What is ESG Investing? Saturna Capital

The Future Can Be Female: Starting the Finance CEO Pipeline Even Earlier

By Jane Carten, Saturna Capital

Above Image from: What is ESG Investing? Saturna Capital video

Jane Carten-Saturna Capital-The Future Can Be Female- Starting the Finance CEO Pipeline EarlierWhen I walk into a room and see a crowd full of white men over the age of 40, I know I’m in the right place. Lack of diversity in the asset management industry is a fact that is palpable.

Earlier this fall, when Jane Fraser was announced as the next CEO of Citigroup, there was much celebration for the first woman to head a Wall Street bank. One Fortune headline promised a tell-all about how Fraser “broke banking’s highest glass ceiling.” An article in the Financial Times stated that there was an “amorphous sense of tribal pride, a collective ‘we did it.’”1 But given Citi’s recent regulatory troubles — resulting in a $400 million fine for “unsafe and unsound banking practices”2 — Fraser’s promotion may appear, to the cynical, like just another example of an extremely capable woman being appointed to a glass cliff. It’s been well documented that women and minorities are more likely to be promoted to “top leadership roles when an organization is in crisis,”3 but regardless of the mess that needs cleaning at Citibank, having more female leaders, visible role models, is crucial for developing the next generation of female leaders in finance

Cited within the same Fortune piece that announces Jane Fraser’s shattering of the Wall Street glass ceiling is a McKinsey study comparing the rates at which men and women climb the ladder in banking and consumer finance. While 51 percent of entry level banking and consumer finance employees are women, only 26 percent of the industry’s C Suite are occupied by women.4 Meanwhile, women have obtained bachelor’s degrees at higher rates than men since the early 1980s5 though Glassdoor reports that men are taking 61.5 percent of degrees in finance.6 Portfolio Management is particularly barren of women, with Morningstar finding that in the US, the ratio of male to female fund managers is 9 to 1.7 And despite the number of female portfolio managers staying pretty much flat since 2000, it appears as though positions for male portfolio managers have grown somewhere around 55 percent over the past twenty years.

These disturbing numbers hold true in my experience. I was recently included among Citywire’s top Portfolio Managers for my fund’s category, where only two women made the top fifty and only nine women rounded out the top 100. I guess the silver lining here is supposed to be that Morningstar’s study has already ruled out that the lack of gender diversity among fund managers has nothing to do with issues of poor performance.

Looking around and seeing very few other women is something I also experienced as an undergraduate majoring in computer science. I was drawn to computers quite young: my family had a Commodore 64 and then later, a Macintosh to share among five siblings. (Side note: is there anything more iconic than the “1984” Macintosh commercial, with a strong female athlete running to free the drones and destroy Big Brother?)

Our family had a guide the size of a thick phonebook of BASIC computer games that we could try our hand at programming, and there was something that lit me up about getting the games to work: if you typed in the language correctly, the computer would respond – and you could play. But outside of my family home, as an adolescent and young teen in the 1980s, I noticed it was mostly boys who were spending their free time among computers. Boys appeared to be much more motivated to learn how to break down and set up computer networks in order to play games than the girls I knew, and in this act of play, it was the boys who became more comfortable, more experienced, and then later more dominant. By the time we were college age, that comfort – or lack of intimidation – translated into an instinctive grasp of computer science. The games the boys had played as children parlayed into serious application.

I think that play and gamification are critical for making potentially challenging subjects fun instead of overwhelming. Beyond computer science, finance was another natural call for me – largely because I saw both of my parents doing it, and I didn’t grow up with any reticence or self-consciousness around investing because I’d been playing at investing with my parents for my whole life. The important work of mentoring and promoting women early in their careers to help them rise through the ranks in this industry cannot be overstated, but I also want to focus on starting the C-Suite pipeline even earlier, when kids are still just playing. How can we purposefully grow future female finance CEOs, when it’s so unusual to have a mother as interested in investing as mine was? Much has been said about the need to include personal finance among high school curriculum, but what about classes that teach about the power of money around the time elementary students first learn to count money?

Junior Achievement and Girls Who Invest each have programs that have been successful in encouraging financial literacy among youth, but if we wish to see more women in finance, it’s up to us as role models to volunteer in schools and other youth organizations to encourage play from an early age. We can also help to teach little girls the power of money by linking it to achieving better environmental and social outcomes; after all, as values-based, sustainable, and impact investors know, money is often the key to making real change in this world.

 

Article by Jane Carten, President and Director, Saturna Capital and Portfolio Manager of the Saturna Sustainable Equity Fund .

Jane Carten joined Saturna Capital in June 1997. Ms. Carten graduated from Western Washington University with an MBA and undergraduate degree in Computer Science and Business. As President, Jane oversees Saturna’s daily operations and directs Saturna’s internal and external information systems, managing the technology and marketing activities.

Ms. Carten also directs Saturna’s continuing education program and the philanthropic efforts of the firm. Also she currently serves on the ICI Board of Governors and as Chair of ICI’s Small Funds Committee, on the SEC’s Asset Management Advisory Committee, and on the Board of the Whatcom Business Alliance. She is active in the Bellingham Bay Rotary, is a member of the Young Presidents’ Organization, and is a former member of the Whatcom Museum Children’s Advisory Board. She is a founder and former director of the nonprofit OpenAccess Internet Services and is a Bellingham Sister Cities member and contributor. She enjoys her family, cooking, and wildlife, as well as international travel and fine and theatre arts.

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