Be bold for change

 "Each of us has a part to play and to declare those bold actions that we think will make a difference for women in our industry”

In celebration of International Woman’s Day 2017, BlackRock Asset Management, in conjunction with the CFA UK Gender Diversity Network, hosted a breakfast briefing on the topic of women in finance.

  • Marilyn Watson, head of global fundamental bond product strategy at BlackRock. (moderator)
  • Margaret Frost, CFA,  head of UK institutional at Allianz Global Investors.
  • TinaShé Tande, part of the UK business development team at Schroder’s.
  • Ahmed Talhaoui, CFA, co-head of global fixed income product strategy at BlackRock.



There is no way to dress up the fact that women are grossly underrepresented in the financial services industry, especially in the most senior and revenue generating positions. The number of female portfolio managers in particular is very low across the capital markets, and markedly so in alternatives, says Allianz Global Investor’s Margaret Frost.

In the course of a 25-year career, Frost - who likens the chance of encountering a female hedge fund manager to running into a unicorn - has extensive portfolio management experience. She, however, is an outlier; according to Citywire’s global fund manager database, at the end of March 2016 just 9% of investment managers in the UK were female. Worldwide the percentage is even worse; only 7% of investment managers globally are women, with responsibility for managing just 4% of global assets.[i]

And yet, a growing body of evidence suggests that the issue of equality aside, gender disparity is bad for business; companies with greater gender diversity tend to perform better relative to their peers. A 2014 study [ii] showed that greater diversity at the board and management level are associated with higher returns on equity, higher price/book valuations and superior stock price performance. Similarly, in the asset management sphere, a number of studies attest to the advantages of gender diversity. Hedge funds run by women have outperformed a broader benchmark of alternative investment managers over the past five years to the end of February 2017 (HFRI Women index versus HFRI Fund Weighted Composite index, which covers hedge funds across all strategies and genders).[iii] Women only funds also outperformed on a year-to-date and three-year basis.

Advantages of diversity

To BlackRock’s Ahmed Talhaoui, the advantages of diversity seem obvious. “Diverse workplaces, as with de-correlated assets, work better. Homogenous environments are at risk of group think, which can impact effective decision making and investment allocation decisions.”

In an industry in which performance counts for everything, lack of diversity then could prove costly. Which begs the question: why has the number of women in finance remained so stubbornly low, particularly in senior and risk taking roles?  

One of the key factors hindering women from even considering finance as a career is the lack of information on the variety of roles available, says Schroder’s TinaShé Tande. “Many women imagine finance as being a world populated by Wolf of Wall Street type characters shouting down a phone, chucking a tennis ball around. There’s a real lack of awareness around the breadth of skillsets that can be subsumed under the finance umbrella.” Effective promotion of the industry at school and university level is important to counteract those stereotypes, particularly in terms of the variety of roles available to women, says Tande. “Many of the women who gave presentations on behalf of asset management firms at university were concentrated in certain areas, particularly sales type roles. Getting a more diverse range of women into schools and universities to show that finance is an attractive career choice for women across the spectrum of available roles would be beneficial.”

Unconscious bias

There is also a growing awareness that unconscious bias can hinder even the best intended recruitment drives. In the mid-1950’s Boston Symphony Orchestra had a gender imbalance of 90%/10% in favour of men. Within a few years of introducing blind auditions in which musicians were obscured behind a screen, the male to female ratio had dropped to 65%/35%. The practice of blind auditioning is now standard in orchestras globally. A number of studies have also shown unconscious bias in relation to CVs with foreign sounding names.[iv]

In a bid to counteract this issue, the idea of gender/ethnicity blind recruitment, at least at the pre-interview stages of the hiring process, is slowly gaining traction. One multinational telecoms company is piloting a scheme to test the efficacy of degendered CVs after realizing that the dearth of women in technology roles in its Indian site was not due to a lack of qualified female candidates applying – they were simply not being called for interview.

Unconscious bias can manifest itself in other ways too; advertising campaigns and recruitment drives often tilt towards emphasising aggressive, masculine traits that can be off putting for many women, says Talhaoui. “We need to be aware of how we portray ourselves as an industry and collectively emphasise that it is not only an alpha male math or physics graduate that can make a successful researcher, PM or analyst.”  In this regard, a number of technologies are available that can help firms to nip biases in the bud, such as scanning work descriptions for gendered language or language that has been shown to be off-putting for women.

Getting past the barriers

For those women that do get past the barriers to entry, participation often declines once women start a family. In this regard, the lack of flexible working can act as a barrier to retaining female talent that might otherwise stay on, says Talhaoui. “Technology is a fantastic enabler and yet little progress has been made in allowing people to be flexible in terms of when, and where, they work.” However, flexible working should apply across the board, not just to women or parents. “If we do that in a way that is transparent, it automatically translates into results in terms of diversity.”

Given the self-replicating nature of the stark gender gap at the senior level - we tend to hire and promote people in our own image – could diversity targets tied to remuneration be a way to bridge the divide? Talhaoui certainly thinks so. “Being bold is the subject of our conversation today and bold action is needed”. A top-down and bottom-up approach, in which responsibility is vested at both the individual and organizational level, is necessary, he says. “Bottom-up means each individual needs to be mindful of diversity and respectful of the different profiles needed to run a successful, sustainable business. At the top-down level, our CEO has set clear targets in terms of gender diversity. That should be the norm -  if we want to improve, we need specific deliverables.”

It’s a sentiment with which Frost agrees, adding that there is also onus on those women at senior levels to proactively interview and hire other women and, once they are in the business, to offer mentorship and guidance. This is a key point; the responsibility for making finance a more hospitable place for women does not solely lie with men. Bullying, in the form of passive aggression or outright hostility, intentional obstruction and exclusion should not be tolerated in men, or in women.  To quote the title of a book by Nigerian author, Chimamanda Ngozi Adichie, we should all be feminists.

Actions that organisations can take…

  • Introduce hard diversity action plans and targets, tied to remuneration.
  • Implement clear, structured mentoring programmes e.g., secondments into other business areas to see opportunities. Showcase mid-tier and junior women, as well as those in more senior roles.
  • Broaden the scope of graduate recruitment for risk taking roles beyond math and science graduates.
  • Educate hiring managers about the benefits of diverse hiring, offer training around unconscious biases.
  • Implement gender/race neutral CVs.
  • Consider using technology to counteract unconscious bias in the recruitment process i.e., analysing job descriptions for gendered language or language that has been shown to be off-putting for women or to enable employers to prioritise applications from under-represented groups.
  • Tailor recruitment drives to be equally appealing to both sexes.
  • Educate students at both the school and university level about the variety of roles available in finance.
  • Offer support to teams covering maternity leave and ensure women are not “pushed out” of roles when returning from maternity leave.
  • Institute transparent, flexible working arrangements for all employees. As long as work is being produced to the required standard and timeframe, give employees the freedom to work in a way that best suits them.
  • Do not tolerate or overlook bullying – from men or women.

…and actions individuals can take:

  • Be inclusive for example: mindful, and respectful of, difference.
  • If mentorship is not forthcoming, be bold and ask for it.
  • Senior women: work to ensure more women are hired and, once hired, offer support and encouragement. 
  • Senior men: step-up to mentor women too.

[i] Alpha Female: A special report on how far women have got in fund management and how they are performing
[ii] The CS Gender 3000: Women in Senior Management study identified and mapped more than 28,000 senior managers at over 3,000 companies actively covered by Credit Suisse analysts worldwide.
[iv]  Language Skills and Homophilous Hiring Discrimination: Evidence from Gender-and Racially-Differentiated Applications