Today I am going to pose a simple question that has been asked any number of times: Why are there so few women in senior positions in finance?
This question has come my way a lot. People have asked why we don’t have more women as guests on Masters in Business (we have had Sheila Bair, Liz Ann Sonders, Michelle Meyers, Dambisa Moyo and this weekend is Saru Jayaramen). But the data shows that there are far more males than female guests, and even though we have more women scheduled in the coming months, it’s still nowhere close to 50-50.
That sort of underrepresentation is common in senior positions at financial firms small and large alike. Some of this may be a legacy of what has not only been a male dominated society, but it probably also reflects an industry that is particularly resistant to change. (Disclosure: At my firm, two of the 13 employees are women, though neither is on our investment committee.)
Why is this so?
The rough answer is obvious — there are simply not a lot of women in senior positions in all of business, and finance to a great extent mirrors that reality. There are, however, signs of change for the better, which we will get to later.
Some data first.
A Morningstar study last year found that:
Less than 10 percent of all U.S. fund managers are women; women exclusively run about 2 percent of the industry’s assets and open-end funds. By contrast, men exclusively run about 74 percent of the industry’s assets and 78 percent of funds, with mixed-gender teams accounting for the balance.
The numbers are similarly lopsided for various niches of the financial industry: Harvard Business School research on private-equity, real-estate and venture-capital firms shows the percentage of female senior investment professionals is “stuck in the single digits.” But it’s much more than just the senior executives — women make up only 17 percent to 23 percent of all employees.
That’s true across the universe of investing firms, as well as the broad array of companies that make up the Standard & Poor’s 500 Index. According to Catalyst, there are now only 20 women chief executives of S&P 500 companies, down from 24 in 2015.
CNN/Money notes “only 14.2 percent of the top five leadership positions” were held by women at these companies. Last year, women made up 17.9 percent of the directors of Fortune 1,000 companies. The number of female certified financial planners appears to have plateaued at about 23 percent.
Meanwhile, studies by Credit Suisse Research Institute have shown that increasing women on corporate boards is associated with better financial performance. McKinsey & Co. and Catalyst have reached similar conclusions.