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Practice Management > Diversity and Inclusion

The Future Can Be Female: Starting the Finance CEO Pipeline Earlier

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What You Need to Know

  • The pipeline to mentor women for the C-suite has to begin sooner than career age.
  • Boys learned computer games early, thus were not intimidated by coding as they got older.
  • Girls should be trained, especially in investing, at an early age to be prepared for the business world.

When I walk into a room and see a crowd full of white men over the age of 40, I know I’m in the right place. Lack of diversity in the asset management industry is a fact that is palpable.

Earlier this fall, when Jane Fraser was announced as the next CEO of Citigroup, there was much celebration for the first woman to head a Wall Street bank. One Fortune headline promised a tell-all about how Fraser “broke banking’s highest glass ceiling.” An article in the Financial Times stated that there was an “amorphous sense of tribal pride, a collective ‘we did it.’”

But given Citi’s recent regulatory troubles — resulting in a $400 million fine for “unsafe and unsound banking practices” — Fraser’s promotion may appear, to the cynical, like just another example of an extremely capable woman being appointed to a glass cliff. It’s been well documented that women and minorities are more likely to be promoted to “top leadership roles when an organization is in crisis.”

Still, regardless of the mess that needs cleaning at Citibank, having more female leaders, visible role models, is crucial for developing the next generation of female leaders in finance.

Moving Forward — Maybe?

Cited in the same Fortune piece was a McKinsey study comparing the rates at which men and women climb the ladder in banking and consumer finance. While 51% of entry-level banking and consumer finance employees are women, only 26% of the industry’s C-Suite roles are occupied by women.

Meanwhile, women have obtained bachelor’s degrees at higher rates than men since the early 1980s, though Glassdoor reports that men are taking 61.5% of degrees in finance.

Portfolio management is particularly devoid of women, with Morningstar finding that in the United States, the ratio of male to female fund managers is 9 to 1. And despite the number of female portfolio managers staying pretty much flat since 2000, it appears as though positions for male portfolio managers have grown somewhere around 55% over the past 20 years.

Real World Perspective

These disturbing numbers hold true in my experience. I was recently included among CityWire’s top portfolio managers for my fund’s category, where only two women made the top 50 and only nine women rounded out the top 100.

I guess the silver lining here is supposed to be that Morningstar’s study found that the lack of gender diversity among fund managers has nothing to do with issues of poor performance.

Looking around and seeing very few other women is something I also experienced as an undergraduate majoring in computer science.

I was drawn to computers quite young: my family had a Commodore 64 and then later, a Macintosh to share among five siblings. (Note: is there anything more iconic than the “1984” Macintosh commercial, with a strong female athlete running to free the drones and destroy Big Brother?)

Our family had a guide as thick as a phonebook (back then) of BASIC computer games that we could try to program. There was something that charged me up about getting the games to work: If you typed in the language correctly, the computer would respond — and you could play.

But outside of my family home, as a young teen in the 1980s, I noticed it was mostly boys who were spending their free time on computers. They appeared to be much more motivated to learn how to break down and set up computer networks to play games than the girls. And it turned out that the boys became more comfortable, more experienced and then later more dominant.

In college, that comfort — or lack of intimidation — translated into an instinctive grasp of computer science. The boys who had played games children had parlayed their knowledge into serious application.

That play and gamification are critical for making potentially challenging subjects fun instead of overwhelming. Beyond computer science, finance was another natural call for me — largely because I saw both of my parents doing it. I didn’t grow up with any reticence or self-consciousness around investing because I’d been playing at investing with my parents for my whole life.

Starting Young

The important work of mentoring and promoting women early in their careers to help them rise through the ranks in this industry cannot be overstated, but I also want to focus on starting the C-Suite pipeline even earlier, when kids are still just playing.

How can we purposefully grow future female finance CEOs, when it’s so unusual to have a mother as interested in investing as mine was?

Much has been said about the need to include personal finance among high school curriculum, but what about classes that teach about the power of money around the time elementary students first learn to count money?

Junior Achievement and Girls Who Invest each have programs that have been successful in encouraging financial literacy among youth, but if we wish to see more women in finance, it’s up to us as role models to volunteer in schools and other youth organizations to encourage play from an early age.

We also can help to teach young girls the power of money by linking it to achieving better environmental and social outcomes. After all, as values-based, sustainable, and impact investors know, money is often the key to making real change in this world.

Jane Carten is president and CEO of Saturna Capital, a Bellingham, a Washington-based investment management firm with $5 billion in assets and a 30-year history, managing a number of sustainable/ESG-focused funds, including the Amana Growth, Amana Income and Saturna Sustainable Bond and Sustainable Equity funds.


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