Board Game: Gender Representation in Financial Institutions

Has gender representation changed significantly in the financial sector, not just on the trading floor but in the boardroom? Women of Power 2021 honourees Angelina Kwan and Karena Belin tell us where we are, where we are headed and what we must do to ensure we stay on the right track.

In a 2013 New York Times bestseller, The Athena Doctrine, John Gerzema and Michael D’Antonio surveyed 64,000 corporate executives in 13 countries, and concluded that global leadership is trading the “masculine” winner-takes-all approach for values previously deemed as “feminine”, such as nurturing, cooperation, communication and sharing. Yet in spite of such positive finding, many industries famed for their patriarchal and exclusionary cultures largely remain boys’ clubs – in April this year only 15.7 percent of board members of Hang Seng Index-listed companies were female.

Financial services is a notable flagbearer for a workplace culture that discriminates against women, sexual minorities and the disabled. Last month, for example, allegations were reported that Goldman Sachs paid US$12 million to bury allegations of sexual assault and harassment by the bank’s senior male employees. Indeed, it might be reasonable to assume that many areas of banking culture continue to be driven by those who learned from the corporate sharks whose values and ethics resulted in the Enron scandal, the collapse of Lehman Brothers and the financial crisis of 2007-2008.

Says Angelina Kwan, CEO of a financial regulatory consultancy Stratford Finance and Prestige Women of Power 2021 honouree, “With the rise of Trump and Putin still in the office, people no longer want to be politically correct. The United States has become very polarised. There’s a real reversion backwards. And the dismantling of Roe versus Wade was a terrifying point.” It’s almost as if the Christian nationalist rhetoric of Trump’s supporters has seeped through the steel-and-glass of Wall Street, leading to a resurgence in workplace harassment, bullying, pay discrimination and gatekeeping of promotion opportunities. 

Although the examples above refers specifically to the US, discrimination is a global issue. The solution, according to Kwan, is state-mandated transparency in salaries and board demographics. “It’s a spotlight,” she says. “It’s reporting about pay to the government. If you look at what the UK has done, and other countries that have required this, you’ll see a massive shift towards equality. When they started reporting on the numbers of women on boards in the UK, the [numbers] went up, because these firms didn’t want to look bad.” Kwan believes that shining a spotlight on the corporate ecosystem will ensure compliant behaviour by management and employees. “It will also shed light on the whole sector’s norms because accounting firms will be compared to accounting firms and law firms will be compared to other law firms,” she adds. According to Kwan, no such policies currently exist in Asia, though the Hong Kong Stock Exchange (HKEX) recently began requiring that at least one board member of a listed company in Hong Kong belongs to a different gender. 

Policies are one of the most efficient ways of driving change. However, setting quotas might not be a solution to the core problem, says Karena Belin, Women of Power honouree, FinTech entrepreneur and co-founder, COO, CFO and RO of the tech investment platform AngelHub. “In FinTech, you’re looking to fish in a pond that’s already gender non-diverse. The problem starts much earlier. We need to ensure women and girls have access to technology and curricula that drive technology and are digitally literate. As for financial services, they might not have the right HR policies in place to champion that talent.”

Belin also believes that enforcing quotas in companies might exacerbate the bias instead of eliminating it. “Arguably, you don’t take away the filters,” she explains. “Some people might think they’re giving a candidate an unfair advantage by hiring her instead of her male competitor to fulfil a quota. In the future, whatever she’s going to say isn’t going to be seen as good enough, and that’s how you reinforce the bias.”

Amending curriculums and policies are a bureaucratic and organisational challenge. The latter often requires a legal precedent to trigger it. Here, Kwan sees professional communities as a facilitator. “I started in audit and moved into compliance, which was a new industry,” she says. “Nobody knew what it was. We had secretaries, lawyers and auditors working there and making sure that a financial-services firm complied with the rules. So I started a compliance office group.

“We worked with the SFC and got people from the industry together. A few big investment banks weren’t happy, because they had a direct line with the SFC and didn’t want to share it. We grew from eight to 400 people.” She also mentions the efforts of lawyer Jimmy Chan, who formed a group within the Law Society of Hong Kong that campaigns for legislation that would recognise same-sex marriage even before Gigi Chao set up Hong Kong Marriage Equality. 

Leading financial institutions have set up initiatives to nurture and support female talent, including JP Morgan’s Winning Women, Bank of America MBA Diversity Fellowship, Credit Suisse’s Women’s Mentor Program and, perhaps ironically, Goldman Sachs’ MBA Fellowship (though you can’t help but question the efficacy of such programmes when bombshell after bombshell exposes the misconduct and non-compliant behaviour so many banking executives share). “Some companies have these wonderful mentors and policies, but the actual implementation isn’t there,” says Kwan. And why aren’t the women who enter some of these programmes moving up to higher suites? “These programmes need to be merit-based and consider that women work differently from men. They should be constantly reviewed to ensure everything is working.”

Kwan believes enforcing, controlling and reviewing such policies should be undertaken by management committees. “Six or seven members of HR, compliance, front office, legal and maybe CFO – they should be the ones to see how things are running. The board is the second body that must oversee the company is doing the right thing by its employees, and giving women – and men – fair opportunities.” In an ideal workflow, says Kwan, the management committee would come up with ideas to propose to the CEO, who, in turn, would seek the board’s approval. Then, the committee would implement the greenlit action points, which the board will review regularly.

Ultimately, the answer to fair representation and equal opportunities is never straightforward. These issues are symptoms of the system’s flaws and by definition require systematic solutions. The transformation could potentially even begin by reforming secondary education, perhaps with new curricula, and while a new generation is growing up, professional communities could campaign for transparent corporate policies. Maybe then we wouldn’t have to worry about gender diversity statistics on boards of financial giants. But until then, the game is ongoing.