Key Concept

A qualitative study, based on interviews and roundtable discussions with 79 women in the financial sector, identifies 10 action steps companies can take to encourage and enable women to overcome gender barriers to promotions and leadership positions.

Idea Summary

Despite the overwhelming consensus in favour of improving career and leadership opportunities for women in business, diversity statistics continue to demonstrate that best intentions have not led to results. 

The London School of Economics’ Inclusion Initiative, in partnership with the advocacy organization Women in Banking and Finance (WIBF), conducted a qualitative study to identify the actions that companies can take to improve the career development opportunities of women in the financials services sector.

The 2021 study, led by Inclusion Initiative Founding Director Grace Lordan followed up a wide-ranging 2020 quantitative survey of 1700 men and women working in the financial sector. One key finding of the survey: while men and women in the sector were equal in their ambitions and search for career advancement opportunities, nearly 80% of women found barriers blocking their career paths, compared to 59% for men. 

The survey found some differences in the women’s experiences based on the share of men in the work environment. In functions with a low share of men, for example, mistakes by women were more likely to be punished than mistakes by men, while women working in functions with a high share of men were given the opportunity to learn from their mistakes. To ensure a complete picture of the challenges faced by women in the sector, therefore, the 2021 qualitative study was based on interviews with 44 women, 23 working in front-office income-generating functions (FO) of the financial sector in which the share of men is higher and 21 working in communications and compliance (CC) functions in which women dominate. Roundtable discussions with 17 women in front-office functions and 18 women in communications and compliance functions complemented these interviews. 

Ten dominant high-level themes emerged from the interviews:

1. The silencing presence of groupthink. Dominant individuals overpowered meetings, dissent was silenced, and the contribution of women was often squelched or ignored. 
2. Access to opportunities as a major differentiator. Women succeeded when given access to interesting work and opportunities for promotion. Many women however found barriers to such opportunities.
3. Marginalization and career derailment because of work-life conflict. Maternity leave or childcare pressures undermined career opportunities for women.
4. Empowerment through differences. Some of the women interviewed were able to carve out innovative niches at work that gave them opportunities to succeed.
5. Flexibility enhancing efficiency and effectiveness. Many of the women in the study agreed that flexibility in work arrangements and greater autonomy enhanced their chances for success.
6. Misguided incentives. The highest income generators for the firm earned the highest levels of compensation. Study participants argued that leadership and the collaborative work should be more highly prized. 
7. The difficulty of developing external networks. Women had less access to gatekeepers who held power and were willing to help them open doors.
8. Less advocates for women. In the quantitative survey, men reported having at least three senior colleagues to go to for advice. The majority of the women interviewed in the qualitative study noted that such champions for their cause were lacking.
9. Different norms for women. High performance by women was discounted, while mistakes were more harshly treated. In contrast, men who had “mediocre” results were tolerated.
10. The need for empathetic managers. Leaders who were truly empathetic as well as being competent made a major difference in keeping office politics at bay and offering opportunities for women. 

Business Application

The ten themes that emerged from the qualitative study were adapted into a framework of 10 action items entitled the GOOD FINANCE framework—the letters in the name representing the initials of the action items as follows:

• Groupthink. Eliminate or reduce groupthink by auditing meetings for groupthink, identifying its root causes, and designing meeting protocols to eliminate these causes. 
• Opportunities. Ask managers to audit their allocation of opportunities such as stretch assignment, pay increases and promotions. Many will discover subconscious biases in these decisions, and realize that not all deserving performers are being rewarded.
• On-Ramps Off-Ramps. Design a process for women to be able to take maternity leave or accept heavier childcare responsibilities and to be reintegrated with a “soft landing” when they fully return to work. 
• Difference. Nuture innovation. Explore the creation of career paths that follow more innovative routes than traditional career paths. 
• Flexibility. Encourage flexibility and autonomy in work practices by experimenting and assessing different work arrangements. 
• Incentives. Redesign incentives to reward inclusive managers. The performance of the team should be factored into individual management compensation.
• Networking. Create a networking platform that brings together gatekeepers tasked with helping talented, ambitious women access opportunities.
• Advocates. Create an advocacy programme for high-achieving women, with advocates compensated for their success.
• Norms. Eliminate gender differences in the company’s norms. Is the company ignoring high performance from women? Are men allowed to make mistakes for which women are punished? 
• Competence-Empathy. Provide coaching and leadership training to highly competent individuals, emphasizing the effectiveness of leaders who are empathetic in addition to competent.