Purpose
Throughout all of our lifetimes, we are continually asked the unknown question: “What do you want to be when you grow up?” There’s nothing wrong with asking the question, but as a junior in high school, the answer to the question somehow seems less clear than it did when I was in elementary school when I thought anything was possible. That being said, it hasn’t stopped me from exploring different options. I’m fortunate enough to have an older sister who has always been a constant in my life and has given me a perspective in which most other people might not have access too: a large bank of college and work experience. Between the summer of her sophomore and junior year in college, I actually helped my sister study investment banking questions which was one of my first exposures to the world of finance. While learning about balance sheets, M&A deals, and divestitures wasn’t the scintillating things to 11 year old me, as I look back on that time, I am struck with just how much I remember from that summer as well as how much I’ve applied that knowledge to current business news that I see around me. That being said, this is what has largely sparked my interest in finance and business, but one of the problems that I saw within the industry both from research and from descriptions from my sister’s experiences was that there was a lack of women in this industry. Thus, my independent study idea was born that both combined my interest in business along with advocacy.
Causes & Effects
It’s no secret that America’s social climate has changed drastically within the past 100 years but many of the problems that we faced then are still underlying issues in America today, including discrimination against women, especially in the workplace. Within the sectors of finance, there is a large gap between men and women and these gaps get exacerbated as you travel farther up the corporate ladder. Big finance companies like McKinsey, BCG, or Blackrock have all seen these disparities and while it differs for different sectors of finance, it’s a pretty general trend that comes with the sector. However, an interesting fact is that in some cases, the entry rates for men and women are evenly split, but the drastic split comes in the years following as women get pushed out of the managerial positions and passed over for promotions in favor of men. In an interview I did with MK Flynn, an editor in chief of PE Hub, a popular private equity magazine, she mentioned that women are very subtly pushed out of the managerial positions by being asked to handle the public relations side of the company. This subtle eviction of women from decision making positions in the financial sector show just how the divides of gender have made themselves so apparent. The awareness of the constricting gender roles that society has set out for women and men have started to make their way into the minds of a new generation of workers in corporate America. This is why doing research and conducting studies on the effects of our mindsets of what men and women should be doing are so beneficial for realizing what we are missing out on. The whole point of adding to diversity in a workplace is supposed to be trying to provide different perspectives on approaches and strategies. If women are supposedly more “kind and understanding” then they should be able to try and use those skills in a boardroom surrounded by their male counterparts. By not including that perspective or even by intentionally excluding it, it endangers potential opportunities that could’ve been gained. Women’s mannerisms have historically been viewed as meek and submissive but these precedents no longer hold true for the entire female-identifying population. Additionally, the hypocrisy of the system that the corporate world has created to women and men having different traits in their jobs and how they are perceived. For example, the term of “ambitious” which has a positive connotation might be used to describe anyone, but when men show their want to move up the corporate ladder, they are considered “confident and tenacious” but when women decide that they want the same thing they are considered “aggressive and cunning.” These are the gender roles that we have set aside for men and women in the workplace but have also perpetuated the cycles of sexism and misogyny in the workplace. But these have disproportionately affected women of color as they are continually marginalized and passed over for promotions time and time again. This keeps white men in power and leads to continual leadership from white men, not allowing diverse perspectives to take their role in shaping the future of corporate America.
At the more basic level, there are also imbalances between collegiate major participation of business and finance for women and men. It’s more likely that men go into business and finance majors than women and because of this, it factors in the early stages of the cycle of keeping men in the higher positions as there are higher chances of them being picked at a more statistical level. Fortunately, there has been more increased awareness in the past few years with more groups being created in colleges to inspire women’s participation in the business world. For example, the Duke BOW club or the Duke Business Oriented Women where they host workshops and guest speakers to help build the next generation of women’s leaders in the business world. These are the types of organizations and groups that help women around the country and perhaps around the world help to encourage women to enter a male dominated industry. Especially at the college level where students are just discovering what they want to do with the rest of their lives, giving the opportunity to explore instead of closing the door is a great way to increase the entry level rates to get more women in the business and finance door.
