A Detailed Plan to Put More Women in Charge in Finance - Building Gender Balanced Business

• A new voice has entered the debate calling for more women, and more cooperative and risk-averse approaches, in the finance industry.

• Linda Basch is president of the US-based National Council for Research on Women. She writes in the Christian Science Monitor, “[I]t’s time to deal with the most important question of the day: How do we get more women into the good-old-boys network at the highest levels of the financial sector?”

• Basch highlights the calls for greater gender diversity in finance, citing such sources already quoted on this site as the Financial Times and Nicholas Kristof. She summarizes sociological and psychological studies showing how women tend to be more comprehensive thinkers and more leery of risk. And she notes the dangers of non-diverse groupthink.

• Then she takes the next step: listing steps nations, the industry and individual companies should take to expand diversity and restore health to global markets.

• First and foremost, and echoing the Financial Times as well as others, Barsch calls for “critical mass principle”. Not necessarily quotas, but some sort of push to bring the share of previously underrepresented groups to a third of the decision-makers.

• A third is a large enough share to foster the benefits proven to be associated with greater diversity, she notes. The benefits of diversity show up not just in companies but also in public policy, she notes.

• Next, foster greater networking and advancement of the many qualified women. Steps to better companies and countries that way are:

1. Use management training across the organization to counter and eradicate stereotypes.
2. Prove and promulgate the corporate advantages of diversity.
3. Make the criteria for promotion clear, and develop transparent ways of implementing them.
4. Improve training of women in leadership and negotiation skills in order to strengthen and expand the leadership pipeline; providing mentors is a key step for this.

• Barsch concludes: “If we don’t adopt a “critical mass principle” – and it’s up to those in the sector to figure out how to set industry-wide goals – we’ll be doomed to more of the same conventional wisdom.”

(More detailed advice can be expected in the National Council for Research on Women’s imminent publication, “Women in Fund Management: A Road Map for Achieving Critical Mass and Why it Matters.”)

The Christian Science Monitor commentary