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AMERICAN COLLEGE

Diversity in Financial Services: The Time Is Now

I have attended a number of conferences over the past year that were focused on creating a more diverse and inclusive environment for women within the financial services profession. But as I reflect on these conferences, I have to ask myself an important question: At the rate we are progressing, will the industry ever achieve parity for women in my lifetime?  

The audiences at these events were 99 percent female, I noticed. I have long contended, if our industry is to realize any significant change in the representation of women, that change must be driven from the top down. The leaders in charge of enacting policy, who happen to be male, must act as our allies in creating substantive change. 

Our industry can take a lesson from two organizations that have made concerted efforts around diversity and are working to create a leadership pipeline for women and minorities.

The 30% Club originally was created in the United Kingdom in 2010 by executive leadership (chair and CEO members) of FTSE 100 companies. Their goal was to increase the number of female directors on their boards to a minimum of 30 percent by 2020. The 30% Club in the United States subsequently was launched in mid-2014 with a similar goal for increasing gender diversity on S&P 100 boards. At last count, the percentage of women directors in the U.S. had increased from 20.2 percent to 23.3 percent. At this pace, the 30% Club in the United States will be very close to achieving its goal by 2020.

Research shows that 30 percent is a significant benchmark in that it represents the inflection point where critical mass is reached. When a minority group reaches the 30 percent level, it is believed that the strength of their collective voice is heard, and they are no longer perceived as representing the minority.

Another organization driving change is the National Football League, which established the Rooney Rule in 2003 to create opportunities for minorities in professional football. The rule requires teams to interview at least one minority candidate for each open head coach, general manager and front office position. Earlier this year, the rule was expanded further to include women as potential candidates for executive openings in the commissioner’s office. 

Although these efforts are in no way perfect, they do demonstrate an effort on the part of these organizations to create change. Research has shown a link between a company’s performance and increased female representation. By having a diverse group of employees and leaders at the table, you eliminate the possibility of groupthink and create a more open environment for the exchange of ideas.

I would like to challenge our industry leadership to put their money where their mouths are if they are truly serious about diversity and inclusion, and not simply giving it lip service. Imagine the progress our profession would make if the executives and leaders of the major companies came together around a common goal. It would be good not only for the industry but, more important, for the clients we serve. 

There is little doubt that, if given access and opportunity, qualified minority and female candidates will thrive. Their companies and our industry will be all the better for it.

The time is now. We can no longer sit by idly and wait for real change to occur.

 

Jocelyn Wright is director of The American College State Farm Center for Women and Financial Services. Jocelyn may be contacted at jocelyn.wright@innfeedback.com.

Jocelyn Wright is the chair of The State Farm Center for Women and Financial Services at The American College. Jocelyn may be contacted at jocelyn.wright@innfeedback.com. .


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