A new study has exposed enduring male bias in the financial services sector, particularly in the City. A high impact report sets out a framework to address the ongoing issue of inequality in this industry for women in finance.
A study released in June 2021 by the London School of Economics and Women in Banking and Finance (WIBF) has found that women who don’t always perform consistently well find that their careers falter, while mediocre men make progress in high numbers.
One of the most concerning findings in the research was that women, and particularly Black women, find it difficult to gain recognition for good performance at work.
The study found that women can be held back due to outdated social norms and retention bias – and that some managers ‘fake empathy’ when managing women.
Researchers concluded that states that women in banking and finance are in a sink-or-swim position and are being held to higher standards.
The women involved in the research found that they are either ridiculed or celebrated and any mistakes are treated with much greater severity than those made by men.
The study suggested that underperforming men continue to progress at work by ‘playing politics’ and, once in a management role, show ongoing bias in the employees they put forward for career progression opportunities.
Researchers concluded that talented women in business and finance are less likely to gain promotion opportunities under these leaders and regularly see their progression blocked.
These findings will be of little surprise to women in finance, as the sector is renowned for an enduring disparity in the earnings of men and women. The gender pay gap is one of the worst of the UK’s business sectors, and women in finance leadership are paid two thirds less than their male colleagues.
In the UK as a whole, women now occupy more than a third of board-level roles – but in financial services this figure is just 14%.
The most important step in tackling the ongoing challenges for women in business and finance is to expose poor management practices.
As part of this, Women in Banking and Finance and LSE created the Good Finance framework. This provides banking organisations with a roadmap of actions that should be adopted to create a more inclusive, fairer working culture.
Tasks in the framework include auditing the allocation of promotions, pay increases and stretch assignments. Uncovering patterns of bias is the first step in eliminating them.
Exploring flexible working opportunities is another area of focus, as is the introduction of an advocate programme. Both these initiatives will help women feel more supported and accommodated in the workplace.
Dr Grace Lordan, Director of The Inclusion Initiative at the London School of Economics and Political Science, was a driving force behind the Good Finance report.
She said: “Having the opportunities of talented women guarded by managers that favour people ‘like them’ is detrimental in terms of innovation. Gender convergence will only come when financial services have managers across all levels of seniority who embrace an inclusive leadership style. We are stuck in a compliance phase where we need to continue monitoring and auditing the sector to ensure progress actually happens.”