Practical analysis for investment professionals
31 March 2015

The High Cost of the Gender Imbalance in Finance (Online Forum)

A few weeks ago, women around the globe celebrated International Women’s Day, which this year had the can-do theme of “Make It Happen.” And to the credit of many women and men, there have been some big improvements for women in areas such as education, maternal mortality, water access, and leadership.

A recent Forbes article, “Five Reasons for Optimism This International Women’s Day,” listed some examples of “notable progress women have made and how women are changing the face of power and wielding influence to positively impact all aspects of our globally connected world.”

The fourth reason — and the one most relevant for this audience — was “Driving the Bottom Line.”

Research continues to show strong links between more diverse boards — no matter how diversity is defined — and a company’s financial performance.

Case in point: A 2014 study by Credit Suisse found that “companies displaying greater board gender diversity display excess stock market returns adjusted for sector bias. Companies with more than one woman on the board have returned a compound 3.7% a year over those that have none since 2005.”

The report also said that greater diversity in boards and management is “empirically associated with higher returns on equity, higher price/book valuations, and superior stock price performance.”

But is there evidence that the actual number of women board members is increasing?

Yes. The report said board diversity had increased in almost every country and sector, rising from 9.6% in 2010 to 12.7% at the end of 2013.

And last week, the so-called Davies Review — an annual progress report on women on boards — noted that women now account for 23.5% of board positions in the FTSE 100 — up from 12.5% in 2011, 17.3% in 2013, and 20.7 % last year.

When more women lead, performance improves, say Adam Grant and Sheryl Sandberg. “Start-ups led by women are more likely to succeed; innovative firms with more women in top management are more profitable; and companies with more gender diversity have more revenue, customers, market share and profits,” they write in “When Talking about Bias Backfires.” “A comprehensive analysis of 95 studies on gender differences showed that when it comes to leadership skills, although men are more confident, women are more competent,”

And at least one prominent chief executive, Jack Ma, credits having a lot of women on his team as “one of the secret sauces for Alibaba’s success.” (The company’s recent woes notwithstanding.)

But before we get too carried away, the head of UN Women, Phumzile Mlambo-Ngcuka, recently lamented “that a girl born today will be an 81-year-old grandmother before she has the same chance as a man to be CEO of a company — and she will have to wait until she’s 50-years-old to have an equal chance to lead a country.”


There is still plenty of work to do; and one place to start is by helping to broker a broader discussion about closing the gender gap at senior levels and engaging women and men across the financial services industry to help “make it happen.”

Here at CFA Institute, we have been thinking about a number of related questions:

  • Is the finance industry attracting and retaining women? What sectors are women going into instead of finance? Has this changed over time?
  • Much has been written about the culture in Silicon Valley and how the gender gap is widening. Does the financial services industry have a similar problem? If so, how can the industry change its culture to attract more women?
  • We may be seeing more diverse boardrooms emerging, but how diverse are top management teams? (The Credit Suisse study says the proportion of women in senior management is similar to that on the boards of companies, but their roles “are arguably skewed towards areas of less influence or offer less opportunity to move into the most senior positions in the company.”)
  • Why aren’t there more women in senior positions of power, including CEO, at financial firms? If there were, would some of the meltdowns not have happened? (John Kay, writing in The Financial Times, says: “We might have better banks if there was rather less male risk taking and more female regulating and organizing. Time, perhaps, for more women to be employed in executive roles in financial institutions.”)
  • Despite the claim that risk taking is a function of biology, recent research on women in the workplace found that women do embrace risk and their decision-making around risk follows patterns identical to men. Sylvia Maxfield, dean of the business school at Providence College and one of the authors of this research, writes: “The idea that women are more risk-averse than men reinforces stereotypes that stymie career progression for men and women, and limit organisational potential.” Do you agree?
  • What does the research tell us about the decision-making and performance of firms with more diversity? What does diversity mean for corporate boards and what has been the performance of companies with more diversity on their boards and in leadership positions?
  • What is the business case for gender diversity? When it comes to good corporate governance, does gender diversity really matter?
  • Are we making progress on getting women into the C-suite and on corporate boards? What will it take to get more women on boards in North America? Is 30% women on boards the right goal?
  • What are the obstacles to getting more women onto boards and into leadership positions? The Credit Suisse report identifies three: cultural biases, workplace-related biases, and structural policy issues. Do you agree? Are there others?
  • How do we close the gender gap in finance (and other industries)?
  • Would it be good for the end investor if women represented more of the industry?
  • Are there areas where women may have an advantage in working with clients, for example, in private wealth or women investors working with female clients?
  • Women: Were there times in your career where being a woman was actually helpful? How so?
  • More big businesses are enlisting men in their push to attain gender equality and diversity at the top, according to a recent Wall Street Journal article. How do we engage men in the discussion more broadly?
  • What are the most important pieces of advice you would give to a woman just entering a big Wall Street firm or any other big company?

