Blog

Kathy Matsui’s new global venture capital fund made headlines last month as it was the first of its kind in Japan to focus on environmental, social and governance principles.

But the news was significant for another reason too. Matsui, who left the investment bank Goldman Sachs in Japan last year and is known for coining the term “womenomics”, is a woman at the head of an all-female executive team – a rarity in the male-dominated financial industry.

Business schools are trying to change that. In order to increase the small number of women in senior finance positions, some schools are making efforts to remove the barriers to their advancement. You’re trying a number of approaches – from designing new curricula to networking on campus and alumni.

For many, the first challenge is to convince young women that a career in this field is welcome and rewarding. “Much of this comes from misinformation about what the financial world is all about,” says Haley Parrin, who recently graduated from UNC Kenan-Flagler Business School. She was the first female president of the school’s Investment Banking Club, which helps MBA students prepare for work in finance.

A wide range of skills: Jobs in the financial industry are often incorrectly referred to as number crunching, says Haley Parrin

She argues that jobs in the industry are often mistakenly labeled number crunching when the work actually requires strategic thinking. Before completing her MBA, Parrin worked in business analysis and consulting.

“What is more? [number-crunching] is much more important than just getting the numbers right, ”says Parrin, who is moving to Morgan Stanley in July. “Many women have these skills to offer, but they don’t know how to apply in the financial services world.”

Katherine Jollon Colsher, executive director of Girls Who Invest, a nonprofit advocating increasing the number of women in executive wealth management positions, agrees. “It’s a job that isn’t often understood,” she says. “People talk about being a lawyer, a doctor or a teacher – but less about being a portfolio manager.”

Change of perception: Students of the Girls Who Invest program to promote women in asset management roles

But while perceptions change, the notion of boardrooms only for men and lonely female analysts remains popular, says Kathy Harvey, assistant dean of courses at Oxford University’s Saïd Business School. “It takes many years to change culture and expectations.”

She argues that as trainers of potential finance executives, business schools are well placed to accelerate changes in culture and expectations. Their job is to give young women a space to examine their future careers with “a sense of self-confidence and the feeling that they can really go where they want”.

There is talk of being a lawyer, a doctor, or a teacher – but less of being a portfolio manager

Jennifer Bethel, professor of finance at Babson College in the US, says schools can also help “normalize” women’s presence in finance. About 50 percent of Babson’s finance professors are women, she adds. “Thirty years ago there weren’t any women professors who were funded by women, and now there are a lot of them,” she says.

Even a small change – she calls it an “an inch deep” layer – can make a difference. As an example, she cites the protagonist of a case study who has a female name. “It’s a step forward,” she says. “But then it’s about finding [real cases on] Companies owned and run by women. ”

Business schools can also call on female finance alumni to include other industry leaders in their classes.

Said’s private equity electives tried just that, says Harvey. “[It] changes the atmosphere in the room and the type of expectations. “

It’s a tough fight

In the UK, women hold 17 percent of senior positions in the financial services sector, a percentage that has barely changed since 2005, according to the Financial Conduct Authority, the industry regulator. In the US, according to Morningstar research, only 14 percent of fund managers were women at the end of 2019 – a number that hasn’t changed since 2000.

These measures seem to be paying off: The proportion of women graduating from the school in financial positions rose from 37 percent in the 2018-2019 class to 47 percent in the 2019-2020 class.

However, Bethel argues that financial awareness raising should begin as a promising career for women while they are still in school.

She cites the Financial Wellness Program, a nonprofit program of the Babson Finance Association. Its members – two-thirds of whom are women, she says – teach basic personal finance skills in schools in disadvantaged communities.

More stories from this report

“You have these great women before those high school kids,” says Bethel, who is also a co-founder of the Babson Financial Literacy Project. “Creating this chain is critical so that you can imagine what [the finance sector] is, ”she says.

Meanwhile, the rise in ESG-focused investments is helping to attract and grow the number of female finance executives.

For example, between 2015 and 2020, 44 percent of senior ESG positions held by Acre Resources, a specialist recruiting firm, went to women.

“Women are already betting on sustainability – and now there is a financial lens,” says Bethel.