4. How to improve gender diversity outcomes

4.1 Harvard Business Review – Why Diversity Programs Fail1

Frank Dobbin, Professor of Sociology at Harvard University and Alexandra Kalev, an Associate Professor of Sociology at Tel Aviv University, analysed three decades of data from more than 800 US firms and extensively interviewed hundreds of executives and management and considered the issue of why diversity programs fail.

Their analysis identifies why many diversity programs fail with many popular programs such as mandatory diversity training failing (they haven’t lead to more diverse organisations). The report importantly focuses at length on the initiatives which have lead to results and improved diversity outcomes. Targeted college recruitment, mentoring programs, self-managed teams and social accountability are four initiatives which improve diversity outcomes in business. These initiatives are explored in further detail below:

  • Targeted college recruitment – voluntary college recruitment processes whereby managers willingly participate when invited to help find a greater variety of promising staff, helps to gain support for diversity (positively influence those managers who were ‘wishy washy about diversity’ and who become converts as they take the responsibility of finding talented individuals seriously) and helps to increase diversity outcomes. The report refers to research which found an average 10% increase in women in management 5 years after companies implement a college recruitment program targeting female employees.
  • Mentoring – is a great way to engage managers and reduce bias. Women often need formal mentoring programs whilst men tend to find mentors on their own. Mentoring programs also reduce bias in the mentor who comes to believe in the merit of their protégé as they give the protege key assignments and develop further. Mentoring make management teams more diverse.
  • Self managed teams – bring together people from different roles and functions to work together on projects as equals. This increases contact between people and can break down stereotypes and has been found to increase women in management roles.
  • Social accountability – refers to the desire to appear fair and involves using social accountability (transparency) to promote change. For example, CEO’s bring together teams in a diversity taskforce which is responsible for looking at the diversity numbers for the business unit, department and company on a regular basis (for example quarterly). Task force participants come up with solutions which they take to their departments. Companies which implement a diversity task force see an increase in women in management of 9-30% on average, over the next 5 years.


4.2 CFA Institute (2016) Gender Diversity in Investment Management – New Research for Practitioners on How to Close the Gender Gap

To uncover some of the underlying causes of gender disparity in investment management, the CFA Institute developed a survey in conjunction with a number of finance scholars. Over 5,000 CFA members responded to the survey (more than 4,000 men and more than 1,000 women) and the survey data was then analysed and compared with several additional datasets to investigate the question of why women are underrepresented in investment management.

The findings were clear - women are underrepresented in the investment profession representing only 1 in 10 people in the key leadership positions of CEO, CIO and CFO. Furthermore, female CFA members represent:

  • 10.2% of Chief Investment Officers
  • 13.9% of Traders
  • 14.9% of Portfolio Managers.2

The report has a number of useful suggestions as to how the investment industry can attract and retain female professionals including: heightened promotion of investing as a career at university level, making potential entrants to investment management aware of the flexibility available in the industry and education of investment firms on the importance of work structure and flexibility in attracting a gender diverse workforce. The report also highlighted that more attention and research is needed to explore how diversity can contribute positively to certain types of investment decisions. With the complex problems faced in investment situations, groups can get stuck if they have limited diversity where everyone thinks in the same way. The report explains that such difficulties are far less likely if the diversity is deep and derived from wider sources of knowledge, perspectives, experience, values and ways of thinking.


4.3 AMP Capital (2019) Gender Diversity Report

The Insights Papers considers the issue of gender diversity, what is contributing to it and puts forward suggestions to improve gender diversity. The paper identifies a number of measures which can be taken to improve gender diversity. Some of the suggestions are explored from an investor’s perspective (i.e. what can an investor do to support gender diversity in companies (such as making a diversity a KPI of a company and championing the benefits of diversity) whilst other suggestions can be readily incorporated within the readers own organisation (such as developing and promoting all employees equally including equal access to flexible work and equal pay, as well as developing and promoting all employees equally).


4.4 Mercer (2016) When Women Thrive – Financial Services Perspective 

Mercer conducted a global study that focused on women in the workplace from 583 companies across 42 countries. The When Women Thrive – Financial Services Perspective, October 2016 report focuses on specific data and insights from the financial services industry, making comparison to all other industries captured in the global study. This report is based on survey responses from 67 finance/banking organisations.

The report makes a number of key recommendations to support progress on gender diversity. These include;

  • Actively managing flexible work programs which includes having the correct training in place for managers to better support women working flexibly or taking long leaves such as Maternity Leave;
  • Building engagement for diversity and inclusion within the organisation, extending beyond the leaders of the organisation to engaging middle managers and men to help shift the dial;
  • The talent of the entire pipeline, namely the skills and experience necessary for advancement, needs to understood and developed. For example, job design of P&L roles need to be reviewed to identify the criteria for progress into such roles and to support flexibility to develop the pipeline for such roles.. Organisations with robust pay equity process and a dedicated remuneration team have greater female representation. Reviewing performance ratings by gender can reduce bias and highlight gaps. A proactive gender lens should be applied to all pay, promotion and performance management processes.