To discuss these questions and more, I am hosting a Future of Finance online forum in this post over the course of the entire business day, Thursday, 9 April 2015.

The Future of Finance is a global effort by CFA Institute to help shape a trustworthy, forward-thinking financial industry that better serves society. Partnering with us to explore these issues and answer some questions are the following thoughtful professionals, whose official professional biographies appear below: Leah Bennett, CFA, co-CIO of South Texas Money Management; Sarah Burley Reid, a senior member of Spencer Stuart’s financial services practice, where she specializes in executive searches within investment management and wealth management; Meredith Jones, an alternative investment expert and author of Women of the Street; Elsie Maio, a C-suite catalyst for step change in organizations and individuals; Jocelyn Wright, The American College State Farm Chair for Women and Financial Services and assistant professor of women’s studies; and Nelli Oster, PhD, an investment strategist in BlackRock’s multi-asset strategies group.

(If you are wondering — with good reason — why it’s an all-women panel, it is not for lack of trying. Not a single man we approached was able to participate.)

If you have a question for me or for the panel, please post it in the comments section below. This article will serve as your anchor for the forum as the discussion will unfold below the text of the post. See you 9 April 2015!

Leah Bennett, CFA, is co-CIO at South Texas Money Management, where she shares responsibility for overseeing the investment strategies of the firm. Previously, she served with King Investment Advisors, Inc., where she was a managing director and CIO as well as a member of the firm’s investment advisory group. Prior to that, Bennett was a research analyst for Capital Research and Management. She currently serves as the CFA Institute Presidents Council Representative (PCR) for the South Central United States and Latin America and South American region, and is a former president and director of CFA Society Houston. Bennett is a co-founder of the CFA Institute Texas Investment Research Challenge and formerly served as chairman of the organization’s education committee. She received her BS in economics from Texas A&M University.

Meredith Jones is an internationally recognized researcher, writer, speaker, and expert in the alternative investment industry and the author of the forthcoming Women of the Street. Over the past 16 years, she has presented her original research and insights to industry participants around the world. She is a frequent speaker on the international conference circuit and has had her findings published in books and major media outlets, including The Economist, The New York Times, CNBC, The Wall Street Journal, The Financial Times, The Journal of Investing, and others.

She began her alternative investment career at Van Hedge Fund Advisors International, where she was director of research. She continued her research at PerTrac Financial Solutions and Barclays Capital, Inc., producing groundbreaking reports on emerging managers and diversity investing, before becoming director of the Rothstein Kass Institute, an alternative investment think tank. As founder of MJ Alternative Investment Research, Meredith continues to provide timely research, education, and actionable insights to the alternative investment community.

Jocelyn D. Wright is The American College State Farm Chair for Women and Financial Services and assistant professor of women’s studies. In these dual roles, she functions as the Center’s director and chief ambassador in leveraging research and education to create broad awareness of the challenges and opportunities that pertain to women and financial services.

Concurrent to her roles at The American College, Jocelyn is also the founder and managing partner of The Ascension Group (“Ascension”). As an adviser she partners with her clients to design a personalized holistic strategy to help them reach their financial goals. With over 20 years of financial services experience, Jocelyn has been working with individuals since 2002. She also holds the certified financial planner designation.

Sarah Burley Reid is a senior member of Spencer Stuart’s financial services practice and specializes in executive searches within investment management and wealth management. She also co-leads the firm’s global private wealth management practice. Sarah focuses on the recruiting of senior executives and investment professionals as well as sales, marketing, and client service leaders.

In her search practice, Sarah works with a variety of client organizations, including institutional asset managers, wealth management firms, endowments and foundations, family offices, hedge funds, private equity firms, and funds of funds. Based in the firm’s New York office, she has partnered with clients across the United States as well as internationally. She has also been a recipient of the firm’s annual award for the highest quality client service.

With more than 15 years of management consulting and executive recruiting experience, Sarah brings deep industry knowledge. Prior to joining Spencer Stuart, she was a management consultant with Booz Allen & Hamilton, where she advised senior management of Fortune 500 companies on a variety of strategic and operational issues. Her clients included leading players in the financial services, media, telecommunications, and manufacturing industries.

Earlier in her career, Sarah served as research manager for The VIP Forum, a program of the Corporate Executive Board, which provides strategic research services to investment management firms, mutual fund complexes, private banks, and trust companies.

