The pace of progress may still be slow when it comes to female CEOs; even when Jennie Daly takes up her appointment at housebuilder Taylor Wimpey in April, there will only be nine female FTSE100 CEOs. We’re moving in the right direction though; nine will be a record high.
By contrast, it’s a very mixed picture in the investment industry. Certainly, workplace culture has changed considerably for the better over the three decades since I entered the sector as a graduate trainee. But the proportion of women in key fund management roles has barely risen – in fact, over the past twenty years it’s gone backwards, from 14% (end September 2000) to just 11.2% (end September 2020), according to Morningstar.
It’s not just women who are missing out. Gender-balanced teams perform best in many situations – including when it comes to managing money. I’m often asked whether I think women or men make better portfolio managers; research suggests that both working together is optimal, with mixed teams outperforming single gender teams or funds run by a sole man or woman, and with less risk.
What can be done to solve the stubborn problem of too few women in fund management? Much has already been tried, including special initiatives such as mentoring schemes and female networks. These efforts may have helped deliver individual success stories but had little impact on the numbers overall. What’s more, at this point there’s a real danger of ‘gender fatigue’, with other underrepresented areas seeming newer and worthier in ‘Diversity Top Trumps’.
Yet the problem is not going to fix itself. The Diversity Project has been working with our 90 member firms on a smorgasbord of interventions. We’ve focused on the role of line managers, on workplace culture, on opaque career paths and the need for equal parental leave. We’ve also been shining a light on inspiring career stories; successful women who really enjoy their fund management roles.
All this feels necessary, but not enough to drive real results. Last year the Diversity Project set three gender targets for the next five years: to reduce the sector’s (large) pay gaps by a third, recruit 50:50 men and women, and achieve at least 20% female fund managers. And we took a long hard look at what works – and the real remaining obstacles. This International Women’s Day, we’re announcing a new three-point plan to reach the targets.
First, a big drive to get more women to join the industry – both at entry level and after a career break. Other ‘traditional’ sectors, like law and accountancy, have been successful in recruiting a balance of men and women, but only around 20% of applicants to the fund management industry are female. We are asking all our members to sign up to Girls Are INvestors, GAIN.
This internship programme has yielded encouraging results in its first two years, going from 25 female students offered paid internships in 2021 – with half being appointed to permanent roles – to 145 placements this year. We also encourage members to join our Women Returners programme, to bring back great women who have taken a career break. Now in its third year, the retention rate of those who re-join on a temporary basis is a staggering 90%.
Second, we are focusing on the critical issue of male allyship. The power base of the fund management industry remains predominantly male – so we need men to champion change. The 30% Club delivered better balanced boardrooms because powerful men were leading the charge. My own career was helped enormously by the support of Stewart Newton, the founder of Newton Investment Management.
Today, many men want to help women succeed – but aren’t always sure how best to offer their support. The Diversity Project has created a guide and a group dedicated to helping men help women progress their investment careers.
Third, we will be launching a Future Female Fund Manager Programme, designed to complement the formal CFA qualifications and provide women with the skills they need to feel confident and to overcome any remaining barriers. There are many women’s development programmes; this is the first aimed specifically at nurturing female fund management talent, and brought to the industry by the industry.
The programme will offer a mix of online and in-person training, given mostly by past and present practitioners who know what it actually takes to succeed as a portfolio manager. Places will be available to any woman identified by her firm, provided they also offer her a sponsor. A woman may also put herself forward, enabling her to signal her ambition – something that many tell me they find difficult.
The role of the sponsor is to ensure that the woman is supported back at the firm, to champion her, advise her and to ensure there is no disconnect between the hope that she progresses to a fund manager role and her actual opportunities to progress. Over coming months, the Diversity Project will be consulting with member firms and signing up participants ahead of the first cohort getting underway in January 2023.
HSBC Asset Management, Schroders, BGF, JO Hambro Capital Management and Newton Investment Management are the first five companies to confirm their involvement. The three-point plan is a joined-up, focused effort to – finally – deliver results that the investment industry can truly celebrate on International Women’s Day.