But even after women have gotten their feet in the door, there is still societal pressure to push women out of working long hours. There are societal expectations that bleed into the expectations of women in the workplace to start relationships and families during the ages when the most growth is supposed to happen. Studies have shown that younger employees have a short time span between promotions as they work their ways up the ladder, but if women are expected to settle down, they are seen as a liability to companies. The logic to companies is that with paid parental leave, it’s an additional cost and there’s an increased chance that productivity goes down since there’s less time in the day which can be attributed to working on projects or whatever their job entails. This just shows that this goes beyond finance, these gender roles are applicable in any corporate workplace, but for many women, it’s especially pronounced in finance. Either way it’s a lose-lose situation for women in which the system is designed to work against them whichever way they choose. If a woman chooses to settle down and start a family to appear committed, she loses chances for promotions as she’s seen as a liability. On the flipside, if a woman chooses to stay independent she might be viewed as isolated and not a team player. This combined with the fact that most of the time having a paid option for parental leave isn’t an option. Furthermore, this is also becoming more relevant with COVID-19 where there might be a silver lining in everything. With isolation that accompanied the pandemic, family time and values became more important than ever. As more of the spotlight was shined on how time consuming it was to work and take care of children at home, corporate workplaces had to adapt and change policies to become more accomodating which many studies believe won’t change back as we come out of the pandemic. The societal pressures that we put on women to adhere to the idea of starting a family but also allowing women to make their advancements. The choice for women is one where they aren’t allowed their own autonomy and this is the area in which we need to see the most reform in mindset.
But these causes have lasting effects too as the manipulation of the system plays a part on how we view women and people of color in leadership positions. In my research, I came across an interesting effect called the glass cliff phenomenon which is a more extreme version of the glass ceiling effect which more people are familiar with. The glass cliff phenomenon is when women are promoted to positions of leadership during a crisis when there is a higher chance of failure for them. With a higher chance of failure, this means that there is more of a chance for the company to reason that women are incompetent in the roles of managerial positions despite the undeniable disadvantage that they are put at when they are promoted to those positions. Women are forced to be at an automatic disadvantage where they are assumed to be less competent than their male counterparts. This is one of the most long lasting effects, but this demotion of women in the workplace hurts everyone on a more holistic level. The economy is based on how successful companies are in their own rights and many jobs are dependent on the tech and finance hubs in America. With the STEM fields already dominated by men and the finance ones as well, these are missed opportunities for growth and different perspectives. A Forbes article explains how the mindsets that we currently have exclude potentially talented individuals from the market but also discourage them from even entering in the first place. This could hurt the overall economy and business could see a drop in GDP by nearly 2% within a span of 5 years. If we don’t start changing our mindsets to be more inclusive, this could end up hurting our economies more than to appease the egos of current business leaders.
Solutions
Promoting more women-owned businesses and more diverse businesses. Changing the mindset that having diversity in the workplace changes sexism in the workplace – it’s changing the whole system
In order for women to truly thrive in the corporate finance world, the system must be reformed to give more of a choice to have the best of both worlds. The corporate leaders need to start recruiting at groups in colleges where they focus on trying to be more inclusive like the Duke Business Oriented Women. This helps to promote more recruitment and increases the participation rates for women at the entry level. Essentially, this helps at the beginning with getting their feet through the door and opening finance up as a more realistic career option. Secondly, reform of parental leave policies needs to be improved where women can support their families without having to worry about providing for their families while raising a new born child. In addition, this becomes more important than ever as abortion rights are currently being questioned and debated about because women might not alwyas have the choice of when they want to start their families and if abortion is banned in their respective state, their chances for moving up shouldn’t be taken away from them for a choice that they had no say in. Abortion relates directly to women’s right and the way it impacts a woman’s progress in her own career. Therefore corporate reform for parental leave policies need to be more forgiving and accommodating for single working moms and any new moms in general. These are only a few of the solutions in which I came across in my study, but the most important thing to learn moving forward is being more aware of how the system works against women and people of color and trying to not only help yourself but also helping others.
Works Cited
Bindley, Katherine. “The Sabbatical, a Power Move for the Burnout Era.” Wall Street Journal, Jan. 2022.
Diehl, Amy, et al. “Research: How Bias Against Women Persists in Female-Dominated Workplaces.” Harvard Business Review, 2 Mar. 2022, hbr.org/2022/03/research-how-bias-against-women-persists-in-female-dominated-workplaces. Accessed 17 May 2022.
Ellingrud, Kweilin, et al. “Closing the gender and race gaps in North American financial services.” McKinsey & Company, 21 Oct. 2021. McKinsey & Company, www.mckinsey.com/industries/financial-services/our-insights/closing-the-gender-and-race-gaps-in-north-american-financial-services. Accessed 7 May 2022.
Flynn, MK. Personal interview with the author. Jan. 2022.
Maurel, Arnaud. Personal interview with the author. 4 Mar. 2022.
Whillans, Ashley, and Grant Donnelly. “How Men and Women Treat Deadlines in the Workplace Differently.” Wall Street Journal, 30 Oct. 2021.