Elsie Maio is a C-suite catalyst for step change in organizations and individuals. Grounded in the bottom-line discipline of Wall Street and McKinsey & Company, she has supported notable transformations in a range of sectors, including financial services, as well as in a nation state. A thought leader for decades on the economic value of social values, her commentaries have appeared in The Wall Street Journal, on NPR, and in The Journal of Business Ethics, and she speaks at international venues on the obsolescence of the sustainability movement. A serial innovator, Elsie lately put her proprietary SoulBranding process into a cloud-based app whose engine won Gartner’s Cool Vendor 2014 designation, and has launched a private client practice to help leaders gain confidence in their intuitive wisdom as they make key choices in their lives and their investments.

Nelli Oster, PhD, director, is an investment strategist in BlackRock’s multi-asset strategies group, where her responsibilities include developing tactical country, sector, and asset allocation models for implementation with iShares exchange-traded funds (ETFs), in addition to relating the investment strategy team’s research and investment views to key institutional and financial adviser clients.

Dr. Oster’s service with the firm dates back to 2008, including her time with Barclays Global Investors (BGI), which merged with BlackRock in 2009. At BGI, Dr. Oster did research and portfolio management in the firm’s quantitative stock selection business across the global portfolios. Prior to joining BGI, Dr. Oster was an equity research analyst at Goldman Sachs after beginning her career in the mergers and acquisitions group of Salomon Smith Barney.

Dr. Oster holds a BS (Hons) in management sciences from the London School of Economics and a PhD in finance from the Stanford Graduate School of Business, where her behavioral finance dissertation focused on expectations formation and learning in the financial markets.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

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About the Author(s)
Lauren Foster

Lauren Foster was a content director on the professional learning team at CFA Institute and host of the Take 15 Podcast. She is the former managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Lauren spent nearly a decade on staff at the Financial Times as a reporter and editor based in the New York bureau, followed by freelance writing for Barron’s and the FT. Lauren holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.

5 thoughts on “The High Cost of the Gender Imbalance in Finance (Online Forum)”

  1. Cheryl Carson says:

    Thank you for the opportunity of the online forum on April 9, 2015. How can I connect to listen to this wonderful caliber of speakers for this forum?

    1. Paul McCaffrey says:

      Hi Cheryl,

      The online forum will be conducted in text, with the participants typing their insights, questions, and responses throughout the day on 9 April. You’ll be able to follow along and participate directly through the ProBoards forum embedded in the middle of the post.

  2. Melissa Paquette says:

    Thank you for the information in the article. Discussing this openly is a step towards change.

  3. Fung Chee Fui says:

    Greetings to all panelists. Thanks to CFA Institute for organizing this forum.

    First of all, I am a man but I am all in for the gender equality in the corporate world. Warren Buffett once said “we’ve seen what can be accomplished when we use 50% of our human capacity. If you visualize what 100% can do, you’ll join me as an unbridled optimist about America’s future.” but I am still doubtful that we can achieve absolute success in closing the gender gap in the corporate world.

    The reason is simple, women have one natural disadvantage — maternity.

    Don’t get me wrong, I have full respect to all the mothers in this world for giving birth to everyone of us. The pain they have suffered can never be felt by the men.

    Despite that the corporate-world women are less inclined to have baby(ies) nowadays, their chances of getting pregnant (>0%) will still undermine their competitiveness, whether they like it or not. Therefore, statistically speaking, men will still outnumber women in the corporate-ladder-climbing race, hence lesser C-suite women in the corporate world. I don’t think anything can change that. Do you agree?

    Intellectually speaking, women are, to some extent, better than men and they definitely deserved a place in the leadership rank of corporate world.

    Secondly, the blog post mentioned that “The idea that women are more risk-averse than men reinforces stereotypes that stymie career progression for men and women, and limit organisational potential.”, which I think is untrue. I think Dr. Oster would agree with me as she has already written a blog post on this matter (

    Thirdly, I cover the Vietnam stock market for my employer (we are fund-management company specializing in ASEAN equity) and I have always been in love with companies that have a women CEO, e.g. Vingroup, Vinamilk and Refrigeration Electrical Engineering Corporation. They are all very well run companies by international standards.

    Lastly, I sincerely wish to see more Sheryl Sandbergs and Marissa Mayers in the corporate world, but I think women will still be outnumbered by men at the highest rank of capitalism.

    Look forward to the forum. Cheers.

  4. Andrea Dalton says:

    As a woman with 20 years experience in asset management, after earning an MBA & CFA, I appreciate many of the dynamics & study conclusions referenced so far by the panelists. I wonder if any of the panelists have thoughts on what actions could be taken to move beyond discussion. TIA for your thoughts.

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