DiversityFeb 14 2020

How to overcome obstacles that keep women from the top

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
How to overcome obstacles that keep women from the top

Do women in senior or top positions make a difference to a company?

According to research conducted by Harvard Business Review last June, women in leadership positions are perceived to be just as competent as their male counterparts, if not more so.

Female leaders were rated as excelling in taking initiative, acting with resilience, practising self-development, driving for results and displaying high integrity and honesty. 

In fact, they were thought to be more effective in 84 per cent of the competencies that HBR most frequently measures, such as ‘drives for results’ and ‘innovates’.

Men were rated as being better on two capabilities: ‘develops strategic perspective’ and ‘technical or professional expertise’.

Key points

  • Female leaders excel in many areas that men do not.
  • There are not many role models for women in leadership positions.
  • Men are more prone to risk-taking.

Chris Wagstaff, head of pensions and investment education at Columbia Threadneedle, says there is evidence to show women make very good fund managers – possibly better than male fund managers.

He cites research from 2009 by the French investment funds association AFG, which found that female fund managers produced more consistent and less volatile performance than their male counterparts.

Mr Wagstaff says: “The behavioural finance literature suggests that women do not succumb to as many damaging systematic biases, or cognitive errors, as men. Of course, it is always dangerous to generalise, and much depends on the personality of the manager, but it would seem that women are more analytical in their decision making. 

“Women also appear not to blindly extrapolate perceived trends that more often than not prove to be just a series of random events that look like a trend. That is, they draw more extensively on their thoughtful ‘System 2’ way of thinking and less on their quick fire ‘System 1’ than men.”

Strengths and weaknesses

Another study that Mr Wagstaff points to was carried out in 2013 on 1000 brain scans, by the University of Pennsylvania. 

The research argued that although women’s brains are 8 per cent smaller than men’s, they have more neural interconnections, with the left and right hemispheres – the logical and intuitive sides of the brain – being highly connected. 

By contrast, men’s brains are typically stronger between the front and back regions. The front part of the brain is involved in planning, organising, problem solving, selective attention, personality and a variety of “higher cognitive functions” including behaviour and emotions, whereas the back region processes shapes and colours.

Mr Wagstaff says: “Consequently, women perform better at bigger-picture and situational thinking. They are also better listeners than men, employ more analytical reasoning as the behavioural literature suggests, and have a better reading of social situations. 

“However, men are generally better at problem solving, performing mathematical tasks, processing spatial information about their surroundings, engaging in co-ordinated actions and have generally faster reaction times than women.”

Mr Wagstaff goes on to add: “When it comes to assuming risks, whether intended, unintended, potentially rewarded or not – all of which ultimately determine a fund manager’s performance – men’s brains are decidedly more geared towards risk-taking.” 

He added: “Indeed, male brains experience a bigger burst of endorphins and sensation of pleasure when faced with a risky or challenging situation. In fact, the bigger the reward, the more likely a man will take a risk, excepting that risk-taking behaviour is somewhat tempered if a loss has recently been experienced.”

Despite the science, barriers remain when it comes to the numbers of women executive directors. 

Lack of robust selection processes, negative opinions of executive search companies, and views about the shortage of suitably qualified women are reported, while most participants did not see the development of the female executive pipeline as a top priority, according to a study by Dr Claire Barnes, a chartered organisational psychologist and a teaching fellow at Birkbeck University.

Misconceptions at the top

Bev Shah, founder and chief executive of City Hive, who worked for 15 years in the investment sector, says there is a misconception that women have been allowed to take on roles to make up numbers.

She adds: “Because of the imbalance of women in senior roles, they can often be judged against the experience of a handful of women who have gone before them. 

“And conversely, that handful of women are expected to represent a much broader and diverse category of people. Essentially, the sample size skews the data. So people draw conclusions about women that are not based on the average behaviour or performance.” 

One of these conclusions is the idea that all women manage in the same way.

But Ms Shah says that often the most successful women exhibit behavioural styles with more emphatic ‘male’ traits such as competitiveness, as they are seen as closer to the default management style. However, a lot of women managers are more collaborative. 

She adds: “This has often arisen from necessity; they can’t progress as they are judged more harshly for their individual contributions and perhaps ignored. 

“Sometimes the origins are taking on responsibility for activities with collective benefits – there is plenty of research that shows women take on more communal tasks than men who manage fine when there are no women around.

“On the positive side, often women can find collaborative approaches to be more effective – they can strengthen teams by empowering more people.”

Diversity in leadership goes beyond gender. Headhunter Russell Reynolds ran a study last year looking at the differences in business outcomes for companies that had made advances in diversity and inclusion compared with those that had not.

The results found that at D&I companies – those where D&I is treated as a business and organisational issue and engages all employees – there was 35 per cent greater employee loyalty, 30 per cent greater innovation, 30 per cent greater performance, 19 per cent increased customer insight and 33 per cent greater sense of belonging.

Amy Hayes, who leads Russell Reynolds’ leadership advisory business in the Americas, says: “Inclusive leaders tend to have improved collaboration. They have higher retention rates and people who report to inclusive leaders say they feel more free to experiment, innovate and be successful, operating as their authentic self.

“Those teams tend to be more likely to make high-quality decisions and perform at higher levels than others. They tend to be more future-focused and able to navigate disruption and transformation, which is becoming an increasingly important aspect.”

Ms Shah says: “Diversity of all kinds is beneficial across the business. However, it’s particularly important to see it at senior levels because it allows different ways of thinking, which can in turn enable more effective business performance.

“Visibility plays a critical role in demonstrating that there are different ways to be successful, and encourages more junior staff to see themselves in senior positions.”

And it makes a difference when winning business. Ms Shah adds: “If a potential client sees your team and they can only see a wall of men, it’s telling them something about your business that looks increasingly out of touch.”

Ima Jackson-Obot is deputy features editor of Financial Adviser and FTAdviser