4.5 Mercer (2017) Diversity in Investment Management Benchmarking Study - report for the diversity project

The Diversity Project engaged Mercer to conduct employee-level research into the level of diversity in the investment and savings industry in the UK. Over 3,700 persons from 24 UK firms participated, with Current and Former Investment managers (650 investment managers participated) as well as Adjacent Talent participating. The study also focused on what it would take to improve diversity, understanding the motivation of employees in the industry and highlighting barriers to inclusion.

The report makes a number of suggestions to improve diversity outcomes which include 3

  • Promoting flexible work practices was viewed as the best way to foster a diverse and inclusive workplace by both men and women;
  • Further exploring and importing the best of breed for flexible work practices for trading and fund management roles;
  • Promoting examples of success stories of individuals who have entered the industry from non-traditional channels – including graduates and experienced hires;
  • Providing support to people returning from a leave of absence;
  • Showcasing progress and promotion of part time workers, especially senior males;
  • Opening networking and development opportunities (such as mentoring, sponsorship and development programs) to people from different backgrounds.


4.6 Oliver Wyman Women in Financial Services 2016

This report by Oliver Wyman outlines the findings of their extensive study of 381 financial services institutions in 32 countries looking at gender balance. The report suggests that in order to move financial services firms towards gender balance a mix of bolder structural solutions and more profound underlying cultural change will be required.

To improve female representation the report suggests both structural solutions and cultural change are required.

Bolder structural solutions:

  • Set an executive committee talent pipeline strategy
  • Provide more flexible working options at all levels and find ways to remove the stigma associated with using them
  • Encourage men and women to take parental leave and develop better returnship programs
  • Address the promotion and pay gap, understanding that this is likely to be driven by invisible cultural factors

More profound underlying cultural change:

  • Build an inclusive culture that recognizes and promotes the value of diversity among all dimensions, is free from unconscious bias and therefore supports gender balance
  • This means putting practice ahead of theory, supporting men to support women and seeking enlightened leadership.


4.7 Workplace Gender Equality Agency - How to set Gender Diversity Targets

After some introductory information relating to the current state and benefits of workplace gender diversity, this paper addresses some of the pitfalls and advantages of setting and implementing targets.

It sets defining language for targets, and lays out suggested steps, checklists, and processes for designing and setting targets for gender diversity. It gives two case studies, one each for a large and small organisation.

It encourages and lays out for consideration the organisational and cultural issues that should be addressed in order to make successful implementation more likely. It offers specific approaches to these issues. It illustrates data and maths based examples of feasible and unfeasible targets.


4.8 Deloitte (2018) The diversity & inclusion Revolution: 8 Powerful truths

This paper draws on the findings of seven major research studies and puts forward eight “truths” to improve diversity and inclusion outcomes. The eight truths are:

  1. Diversity of thinking is the new frontier - Diversity and Inclusion drive better business outcomes (e.g. enhanced innovation and reduced risk)
  2. Diversity without inclusion is not enough - diversity needs to be coupled with inclusion to enhance outcomes further. In this context it is important to have clarity as to what inclusion means. Deloitte’s inclusion model includes four aspects 1. Fairness and respect, 2. Valued and belonging, 3. Safe and Open, 4. Empowered and growing.
  3. Inclusive leaders cast a long shadow - The best leaders practice inclusion in an intentional and effortful way because they ultimately believe in and are committed to diversity of thought bringing about better business outcomes.
  4. Middle managers matter – middle manager’s involvement is critical to the success of an organisation’s diversity and inclusion strategy.
  5. Rewire the system to rewire behaviours - organisations need to adjust the system (such as using data to identity leakage in the talent lifecycle) in order to change behaviour.
  6. Tangible goals make ambitions real – tangible and measurable objectives are important to making change
  7. Match the inside and the outside – communicating with customers to embrace customer diversity is also important to business success (not just employee diversity).
  8. Perform a culture reset, not a tick-the-box program – while many organisations aspire to be inclusive, they underestimate the depth of change that is needed, having a compliance driven approach to diversity and inclusion. A culture reset is often needed in the organisation to make change.

1 Frank Dobbin and Alexandra Kalev (2016) Why Diversity Programs Fail, Harvard Business Review.
2 Ibid, page 8.
3 Mercer (2017) Diversity in Investment Management Benchmarking Study - report for the diversity project, p9 and 24.
4 Bourke & Dillon (2018) “The Diversity and inclusion revolution: Eight powerful truths – Deloitte Review, issue 22”, Deloitte Insights


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