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Gender and diversity in financial services

There is a raging debate in western corporate circles regarding the percentage of women in leadership positions including corporate boards, parliaments, multilateral and educational institutions. With the arena of the most powerful businesses in the world resonant with a discourse on the barriers and stereotypes that keep women from climbing to the top of the corporate ladder, it is time that companies in Pakistan also focus on issues of gender, diversity and leadership so as to take up this agenda and truly evaluate themselves on this dimension.

Despite having a woman prime minister as well as a woman governor of the State Bank of Pakistan in the past, the numbers for representation of women in financial and economic decision making roles in Pakistani financial institutions show an extremely lopsided and dismal situation. In fact, there is not a single commercial bank (apart from First Women’s Bank) with a woman CEO or a woman member of the board of directors; even senior management and group head level is predominantly dominated by men in banks.

An observation of the key commercial banks and the State Bank of Pakistan shows that women representation in top management is less than 2%; or specifically a total of 9 women among the top ten banks; this is a glaring diversity issue especially in the broader context that commercial banking has a fairly high number of women entering the profession from entry level position; however, only men are percolating through to the top, which is a blunt reminder of the case in point.

In mutual funds, the number of women on the boards is a total of 4 out of a 140, or less than 3%, and in terms of assets under management, this would be equivalent to women managing approximately 1.5% of total industry assets. Even on investment committees, the percentage of women is 8% or specifically, 11 out of a total of 131! In terms of assets under management, this would notionally represent approximately 16% on average of total industry assets under management. The three stock exchanges of the country have amongst them only one woman board member on the Lahore Stock Exchange and none on the Karachi and Islamabad Stock Exchanges or only 1 out of 32 directors of the three boards combined.

To address this issue, first and foremost financial services firms need to be mindful of this gap, and secondly help address this by being an equal opportunity employer in letter and spirit. As a first step, this could be done through identifying good quality women candidates by investing in recruitment, training, and most critically mentoring and encouragement to ensure that women are able to dream their individual dreams and more and more climb right to the top of the proverbial corporate ladder.

Secondly, some reflection is warranted by organisations regarding the prevalent corporate culture which includes softer issues such as barriers to communication, degree of participation in off site, networking or industry events (cricket, albeit enjoyed by some, is not a hugely popular sport for Pakistani girls,) etc. Employee handbooks need to articulate gender sensitive policies such as that on subtle and blatant harassment, discrimination, and employment contracts need to lay out with clarity maternity leave and other childcare policies. The silence of companies on certain themes leads to a hesitation in demanding legitimate benefits which may be perceived as a negotiation for special treatment; whereas putting them out there leads to a healthy discussion on issues that everybody was previously tiptoeing around.

Other obvious indicators to identify and track would be a disparity in the average compensation levels of men and women performing similar roles and responsibilities. A study in the US found that employers typically compensated male employees based on potential whereas female employees were compensated based on the work already performed by them. In essence, women are judged more harshly and not given the benefit of the doubt when it comes to allowing opportunities for increased responsibility and professional development, which in turn would naturally lead to higher compensation levels and attaining key management positions. Women internalise the signals and pressures of society and lower their own expectations of what they can achieve. This phenomenon explains the situation of stunted potential and a self-fulfilling prophecy of the proverbial ‘glass ceiling’.

Creating a more diverse decision making environment would render many benefits such as improvement collective performance through bringing in multiple approaches and varied experiences and perspectives to the table. Also, women typically possess a different set of value systems and ethical compulsions compared to men. In terms of benefits, it has been clearly illustrated that diversity within corporate decision making improves the quality. However, this will only happen if space is created to truly embrace that diversity rather than just ticking a check box of having a woman on a board seat or the investment or management committee table.

Are companies set up to process the fact that women bring something to the table that is simply different from what men do and is that difference respected and nurtured or met with indifference, insensitivity and discomfort? If a man is driven towards his goals and goes after them, is he viewed as assertive with good leadership potential, and if a woman does the same, is she branded as aggressive and cutthroat? Do women in the professional world need to overcompensate for their gender by having to be unemotional and at times, unfriendly or blunt, leading in turn to a lack of personal popularity and professional success?

Are all women in the Pakistani workplace encouraged and expected to behave like men and assume a ‘professional’ personality rather than bringing “their whole selves” to work as advocated by Facebook COO Sheryl Sandberg who publicly confesses to crying at work?

Are women who do not conform to the stereotypical norms of our society of humility and subservience branded as ruthless, bossy, belligerent or feisty, terms that are all descriptive of superficial traits that cannot and must not define the professional and entrepreneurial achievements and contributions made by somebody and what he or she represents.

Is it true that women may actually need to be more assertive as they may perceive real and nuanced challenges to their authority more than men in the workplace? Is it true that managers will take in their stride far more professional pressure and occasionally abuse from men whereas if it’s from women, their egos get involved in the process? Are authority and respect positively correlated for men and negatively correlated for women? Are our financial institutions placing pressure on women to fit in as opposed to standing out? Even legendary investor Warren Buffet generously explained that one of the reasons for his great success was that he was only competing with half the world’s population…

Rabia Fida, "Gender and diversity in financial services," Business recorder. 2013-10-07.
Keywords: Social sciences , Social issues , Social needs , Social problems , Social values , Social system , State Bank , Women rights , Violence , Paksitan , SBP