The situation for women leadership in finance needs improvement. While they represent around 52% of entry-level employees in financial services, they occupy only 18% of C-suite roles. But this can improve.
As we’ll explore in this article, statistics show it’s possible for women to enter the world of finance, but challenges remain for meaningful career progression. So rather than solely focusing on why female leadership in finance so uncommon, let’s see ways we can move forward and change the story.
Why are women leadership roles still uncommon in finance?
Company diversity is a hot topic worldwide. Yet women remain underrepresented in private markets. Recent research shows they account for around 15% of partners in hedge funds and private equity firms. Why?
The problem is cultural. More men study finance than women – but there’s an even bigger discrepancy in faculty. The American Finance Association estimates around 20% female representation among finance faculty globally. That bleeds into the culture of the finance industry. A recent article by Women + Money investigated how female leadership therefore suffers in a male environment due to ingrained cultural differences.
“Women who are intimidated may believe that they are “not good with money” due to gendered socialisation… [Women] then find it difficult or intimidating to engage with financial institutions.”
So it’s unsurprising that women report more burnout than men. Women in financial services still report higher levels of burnout and slower promotion rates compared with men. So, what’s the way forward?
How do women in the finance industry make teams stronger?
We need to publicize the statistical benefit of having female leaders. An article from HEC Paris showed private equity teams with at least one woman will outperform all-male teams. So if the studies show women’s leadership in finance boosts results, we need to make that known. This in turn changes narratives that influence female promotion to executive positions.
Startups founded or co-founded by women generated 78 cents in revenue for every dollar invested, compared with 31 cents for male-founded startups.
What’s more, McKinsey & Company report that companies in the top quartile for gender diversity are about 27% more likely to outperform financially. The conclusion? Gender diversity in finance isn’t just a moral benefit – it’s an economic one, too. Meaning finance and industry could seriously benefit from change.
And the statistics prove that representation will continue to improve. Women are expected to control $60 trillion in global wealth by 2030, reshaping the financial industry. So it’s best to be ahead of the trend.
How are we nurturing women’s leadership at IE University?
At IE University, we’re dedicated to making lasting change in finance. That’s why we’ve established the IE Women’s unit to drive societal transformation. We’ve outlined three ways to uplift women in our community: connecting with yourself, connecting with your community and connecting with the world. We provide the tools women need to understand their strengths and weaknesses, which emboldens self-awareness and industry expertise across the world. You can experience various events, internships and conferences to understand how we’re making this change.
We remember Kerri Gohman, president of Xero Americas, describing how she allowed herself to become the boldest version of herself. She began taking risks, becoming more powerful and unleashing her real capacity. This was the difference that set her up to become a woman in leadership. And that’s exactly the philosophy we believe in: creating the Next Best You.
Women who are entering the sector can prepare for what’s in store by seeking out professionals (especially women) who are already in the industry. This makes being a woman in business significantly easier.
It’s a long-term plan, but it’s necessary to make women leadership more prevalent. If you’re female-identifying and looking for a Master in Finance that will set you up C-suite positions, we suggest you fill an application for the IE Business School. It might just be the most impactful thing you do today.
Learn more about women in venture capital and networking tips for women in finance
Curious to hear about women in venture capital and networking tips for women in finance? Take a moment to enjoy our Venture Ahead podcast, where we chat with leaders across various sectors. In this episode we caught up with Videesha Boeckle to understand how to invest capital for small and medium ventures. And don’t forget to hit subscribe on Spotify to hear more!
