The Need for Women Leaders on Wall Street
by Liz O’Donnell (Boston)
What if there were more women leaders on Wall Street? This is the question raised by a new report from The National Council for Research on Women, a network of 120 leading U.S. research, policy and advocacy centers. The report, entitled “Women in Fund Management: Achieving Critical Mass and Why It Matters,” takes a close look at the lack of women in leadership roles in fund management.
Today, only 16 percent of executive and board positions in the financial services are held by women and just 10 percent of fund managers are women. In fact, in 2008, women managed only three percent of the approximately $1.9 trillion invested in hedge funds. These low numbers don’t align with the number of women in the workplace, the number of women who own businesses, or the amount of wealth represented by women. Almost half of all workers in the U.S., and one third of all business owners, are women. And women comprise 43 percent of all Americans with gross assets of $1.5 million or more.
The report makes the case that now is the perfect time to bring more women into the management mix on Wall Street, not just to better represent the women working on Wall Street and/or with access to capital, but in order to better meet the shifting dynamics of the U.S. economy. As a result of the economic crisis, the market has shifted from highly leveraged and high risk to demanding reform, greater oversight, and longer-term investing strategies. The report cites several well-documented studies that show women invest differently than men — they hold investments longer, take less risk, and use a more comprehensive decision.
Kimberly Sterling, president and a shareholder of Resource Consulting Group, an Orlando, FL-based investment advisory firm, says what is needed now is an attitude of “harvesting” vs. “beating” the market. “Therefore, a woman’s natural and cultural traits work well,” she says. Women, says Sterling, tend to be “less reactive, focused on a big picture plan, and good at sticking with the long term view.”
But a few women leaders are not enough. A critical mass of at least 30 percent female leadership is required in order for women to affect positive change, according to the authors of the report. A more balanced mix of women and men will provide a broader and complementary skill set needed to restore trust and confidence in the market.
Jacki Zehner, a founding partner of private weath management firm Circle Financial Group, former partner at Goldman Sachs, and Board Member Emerita for the National Council for Research on Women, says that what is most exciting to her about the report is this critical mass argument. “It is the most actionable step (from the report),” she says. Until that critical mass is reached, argues Zehner, we won’t know the impact of women’s leadership. “We know what a woman leader looks like,” explains Zehner, “but we don’t know what women’s leadership looks like.”
“Adopting a critical mass principle” is one of ten solutions proposed in the report. It involves setting quantifiable criteria, benchmarks and guidelines for ensuring adequate representation of women in leadership roles. “Make it an absolute,” says Zehner, “The number of companies without women on their boards is completely unacceptable.”
Kelly Chesney, principal and co-founder of Pluscios Management LLC, a women-owned investment management firm, was previously a Managing Director at JPMorgan Capital Management, where she invested in portfolios of hedge funds and served on the Investment and Management Committees. Chesney agrees the main takeaway of the report is the critical mass principle.
“Women invest different than men,” she says, “I am not saying it is better or worse. It’s different. You need enough diversification to make a difference.”
A full copy of the report is available from National Council for Research on Women here.
Recent research shows that the current recession could be a result of too many men with too much testosterone on the trading floor. They got overly aggressive taking too many risks, just as a winning athletic team would do and it always leads to downfall. Once taking the fall they have an overabundance of cortisol,the stress hormone, which makes things look worse and now it is hard for them to see anything positive to pull themselves out of it. So they exaggerate the highs and lows. One could argue that women on the trading floor would have prevented the recession and increasing their numbers will do so in the future. Thus its in our best interest to have more women in capital markets. The problem in getting more women into that environment is it values strongly masculine characteristics such as aggression, toughness and individuality, making it difficult for women to penetrate the ranks. In strongly masculine organizations women walk a minefield between being viewed as tough enough to be considered leadership material and yet not being so strong that they aren’t liked. Women need mentors to not only survive, but thrive. We need help from the organizations but we also need to support one another. Women will win by supporting other women. I blog about this at https://stillettochick.typepad.com/blog/2009/06/women-win-by-supporting-other-women.html Thanks for a great article. BA
The business paradigm that has supported Wall Street is built around male attributes such as competition, win at all costs, take no prisoners, the one with the most wins; the war paradigm applied to the development of one of the major financial drivers of our country. It is no wonder that it collapsed(or that it continues to collapse in every decade or two). Without a shift in the paradigm, without a concerted call to look at the values of the financial leaders, without requiring these institutions to operate with honesty and integrity, the male defined paradigm will continue and we can look forward to more corruption, more financial losses inflicted on ordinary peoplethrough the greed of a few…
As women we understand collaboration,we understand the value of sustainability and the need to balance physical, emotional and spiritual demands in the development of the whole; these skills and attributes contribute to families but play the same important role in our businesses and financial institutions.
Business schools teach the “male competitor” paradigm, business books have been oriented to these values as well.
Female voices in business and on Wall Street are drowned out by the noise of the aggressive and competitive men.
Women’s voices in business need to be included, valued, lifted up and need to be heard.
I have recently submitted a proposal for a business book that speaks to the core values of leadership…chapters are on Integrity, Awe, Hope, Possibility, Vision(there are three books and 30 chapters).
I have found it very difficult to get traditional business publishers to take an interest; they want the latest new thing or words from a famous executive(which knocks out women to a large degree). The other interesting thing is that I have submitted a chapter on LOVE…how it has been absent from the business vocabulary and is one of the most powerful forces in the world(not sexual obviously but an over riding concern and care for mankind which duhhhhh; has been completely omitted from the workings of Wall Street). Anyway, no one is comfortable with bringing that concept into business publishing.What does that say about the support structures and teachings of our business society?
I persevere with my efforts to introduce a female voice into the business world and am committed to shifting the way we hold our leaders accountable for the overall good and sustainability of their organizations and people.
I love your article and the response; I think we need to keep the conversation going and expand the voices and make a difference to change the male paradigms that have destroyed so much.
Count me in on this conversation!