Among the many views held of the financial industry, a reputation for fostering gender diversity is unfortunately not one of them. While there are steadily more women entering the sector, it still sorely lacks women in key leadership roles. According to Oliver Wyman’s 2016 report on women in finance, women make up 47 percent of American financial firms, yet only 16 percent of executive committee positions and 20 percent of board seats. These statistics on women’s leadership prevail in spite of the overwhelming evidence that women in leadership change the industry for the better.
On February 8th, The Rockefeller Foundation, in partnership with The Council for Foreign Relations and Foreign Affairs, challenged the status of women’s leadership with an all-female panel on innovative finance. The event centered on the work of innovative finance professionals, who are looking for alternative methods of funding to answer some of the world’s toughest questions, such as: How do we fund a quicker transition to a low carbon economy in line with the Paris Agreement? Where will we find the capital for programs that address racial inequality? Or, how do we create economic identities for displaced peoples using emerging FinTech solutions? Additionally, the discussion focused on how our work is engaging private capital markets in funding social and environmental issues, including those highlighted in the UN’s 17 Sustainable Development Goals.
This was, no doubt, an important discussion about important work. Perhaps just as significant as what made up the panel, though, was who made up the panel: women. A room of industry insiders intently listening to four diverse, accomplished women articulating the future of the field was proof enough that we are gradually overcoming even the most arduous of challenges in the struggle for equality.
All finance professionals – not just gender equality advocates – should be newly energized by this all-female panel and what it translates to for the future of financial institutions. Women can be the pioneers who carry us forward, into unchartered territory, in this dynamic industry. In particular, women can provide insight to further tap capital from high-income female investors, many of whom presently distrust financial advisors. In a study conducted by the Center for Talent Innovation, only about half of women in the survey reported having a financial advisor, and of those who do have one, 67 percent feel “their advisor does not understand them – or is not interested in them.” Such distrust leads to losing out on idle female investment capital, which could represent a $5 trillion asset loss in the United States alone. This problem would be more easily eradicated with the inclusion of more female voices in the conversation, who are more attuned than male investors to what will attract female investment.
Moreover, with alternative perspectives, female leadership drives companies to enhanced effectiveness and higher returns, outputs that innovative finance needs to grow as a field. Women place a high importance on personally investing in ways that make a positive impact and are socially responsible, meaning female capital is prime for investment into innovative financial mechanisms to help advance the market. Furthermore, millennials are increasingly taking the reins of the global economy, which means socially responsible investment will become the norm. The future of finance is innovative finance, and for this sector to grow and reach its potential, we need those alternative perspectives; the future of innovative finance is female.
“We can’t afford to keep women out of leadership positions, or we will miss huge social and business opportunities.”
The implications of an all-female panel, in a field as lucrative as finance, are substantial for gender equity and diversity in the future of work. In the absence of female leadership, it is more difficult for younger generations of women to envision themselves as leaders, especially if they are not regularly exposed to female leadership from the beginning of their careers. The Foundation has explored this issue of female leadership in the workplace more broadly with its launch of the 100×25 campaign, which aims to place 100 female CEOs at Fortune 500 companies by 2025. We aim to push the conversation on the importance of gender equity in the workplace – at all levels – in realizing an economy that creates more opportunities for more people. Fostering this dialogue is imperative for innovative finance and other industries, for as the Foundation’s former President Judith Rodin has stated: “We can’t afford to keep women out of leadership positions, or we will miss huge social and business opportunities.” Merely by holding a seat on this panel, Saadia Madsbjerg, Diane Garnick, Arunma Oteh, and Sonal Shah have proven to countless women that there is room for them at the top.
By holding an all-female panel on innovative finance, The Rockefeller Foundation made a statement, a statement regarding the importance of female voices being not just included in the conversation, but at the forefront of it. To be a small piece of the puzzle that led to its inception will endure as a defining moment of my time at the Foundation.