Women are increasingly choosing finance as a career option, but more work is needed to encourage them to pursue postgraduate study and leadership positions. Could increased access to positive role models hold the key?
Young South African women need exposure to strong role models in the financial industry if gender imbalances are to be corrected, say industry leaders.
Tanja Tippett, an Investment Manager at Old Mutual Investment Group and Adjunct Associate Professor in UCT’s Faculty of Commerce, says more interaction is required between influential women in finance and female students at secondary and tertiary education level.
“There has been an improvement in the number of women studying commerce undergraduate degrees, but even so we still see very few continuing to postgraduate level,” said Tippett. Around a tenth of the university’s Master’s students in finance are women, she says.
Tippett was the organiser of the Women in Finance event at UCT on 17 August. The event aimed to expose female undergraduate students to successful role models and pique their interest in postgraduate study – and in so doing, help correct the gender imbalance both in higher education and in future career choices, says Tippett.
Speaking at the event, held by the African Institute of Financial Markets and Risk Management (AIFMRM), female leaders from a number of leading financial institutions including Liberty Life, Rand Merchant Bank, Old Mutual, Nedbank, MMI, Thomson Reuters and Absa discussed the prospects for women rising in the ranks of finance.
A recurring theme in the recollections of many female industry veterans was the need for courage in a largely male-dominated field, despite increasing evidence that diversity is not only beneficial but necessary. Tippett cited the recent MSCI Japan Empowering Women Index (WIN) developed by MSCI, while Thomson Reuters data scientist Reona Bassudeo noted data suggests that greater diversity is essential to survival.
Overall, South Africa has made strides in its attempts to improve gender diversity. An earlier Grant Thornton International Business Report found that already in 2013, South African businesses were among the leaders when it came to planning to hire more women.
However, the most recent Grant Thornton report found that the glass ceiling remained at higher levels: a global trend of poor gender diversity improved by a scant one percentage point since 2016, with just 25% of senior roles held by women.
In the finance industry specifically, South Africa has some powerful women in finance. Gill Marcus, Maria Ramos, and Nicky Newton-King have all made their mark. In terms of raw numbers, however, representation remains skewed.
A 2016 Women in Finance report by Oliver Wyman, which covered over 100 interviews in over 20 countries, found that in South Africa, 27% of exco members in financial services were women. Nonetheless, despite this lopsided representation, South Africa outperformed numerous other countries.
Tippett argues that a more gender diverse finance industry will be advantageous to all. “Women bring a distinct element to a field that has traditionally been male-dominated,” she says. “It is beneficial to bring people into the workforce who think differently or have an alternative approach to problem solving.” Tippett’s view is supported by a well-known McKinsey study which found that companies in the top quartile for gender or racial/ethnic diversity were more likely to have financial returns above their national industry medians.
Researchers at Harvard agree. According to Bloomberg, Harvard research indicates that globally, female leadership is “stuck in the single digits.” Yet a CSRI review of over 2,000 companies found that in the actively managed fund business, female managers consistently outperform their peers. “Several academic studies conclude that women have better performance – on both an absolute and a risk-adjusted basis – than their male counterparts,” the report noted. According to a Goldman Sachs study, there’s a biological reason: the higher the testosterone level, the greater the chance of more frequent trading – which eats away at returns.
Tippett believes finance is an increasingly viable career option for women and that with support and positive role modelling – as well as leadership that shows how to overcome common challenges – the gender imbalance has a better chance of continuing to improve.
There is also growing support among women within finance careers, for instance, events and networking opportunities arranged by the Women in Finance network.
Panellist Anel Bosman, ME: Markets for Nedbank CIB, encouraged young women to jump at any and every opportunity. Growing up, her career options were “to become a teacher or Girl Friday,” she said, but selling beauty products as a teen gave her a taste of independence – which set the tone for a lifetime of wanting more from her life.
Judy Faure, Chief Risk Officer for Old Mutual Emerging Markets, said it was important to be flexible about family roles. The support of her spouse and family was essential, she said. “For many years there was the notion that there are only so many positions for women in a company, which perhaps exacerbated competition between women rather than support,” said Co-Head of Investment Banking, Emrie Brown. “That is beginning to change.”