A balanced workforce is good for firms, customers and investors. Recent research has shown that diverse businesses create better outcomes including lower market volatility, reduced fraud, better performance, and higher rates of productivity and innovation. Yet women still face a glass ceiling in finance that even ‘doubles’ in specific sectors, like banking, where a strong masculine culture constrains them from advancing their career even if they have made it to middle management positions (i.e. thedouble glass ceiling); and sometimes if they make it to the top, they are set to fail (theglass cliff). Compared to other industries, financial services struggle to close the gender gap and remain unattractive to women who are typically under-represented in executive committees and/or subject to significant gender differences in earnings. Recent years have shown an increase in studies that explore the role of women in boardrooms and several initiatives have been launched to make gender diversity a corporate goal. However, overall progress towards achieving level playing field for women in pay and promotion opportunities has been slow, and more research is needed on the benefits from gender equality and inclusion at all levels in the pyramid of seniority in the finance sector.
Can women drive change in the finance-based industry? One advantage from increasing female representation in leadership positions in finance is related to their potential role in implementing a more ethical culture. The global financial crisis and the many cases of misconduct and scandals over recent years, have demonstrated the need for culture reforms initiatives that are not just short-term fixes. Finance is essentially about managing risk. The academic literature has largely confirmed the anecdotal evidence that there are significant gender differences in qualities like empathy, inclusiveness, compassion, as well as risk appetite between males and females and that these latter are less risk-takers than their counterparts. But are female leaders significantly more risk adverse than men? Would have “Lehman Sisters” avoided default back in 2008? The answer is not that simple. Some recent studies in social science provide evidence of a direct relationship between risk behaviour and gender; while others argue that the few women that follow a career leading to a directorship cannot be considered the ‘typical’ ones. In addition, it is possible that benefits from greater gender diversity at the top could result only when the proportion of women in the boardroom achieves the sort of ‘critical mass’ that will allow them to ‘form coalitions, support one another and affect the culture of the group’ as R.M. Kanter theorised in 1977. How to achieve this critical mass? Are ‘pink’ quotas for women in the boardroom effective and desirable? What are the alternatives? Is there a role for regulators in tackling the unconscious bias that protects the glass ceiling and results in promotion gaps? How to guide change for equality of opportunity, recognition and compensation in banking and finance?
This year’s EFiC Conference in Banking and Finance includes a dedicated track session on “Diversity and women in finance”. This is timely as women in finance are still facing major cultural issues in a challenging political environment. We invite submissions of leading-edge research on topics related to diversity and women in finance. While the focus is on women in finance, papers on other aspects of diversity are welcome as well. Novel theoretical papers, including those that integrate interdisciplinary angles, and empirical studies, including comparisons across developed and developing countries, are invited. Topics include, but are not limited to, the following:
• Monoculture vs. diversity in finance
• Women on boards in finance
• Women in top roles in finance and corporate outcomes
• Women leaders and risk culture in banking and finance
• Women leaders and fraud risk
• Women leaders, productivity, and innovation
• Regulating corporate diversity
• Gender under-representation and regulatory challenges for financial firms