Unconscious bias and sexism still plague investment industry

Investment company directors share their experiences

Despite progress in the number of women on investment company boards, there remain instances of unconscious bias and sexism.

Mary Ann Sieghart is director of a number of investment companies and author of The Authority Gap, a book on gender bias in everyday life. She believes there is still a lot of unconscious bias among some men in asset management.

“They assume other men are more competent than women and are genuinely surprised when they see a woman performing as well as, or better than, her male colleagues,” she said.

“On an investment trust board, I once mentioned if we ended up recruiting another female director (obviously on merit), we’d be one of the few majority-female boards, which would make a good story. ‘It might make a story, but it wouldn’t be a good one,’ said one of my fellow male directors. ‘I mean, what would the investors think?’

“This man had been serving on a board with a highly respected and competent female asset manager, who ended up chairing a huge investment trust. Yet he still clearly thought women were less financially competent than men.”

Sarah Bates, an experienced chair and director, recounted another instance of bias: “I remember an AIC dinner some years ago, when someone was getting very agitated about the need to appoint ‘the best people’. I looked around the room and made the point that the distribution of the audience was a bit unlikely to represent ‘the best people’.

“Statistically, if we are all white, middle-class, straight women from Manchester (like me) we won’t have the best people either. In any case, the concept’s a bit unreliable. The best person for a board is the person who makes the board as a whole perform better.”

A woman director who has held a number of directorships added: “In some ways, yes it’s getting better. There are more women on boards. I have served on three boards where there was a majority of women. I keep being told it’s difficult to find women with the right experience, and in some parts of our industry, that may at first glance appear to have some merit to it. But we need to reach out and be really careful about what experience is actually necessary and what is just a bit conventional.

“In many ways, though, it hasn’t moved as fast as it should have done. I was told last year that the board of something I was applying to had already found a woman in Guernsey, so they didn’t need another…”

As well as gender bias, overtly sexist behaviour still occasionally occurs. A senior director witnessed a male chair putting his hand across the mouth of a female director in a board meeting because he perceived she was talking too much. The fact that women are wrongly perceived as talking more in meetings is addressed in Sieghart’s book, where she explains that in reality women speak much less than men in meetings but are unfairly perceived as domineering.

Looking back to when I started my career 25 years ago and comparing it to now, it’s clear a transformation of women’s representation in this industry has taken place. The investment company industry is renowned for its ability to adapt and change to meet investors’ demands and I’m confident this will work in its favour when it comes to diversity. Yes, there’s so much more to do, but the momentum is unstoppable and the Financial Conduct Authority in the UK is now behind it too. This makes me confident that in another 25 years’ time the industry will again be transformed.

This is adapted from an extract in The Investment Trusts Handbook 2023.