Women and minorities deserve the same shot at mediocrity as all the white men who came before them
By Jennifer Saba
NEW YORK (Reuters Breakingviews) - It’s obvious that most 21st-century corporate boards and executive teams ought to be less male and white. Ditto that men and women should be paid the same for the same jobs.
Yet sometimes it seems diversity and equality have to prove themselves more effective than the status quo. In fact, the solution is simple: Identify the imbalances and gaps, close them, or expect lawmakers to step in.
A major obstacle to hiring more women and minorities at 100 global asset-management firms involved the belief that doing so would compromise returns, according to a report from New Financial released on Monday. One problem is that for every statistic showing that diversity is better — mixed-gender teams outperform all-female and all-male teams by producing three-year returns that are about four per cent and one per cent higher, respectively, according to Citywire research — there are others showing different results.
Yet if the evidence is inconclusive overall, there’s also nothing to suggest the current male-dominated approach is better. Never mind that women are handicapped to begin with: Only 10 per cent of some 16,000 asset managers in Citywire’s database were female. Like everyone else, money managers should start by rectifying that imbalance.
The same holds for salary disparity between men and women. A shareholder resolution at JPMorgan’s annual meeting this week called for disclosure of the company’s global median pay gap between the sexes. The giant lender wrote nearly 2,000 words arguing against this simple measure. It even suggested the statistic might give the company an incentive to limit entry-level job opportunities for women.
Legislation in the United Kingdom requires companies to report gender pay gaps, and it has helped shine a spotlight on the issue. Some differences may exist for valid reasons; at least they are identified and the causes explained.
In the United States, Democratic presidential candidate and Senator Kamala Harris has similarly proposed that companies employing more than 100 people should be required to report pay gaps, explain any disparity, and pay penalties if iniquities are not addressed.
At the board level, California has instituted an undemanding gender quota that also carries fines if not met. These nudges should help overcome tradition and biases like those uncovered by New Financial. After all, women and minorities deserve the same shot at mediocrity as all the white men who came before them.