are choosing to not work in toxic, dead-end, frustrating positions for companies that don’t support their advancement.
Women place a higher emphasis on values, being motivated by intrinsic factors rather than extrinsic factors, which workplaces are architected around[4].
Women have enormous capacity and are constantly in motion, focusing their energy on things that matter. They make calculated decisions on where best to place that energy, and will not waste their time when there is little gain, impact, value or outcome in doing so. This is the real reason why women opt out of the workplace.
It could be said that all other reasons, while they have some weight, provide a convenient diplomatic exit so as to not rock the boat. The drive for workplace parity has been primarily focused on values, equity and “the right thing” which has resulted in some progress, albeit slow. The time has come for systemic change – and change will happen – thanks to economic pressures.
History is littered with examples of systemic change driven by economic circumstance.
- During World Wars 1 and 2, women successfully managed businesses and operations having a positive economic effect. In Alabama for example, manufacturing plants would not have been as productive or successful without women in the workforce[5].
- Countries that historically prevented women from driving created societal change allowing women to drive due to the economic impact to the country as a result of the inefficiency of having to wait for transportation several times during the day to undertake activities.
A perfect storm is on its way and will require systemic changes in the workplace that deal with the real issues. This will require courageous leadership, deep conversations, and a commitment to deliver change.
Countries around the world have an aging demographic, with older people comprising one fifth of the population in 17 countries, and by 2100, 61% of the world’s population will fall into this category[6]. The usual tactic of attracting skilled migration will no longer be reliable as the marketplace for skilled professionals will be very competitive. Instead, companies out of necessity will need to re-design workplaces (culture, ways of working, job requirements etc) to attract a demographic readily available, suitably skilled, and willing to participate. And this is not just about women, but all peoples who have been in the shadow for far too long.
In a world of increasing complexity, having both men and women in leadership roles will be imperative to successfully navigating the unpredictable, volatile, and uncertain waters in which we find ourselves. Given the lack of precedent, regulatory framework, and the need to maintain and grow market competition, ethics will play an increasingly important role in decision making. The fact that men and women have different logic flows and make different ethical decisions is a real strength and helps organisations make better decisions.
Specifically related to the financial services industry, a university business school study on board gender diversity and corporate tax evasion showed that over 20 years of data, women across executive and corporate leadership roles reduced the likelihood of tax evasion. This is further reinforced by Scientific America that concluded men were more likely to minimise the consequences of their decision making related to strategic endeavours[7]. It has been found that women generally make fairer decisions as they consider the rights of others and take a cooperative approach to decision making[8].
In addition to making fairer and more collaborative decision making, research also demonstrates that women outperform men in key leadership competencies[9]. If the best applicants get the job, why then aren’t there more women in leadership roles?
The main culprit that gets raised is women lack confidence. A study conducted by Harvard Business Review found that 80% of men did not mention confidence being a factor related to their own trajectories. It was only mentioned in relation to women’s career trajectories as being a key factor holding them back[10]. I suspect the reality is far more nuanced than blaming a lack of confidence. It relates to a lack of acknowledgment of other leadership qualities such as humility, creating psychological safety, developing others, creating strong teams, genuine self-development and so on. Instead, there is an overvalued correlation of confidence equalling competency. Without any checks and balances put in place to test if confidence can be backed-up by other leadership skills as well as ability, this has created the type of workplaces women actively and consciously opt out from.
There is nothing broken about women. There are things broken about old workplace structures that no longer serve organisations being successful and sustainable. We all need to place our egos aside to ensure the longevity and viability of industries like financial services by re-imagining what is possible.
[1] Note: this professional development session received accreditation for professional development points
[2] https://www.weforum.org/reports/global-gender-gap-report-2023/in-full/gender-gaps-in-the-workforce/
[3] https://www.wgea.gov.au/newsroom/new-age-data-released
[4] https://www.aijssnet.com/journals/Vol_2_No_2_March_2013/1.pdf
[5] https://www.archives.gov/education/lessons/wwii-women.html
[6] https://www.un.org/en/development/desa/population/publications/pdf/ageing/WorldPopulationAgeing2019-Highlights.pdf
[7] https://www.scientificamerican.com/article/when-men-are-less-moral-than-woman/
[8] https://www.labmanager.com/women-make-more-ethical-decisions-study-finds-12281
[9] https://hbr.org/2013/09/women-in-the-workplace-a-research-roundup
[10] https://hbr.org/2022/10/how-confidence-is-weaponized-against-women