Women take center stage at inaugural P&I conference

Pensions & Investments hosted a conference in Chicago on Sept. 14 following its inaugural Influential Women in Institutional Investing program that put the spotlight on women who are having an outsized impact on the professional investment and retirement market as well as driving change in the industry.

The awards ceremony and half-day conference featured many honorees in panel discussions talking about their own experiences, the challenges women face in the institutional investing industry and how improvements can be made.

When Sallie Krawcheck, the former CEO of Merrill Lynch and chief financial officer of Citi, launched her own company in 2014, the path of entrepreneurship was harder than she anticipated it would be.

"Everything about it is hard," Krawcheck said during her keynote address. "Every single thing."

But Krawcheck has pushed through the difficulties as founder and CEO of Ellevest, a woman-focused investment platform and financial literacy program, because she firmly believes in helping women make more money. Krawcheck was inspired to start Ellevest after seeing how women were impacted by male dominance in the financial industry — 98% of mutual funds, Krawcheck said, are run by men.

"Could it be, with those overwhelming numbers, men built a business for themselves?" Krawcheck asked. "I'm not saying they meant to but maybe they did. Maybe a business that was focused on trading … bitcoin, talking in jargon, watching Jim Cramer, reading Barron's — maybe those are things that just appeal more to men."

In addition to the factors keeping women out of investing, Krawcheck also discussed the difficulties women who work in the industry face, including what she called "the very fine line of likability and bitchiness — which I have found, in my career, changes from boss to boss."

Krawcheck called on women to support each other in the workplace — something she says men have been doing since the beginning of the industry.

"Men are playing the game as a team sport," Krawcheck said. "Think about the mediocre guy you know who got bounced out of your company and got picked up right away … (women) on the other hand, have been socialized to play as individuals."

Getting to the top is a journey that requires an understanding of when you have to pivot, said Angela Miller-May, chief investment officer of the $51.8 billion Illinois Municipal Retirement Fund, Oak Brook.

"Sometimes it's going to be in a straight line, sometimes it may be a lateral move, sometimes it may feel like a move you feel is backwards," Miller-May said.

"I've always wanted to be a value to someone, and every time I was elevated to a new position or a new role, it was because at some point in time I solved a problem," she said. "I did something for someone else that I didn't need to do. I was willing to go above and beyond, and people remember that."

Saira Malik, CIO of Nuveen, said she was pulled into a meeting as a young analyst by a person who said, "We hire people like her because she's hungry." She said another time, she was flying back from a conference and seated in first class. When she got up to use the bathroom, a flight attendant asked her, "Are you in coach? Why are you using the first-class bathroom?"

She said she now channels those misguided assumptions into thinking about, "How do we make change in this industry?"

One way? Role models.

"Having more role models in this industry will make us a more diverse industry," she said. "When we don't see people who look like us, it's hard to bring them up."

Another way? A focus on educational pipelines — not just with more ethnic backgrounds but with more schools.

"Going against the grain is how we generate most of our alpha," she said.

She shared her three lessons in overcoming obstacles:

• Invest in ourselves because often, other people aren't.
• Find the right mentors and sponsors.
• Erase negative data points around ourselves and others.

Yie-Hsin Hung, president and CEO of State Street Global Advisors, said there are challenges in recruiting women for the money management industry.

"We help millions of people to realize their financial visions," Hung said. "At the same time, there's an element of what we do that is highly technical, highly complex and it can be off-putting."

"What we need to do as an industry is really nailing the basics. Why do we do what we do? I think it's been the best of intentions over the X number of decades, but it's not enough," Hung said.

Hung said SSGA's policy is not only to bring in as diverse a slate of candidates as possible by posting every single position publicly, but also by establishing a diverse slate of interviewers who all conduct the interview in a panel to take any bias out of the process.

In a panel discussion on "What do the facts say about closing the gender gap?" Michele Shauf, global head of education and experiences at Nasdaq eVestment, introduced eVestment data developed with the Institutional Investing Diversity Cooperative over the past 10 quarters provided by hundreds of managers representing more than 6,000 strategies. The numbers show across the board that the asset management workforce is 64.8% male and 34.1% female, while boards of directors are 77.4% male and 22.9% female.

"We've been collecting this data for 10 quarters and what's really interesting is how stable it is," Shauf said.

Speakers also discussed the importance of mentorship and sponsorship helping close not only the gender gap in money management, but the racial gap as well.

"Mentors get you in the building and keep you there," said Christine Phillpotts, portfolio manager and senior research analyst with Ariel Investments, "and sponsors get you on the express elevator. Sponsors are the ones who pound the table for you when you're not there."

Shundrawn Thomas, founder and managing partner at The Copia Group, said everyone needs the benefit of mentors and sponsors.

"It's not that all your mentors need to look like you or your sponsors do," Thomas said.

"Where the mentors and sponsors come in is like, 'Who is going to be in that room? Who is going to be waving that flag? Who is going to understand your unique talents?'"

One important distinction, he said, is that mentors and sponsors are not just doing someone a favor.

"We are benefiting and making the organization better," he said.

Though the gender gap in the investment industry has narrowed in recent years, the industry is still overwhelmingly dominated by men. Some high-level women in the industry are working to change that.

Kathryn Sayko, chief diversity, equity and inclusion officer at PGIM, said on a panel that one thing that could help draw more women to the industry is an increased focus on impact investing — "how we use our capital to influence more fairness in society," as she described it — which she said might help provide younger female employees with a sense of purpose.

"Something that we need to do collectively is do a much better job (highlighting the) connection between our investment outcomes and the financial dignity that those outcomes create for stakeholders, for teachers and police, and retirees … because that's the stuff that gets me up in the morning," Sayko said. "That's the stuff that will motivate people to seriously consider joining our industry."

Laura Pollock, founding partner at Third Street Partners, added that employers should also know that women and men interview differently, and firms hoping to recruit women should tailor the recruitment process to better fit what women are looking for.

"To recruit a woman is very different than recruiting a man," Pollock said, adding that women are often "incredibly loyal" to their current jobs, are reluctant to move, and take more time to consider offers than their male counterparts. "You have to recruit them like top professional athletes," she said. "They are not going to come to you."

But it's not just about drawing women to the industry, the speakers said. The real issue is keeping them in their jobs — and helping them climb upward — once they reach the midstages of their careers.

Something Sayko said could help was teaching managers "inclusive behaviors."

"If folks don't feel included and feel they don't belong, you're not going to get the best out of them," Sayko said.

Pollock said other things — like globally consistent maternity leave policies and forced paternity leave for men, as well as keeping a hybrid work schedule — can make for a more inclusive and sustainable workplace for women.

The panelists are also considering the needs of future employees in Gen Z and Gen Alpha.

Nancy Sims, president and CEO at the Toigo Foundation, said younger employees will be focused on opportunities for advancement and want to see a clear path to professional development. They are also more focused on a prospective company's mission and values, and will find sponsorship — not just mentorship — "critical."

Margaret Franklin, president and CEO of the CFA Institute, said research has shown that firms that were more mature along the path of their diversity, equity and inclusion efforts responded much better to the COVID-19 pandemic.

"That spoke to the fact that their DEI practices created more resiliency and more trust among their teams," Franklin said. "So they were able to responsibly, agilely and effectively deal with COVID."

Franklin spoke about how the impact of newly announced "return to work" policies is disproportionately affecting women.

"Caregiving falls more to women and not being in the office is a challenge," Franklin said. "Visibility is for sure where leaders are going to look at, and we have the five of the biggest firms saying we are going to be (requiring employees) in the office five days of the week."