The funds management industry is well versed in the benefits of investment diversity, which was first proven way back in the 1950s with the establishment of Modern Portfolio Theory. Why then have we not embraced gender diversity?
In a 20-page white paper entitled: ‘Gender Diversity – The Real Reason We Are still Talking About It‘, AMP Capital attempts to identify and suggest ways to overcome the roadblocks that hold the industry back on the road to greater gender diversity.
The paper, written by Karin Halliday, senior manager, corporate governance, at the firm, says: “We know women are different to men and can bring a different perspective to team dynamics and problem solving but. Rather than excluding women on the basis of these difference, they should be included for them.
“We generally understand the need for greater diversity, yet it appears each of us has roadblocks and biases so deeply entrenched they make us part of the problem and hence contribute to the inertia…
“It’s no longer OK to simply agree that someone needs to do something. As employers, employees, educators, men, women and, yes, even investors, we all need to take ownership and become part of the solution,” Halliday writes.
The paper includes research, case studies and interesting pieces of anecdotal evidence about the issue. For instance, in Australia women of any name are less likely than men named ‘Peter’ to be appointed chief executive or chairman of a company. In the Australian companies held in AMP portfolios, there are more chief executives and chairman named ‘Peter’ than the total number of women in those roles.
A total of 46 per cent of all employees in Australia are women. But they hold only 14 per cent of chair positions, 15 per cent of chief executives and 27 per cent of “key management” positions. So, where do women go?
The paper looks at the various reasons women leave the leadership path. And it’s not all about having babies. The main reasons are:
. Lack of women leaders as role models, making it more difficult to both sexes to visualise women as successful leaders.
. Lack of understanding and appropriate opportunities –
“[women’s] performance must be evaluated objectively as women who are in the gender minority within a leadership team may struggle to fit into the network, thus impacting their chances of promotion or development opportunities.”
. Lack of support – women still carry out the greater share of household duties, meaning help is needed around parental leave and child care.
. Lack of confidence and ability to self promote – men tend to display overconfidence and women undersell their capabilities.
. Lack of testosterone – confidence, perhaps too much of it, energy levels and greater acceptance of risk tend to be hormonally linked and are traits generally associated with successful leaders. Many women get tired of pretending they are something they are not and opt out of the race. Ironically, risk aversion and realistic assessments of abilities, more likely to be found in women, should be coveted in the funds management industry.
. Lack of financial means – the gender pay gap remains a permanent fixture of the landscape despite major advances in average education standards among women and workforce participation.
The paper suggests that we all need to: acknowledge the problem; understand our biases and address them; champion the benefits of diversity, and: set measurable targets and report progress.
* Greg Bright is publisher of Investor Strategy News (Australia)