Why are there so few women in finance and other fields, and how should this best be addressed? The Goldman Sachs class-action gender discrimination lawsuit, filed by three former female employees, is raising these questions amid a larger debate. For many, the firm represents the ultimate in a Wall Street boys club mentality--a place where go-getter networking ability, stereotypically male aggression, and an appreciation of scotch, sports, and sheer stockings might pay off. At the same time, Goldman has been at the forefront of the effort to diversify Wall Street, particularly with regard to gender.
In the lawsuit in question, the women claim they were systematically denied equal pay or certain assignments, and occasionally found themselves harassed. What's to blame, and how to address such problems? Former and current Goldman women are joining business bloggers in the debate.
'Goldman Has Had Long-Standing Problems with Women,' writes former Goldmanite and popular finance blogger Yves Smith, "and the lawsuit's charges are far more damaging and potentially costly than the commentary indicates." She recalls her experience being propositioned by a coworker, and says that "while the firm now has policies on dating, the area where the rubber really hits the road, pay and promotion, appears to be as retrograde as ever." She rejects the "tendency to see people like the plaintiffs in this suit as sore losers," pointing out that the supposed meritocracy in these firms is a shaky business, with "performance appraisal" a notoriously unreliable means of establishing a true meritocracy. Here's the money quote from her post:
The idea that Goldman, and Wall Street generally, which for decades have had their pick of top business and law school graduates, can't find women of the same caliber as men simply doesn’t pass the common sense test. But "diversity" has the effect of shifting attention away from the fact that companies may be inbred. Conservatism and a common preference to hire in your own image leads many firms to stick with their tried-and true profile, which in most cases is Caucasian and male.
- People Hire and Promote People Who Look Like Them Courtney Comstock at Business Insider builds on Smith's observation, calling the practice of hiring people similar to oneself "narcissism." So how do you deal with a world where we are all narcissists? The obvious solution to Comstock is "requiring every company to employ at least some percentage of women to work in the upper ranks," to fix the problem of both hiring and role models.
Sure, women will have to work harder to prove that they didn't just get handed the job because they're handicapped. And based on the gender discrimination lawsuits we've seen, they'll probably continue to be required to meet higher standards. Sounds good to us.
- Intent Is a 'Tough Sell,' muses Nomi Prins The Daily Beast. "Wall Street has a hard-fast unwritten rule about compensation: Don't ask, don't tell," but "to the extent there can be a full disclosure of pay and promotion information and gender percentage, it will show a general bias." It's harder to prove intent. Prins recalls that, when she herself left Goldman, it was partly because she knew "exactly what [she] need[ed] to do to be successful ... and [had] no desire to do it" and partly because she "was sick of haggling with the men in [her] chain and the soulless pursuit of promotion and pay." But, she adds: "Those who stick around this male-dominated culture ... deserve to be paid fully for it."
- Goldman Is Already Doing a Lot to Encourage Women, protests former Goldman partner Jacki Zehner at Bloomberg. In fact, "Goldman's efforts to hire, retain and promote women were the most comprehensive on Wall Street," and "when a decade of such initiatives failed to produce the intended results, Goldman started a task force to focus on the issue, engaging people throughout the firm as well as outside consultants." She thinks she, personally, "was promoted because of both [her] profitability and [her] commitment to teamwork," while being a woman "also helped." She "always had a person to talk to" if harassment became an issue. Though Goldman's statistics on women in leadership aren't what some might like, they're "among the best of any major Wall Street firm." She encourages readers to peruse a report by The National Council for Research on Women on how best to solve gender imbalance problems in finance, but thinks "cases like this may just motivate managers to hire, mentor or promote more men instead of the equally or more talented women because men are easier to fire if they are poor performers."
- How to Get More Women in Finance The Women in Fund Management report by the National Council for Research on Women identifies a couple of problems, including the notoriously "narrow pipeline," with low female enrollment rate in MBA programs and low female interest in the field in general. There's also a problem with women finding it--partly, perhaps, because of stereotypes--difficult to attract capital. Then there's the lack of existing networks in a field where networking is crucial. Here's some of their advice for balancing out the field: "adopt a critical mass principle" in order to get women into key positions, "Put money where it matters. ... Require greater transparency and accountability. ... Build and expand professional networks ... Provide mentoring opportunities at all levels. ... Highlight the achievements of successful women in finance to provide role models for other women. ... Change the climate and culture."
As the testimonies from others weighing in on the debate would seem to show, this is easier said than done.