Transparent promotion frameworks vital in financial services
A global investment management firm executive has called for standardised promotion policies to close the “gendered promotion gap”.
Ahead of the Women in Finance Summit 2024, Cassandra Crowe, CFA and vice president at T. Rowe Price Group, Inc. and T. Rowe Price Australia Limited, said people identifying as female and employed in financial services are significantly less likely to be offered unsolicited promotion than those identifying as male.
On the other hand, when roles are advertised, women and men apply for them at an equal rate, and women are successfully promoted, she pointed out.
“I think this highlights a systemic issue and calls for a more consistent promotions framework,” Crowe told Money Management.
“A number of promotions in our industry are not advertised. They’re going through an unsolicited program. We found that men were receiving more of those unsolicited promotions.”
Her comments are based on a study released in June this year, which was funded by a gender diversity grant from the Australian National University College of Business and Economics and conducted in partnership with CFA Institute. The study was led by Dr Laura Ryan, head of research at Ardea Investment Management, co-authored by Crowe, and is based on a 2019 survey of more than 400 Australian financial services employees.
Implementing transparent promotion frameworks with clear processes, requirements and job descriptions could lead to more inclusive and diverse leadership, Crowe argued.
“By seeing proven results, we will ultimately change culture. I think that’s beneficial for all aspects of inclusion,” she said.
One of the benefits could include closing the gender pay gap and superannuation and retirement gap, Crowe said.
“The industry needs to make sure that we have fair promotions processes because we know that ambition doesn’t discriminate,” she said.
“Women and men are keen to progress, but we need to enable that right from the top.”
In her panel session at the upcoming Women in Finance Summit 2024, Crowe will share insights on the impact of diverse teams on innovation and market competitiveness, and how organisations can create equitable opportunities for all employees.
How diversity boosts company performance
Embedding a culture of diversity, equity and inclusion (DEI) is also critical for financial performance and overall growth within organisations, Crowe said.
“We need to remind organisations that diversity, equity and inclusion are core to their purpose and business. It is our work. We cannot separate the two,” she said.
A 2017 study by decision intelligence platform Cloverpop revealed that inclusive decision-making drives better company performance and gives a decisive competitive advantage. It leads to better business decisions up to 87 per cent of the time.
The study – titled Hacking Diversity with Inclusive Decision-Making – was based on 566 real business decisions made by 184 business teams in a wide variety of companies from July 2015 through June 2017.
It showed that inclusive business teams drive decision-making twice as fast with half the meetings, while decision outcomes can improve by 60 per cent.
The next step is to measure DEI outcomes by collecting and understanding the data and tracking progress over the long term to determine whether it has changed the company’s culture, according to Crowe.
For example, as part of the T. Rowe Price DEI objective, all employees must demonstrate in their KPI how they have contributed to a more inclusive outcome within their firm.
“This measure is definitely a step in the right direction,” Crowe said.
“Having to demonstrate your contribution regardless of your role, seniority, or geographic location brings it home.”
The investment manager also measures representation throughout the talent cycle, and tracks data across recruitment, promotions and exits/turnover.
Crowe concluded by urging organisations to sponsor diverse employees who challenge traditional ways of thinking and bring new ideas.
To hear more from Cassandra Crowe on how diversity and inclusions and financial performance are interconnected, come along to the Women in Finance Summit 2024.
It will be held on Friday, 15 November, at the Hyatt Regency, Sydney.
Click here to book tickets and don’t miss out!
For further information, including agenda and speakers, click here.
This summit is produced by Captivate Events. If you need help planning your next event, email director Jim Hall at [email protected]
AUTHOR
Malavika Santhebennur
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