In this dynamic and disruptive era, companies that expect to thrive in a highly competitive marketplace must be prepared to innovate. And one of the best ways to drive innovation is to “harness the power of different ideas from diverse groups of people,” according to one recent study.
A report from EY, “Navigating Disruption,” makes the case that companies with a commitment to expanded gender diversity in the workplace and the boardroom will enjoy a market advantage. Based on surveys with business leaders in a variety of industries from 51 countries around the globe, the EY report details the benefits—and notes the challenges that are holding businesses back from achieving this worthy goal.
“Companies that want to survive these challenging times will need to tap into a range of opinions, ideas and experiences,” the EY report explains. “Successful leaders must anticipate and address the sweeping changes in global demographics and advances in technology to create an environment where people and ideas flourish. And improving gender diversity, not only in senior leadership but also across the talent pipeline, can help.”
A companion survey of financial services leaders looks more deeply into how the industry is performing when it comes to advancing women into leadership roles. Banking and financial services are “performing better than other industries when it comes to addressing the gender gaps.”
But the consensus is that there’s room for improvement: the study cites a survey finding that reveals only 17% of banking and insurance industry leaders expect a significant increase in women in leadership roles in the next five years. Clearly, more needs to be done to address the gap.
That starts with clear diagnosis of the problem. The authors identify four “disconnects” in the financial services industry that have held back progress toward achieving greater diversity:
- The reality disconnect: Business leaders assume the issue is nearly solved despite little progress within their own companies.
- The data disconnect: Companies don’t effectively measure how well women are progressing through the workforce and into senior leadership.
- The pipeline disconnect: Organizations aren’t creating pipelines for future female leaders.
- The perception and perspective disconnect: Men and women don’t see the issue the same way.
The path forward lies in systematically addressing those disconnects. That starts with identifying, developing and promoting potential leaders into positions of greater responsibility. EY’s researchers found that roughly one-third of banking firms surveyed have launched formal structured programs to develop women leaders—better than many industries, but still less than what is needed.
EY’s analysis squares with findings by others who are working to expand gender diversity in financial services. For example, a 2016 study by Morgan Stanley’s Sustainability Research and Quantitative Strategy divisions found that more women in the workforce is vital to boosting both individual company performance and overall economic growth. The Morgan Stanley Team notes:
Our analysis of gender diversity does not suggest that female employees should be given priority, but rather than they be given equitable and meritocratic consideration. That said, it is women who are often underrepresented in certain workplace settings, such as management. One gender is not presumed to be preferred over another; gender diversity itself is the preference.
Meanwhile, other financial leaders are working on the supply side to increase the number of young women who are exposed to financial services career opportunities at an earlier age.
The Girls Who Invest initiative, to take just one example, is a private program launched to tackle the gender gap in asset management with an intensive summer program and by providing internship and mentoring opportunities to college-aged women, helping them to build a base of experience and a professional network that can be expanded upon when they enter the workforce. Such programs are vital to creating the pipeline needed to bring greater gender diversity to the financial industry.
And of course, addressing the gender gap is only one priority for addressing the need for greater diversity of all kinds in the financial industry. Edith Cooper, Goldman Sachs’ global head of human capital management, points out that a wide-ranging commitment to diversity is good for both worker morale and the company’s performance.
“You’re sitting in a [meeting] room and you’re [suddenly] conscious of the person who’s different and never says something,” Cooper explains in a recent interview. “Then you start realizing, ‘hey, I’m only hearing from the same two people, I’ve got to fix that.’ This leads to better ideas, better conversations, and greater impact.”
Creating a more inclusive and supportive workplace culture isn’t easy—it requires foresight, an openness to new ideas, and sustained commitment over time, from leaders at all levels of the company. But the effort can be expected to pay big dividends for workers, companies and for the larger economy as a whole.