There are compelling reasons to promote women to leadership positions — not just in banking, but in every industry. And they have nothing to do with social responsibility.
The Peterson Institute reports that firms with strong female leadership deliver a 10.1 percent return on equity — compared with 7.4 percent for those without.
Those statistics go beyond gender. They’re similar for racial and ethnic diversity. McKinsey reports that companies with greater racial and ethnic diversity are 35 percent more likely to have financial returns above their national industry averages.
The data show that the more diverse your team, the richer the rewards can be. Beyond stronger financial results, companies with a diverse workforce also tend to have increased productivity, improved creativity, better employee engagement, reduced employee turnover and enhanced company reputation.
For additional proof, look at small to midsize businesses. Women own 11.6 million businesses in America — that’s four out of every 10. They generate $1.7 billion in sales and employ nearly 9 million people.
Female leaders are driving the engines of growth and job creation so crucial to economic success. Banks have been instrumental in this outcome, providing the investment capital and cash management capabilities that enable women-owned businesses to thrive.
Nevertheless, only 6 percent of Fortune 500 companies were led by female CEOs in 2017. While the percentages may change — slightly —studies have found the same leadership gap holds true in health care, academia, law and technology.
In the financial services C-suite, women hold fewer than one in five positions, according to a McKinsey study. They account for less than 2 percent of the sector’s CEOs and less than 20 percent of executive board members. Even at the agencies that supervise banking, women comprised just 17 percent of board members.
Corporations put increasing emphasis on diversity and inclusion as a function of their environmental, social and governance policies. But the fact is, diversity has a direct, measurable impact on business growth.
Change begins when companies in all sectors start viewing diversity and inclusion through that lens as well.
While there is work to be done, a strong foundation already exists. Banks have put in place vigorous training and mentorship programs to accelerate advancement for women in business.
Financial services companies have invested in programs to support professionals who’ve been out of the labor force — a significant number of whom are women. As CNBC reports: “Nearly a quarter of educated mothers age 25 to 54 are not in the labor force, and research shows most of them are interested in returning.”
Companies in the financial services sector are also investing in rotational programs, which give early- and mid-career talent the experience needed to kickstart a successful career.
The next step in this evolution is to make sure the entire organization appreciates that diversity and inclusion isn’t just the right thing to do, but the right thing to do for the bottom line.
I’ve been privileged to work with women who are leaders throughout my career. Here’s some wisdom I gained from them:
Expand your network beyond your department or specialty. Look for opportunities to work with people across the organization.
Own your awesomeness! When you have an achievement, share it. Build trust. Be willing to expose your weaknesses, too. Never stop learning from one another.
Above all, be authentic. Merge your personal and professional lives. Differentiate yourself by the qualities that make you unique.
A record 102 women serve in Congress — the highest number in history. More women are running for their party’s presidential nomination than ever before. We’re seeing the beginning of momentous change — and this can be the moment the financial services sector seizes the momentum. All of us can profit from it.
Lisa Todd is senior vice president, Commercial Banking at Webster Bank in Waterbury. She can be reached at ltodd@WebsterBank.com.