Just 13 per cent of the biggest US companies have female CFOs and women in the financial sector tend to have worse pay and harsher disciplinary conditions.
Only 15 (roughly 10 per cent) out of the world's 146 biggest nations have a female leader, as of March this year, according to a study by Pew Research. If we're that bad at electing female leaders, it doesn't bode well for assigning women to positions of power and responsibility further down the chain. In fact, things aren't much better in the world of corporates or the financial sector either. In a 2016 study of the Fortune 500 – America's 500 biggest corporates – just 13.8 per cent had a female executive in the CFO role. This is an improvement on the past but we still have a long way to go.
Harsher misconduct punishment
Differences in pay, bonuses and hiring practices have been well researched and documented. But it's not only harder for women to get appointed to senior finance roles such as CFO; they also face harsher conditions in the financial sector compared to men. A recent study by the National Bureau of Economic Research (NBER) – discussed in this blog from Thomson Reuters – found that women working in financial services are subject to more severe disciplinary action when it comes to misconduct, compared to their male colleagues. The study, in March this year, of 1.2 million US financial services employees, highlighted the following findings:
- 83 per cent of firm managers and 83 per cent of firm executives or owners were men;
- firms with a higher percentage of male executives issued more severe punishment of female advisors for misconduct and were much less likely to hire women with a history of misconduct;
- men preferred to hire and work with men;
- a disproportionate number of misconduct complaints against women stemmed from the firm (41 per cent versus 28 per cent for men), rather than customers or regulators;
- women had a 20 per cent higher chance of losing their jobs than men;
- women were more likely than men to resign or be fired following exposure of misconduct;
- women received substantially lower benefits in severance packages.
This clear picture of women being judged far more harshly than their male colleagues and being allowed fewer opportunities to reintegrated following exposure of misconduct, as well as the financial disadvantage offered to women, is something that should be of real concern to people, male and female, in all sectors.
As Deloitte's Carol Larson points out, there is now a substantial body of research that shows that having women in top leadership roles leads to companies performing better across the board. Larson has recently been appointed Champion for Women Executives in Finance for the CFO Program at Deloitte and she told Financial Executives Daily that unconscious bias – from both men and women – is a real problem, as is the frequent exclusion of female colleagues from important decisions in the workplace. She says: “You still find women feeling like they’ve missed some memo. They’ve missed some message that the guys all got and the women somehow didn’t get the code they were supposed to understand to make something happen. A lot of that is, again, the unconscious bias. It’s also just the comradery, since men still hold many of the leadership positions.”
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