When talking about her work trips to South Korea and Japan almost 20 years ago, Deborah Bannon, head of institutional sales APAC ex Japan and consultant relations, APAC at BNY Mellon Investment Management, describes that female professionals in the asset management industry were always expected to never walk ahead of their bosses who were often male, and were never invited to any post-dinner drinks.
But Bannon says conforming to the “men only” job culture is not a solution, “you don’t want to pretend that you are male, and that you are part of the boy’s club because you shouldn’t have to prove yourself that way”.
Bannon also points out that while the boy’s club culture in investment management is not as prominent as it used to be, the fear among female professionals asking for flexibility at work is still around, and it requires clear policies and support from the senior management to address the issue.
“Unless the asset management industry embraces the fact that they need to develop and retain their female talent, they’re probably going to find that they have lost 50 per cent of the workforce that could have been the future of their business,” Bannon added.
L: Lynk | D: Deborah Bannon
L: Given the investment management industry is not a popular career option among women, when and why did you decide a career on the buyside is for you? Did you picture this career path for yourself when you were young?
D: Absolutely not. For me, it was not necessarily because I wanted a career in financial services or the buyside. I started out more on the relationship side of the business, and I found my career path after I moved to Hong Kong in 1994. I was working in insurance and more on the operational, business management side. As I learnt more about the clients over time, especially in operations and due diligence in alternative investing, I realised very quickly that it was something I was interested in.
So I gave myself a nudge and told myself, “maybe being in the back-office side isn’t going to suit me. Maybe being at the frontline, being client-facing, and giving myself a platform to push harder, and find out how people make asset allocation decisions would suit me better”.
I managed to secure myself a position in a client-facing role with a boutique hedge fund that was already undergoing acquisition by a very large global asset manager. That was the time when I had a light-bulb moment — I wanted to work on the buyside, I needed to expand my knowledge base and I needed a platform to help me do that.
After joining that firm, I was fortunate enough to have a really good boss who was a fantastic mentor to me. He taught me a lot, and it wasn’t too long after that I found my confidence and got pretty good at it. I was raising money from a large array of institutional clients in markets that were hugely male-dominated across different asset classes. During that time, I realised that was the path I was going to take instead of the internal back-office path.
If you look at the breakdown of women in senior roles, they do tend to be in the support function roles such as marketing, finance or compliance. That is not to say it’s a bad thing, not every woman needs to aspire to be a portfolio manager, head of sales or CEO, but it would be nice if there were a few more of them.
L: What would be the best quality for a person to have in order to succeed in the asset management industry?
D: There are different qualities needed depending on what you may be looking to achieve. To be an asset manager, you have to be very analytical as we know women tend to display different strengths in areas of portfolio management. There are a lot of studies that conclude that men are risk-takers and women are not, and therefore portfolios managed by women outperform men’s over time. I’m not sure I necessarily believe all of that, but I think there is definitely something to be said there, which again, is why diversity is so critically important.
If you have a portfolio management team, it’s not like men are better than women or vice versa. If you have that diversity of thought and teams of people working together, and there is that balance of men and women on the team making everyday asset allocation decisions, they do outperform when compared to the less diverse ones.
I think the traits that make a good institutional salesperson in asset management are the ability to build trusting relationships and have patience, and those are two things women may tend to have a little bit more of.
L: Have you ever faced any challenges that were directed specifically at your gender?
D: Absolutely, it’s probably less so now that I am in a more senior role. But I embraced the challenge of being a woman when I decided to take that role 20 years ago, which was even more male-dominated than it is today. You certainly didn’t have senior women covering markets like Japan, South Korea, or China. There were natural biases that existed in those markets you just had to deal with as a woman.
Firstly, you had to know that there is an element of – if you go to South Korea, you may be invited to the dinner, but you wouldn’t be invited to the drinks because those guys want to go off on their own. You don’t want to pretend that you are male, and that you are part of the boy’s club because you shouldn’t have to prove yourself that way.
Another challenge is having to prove yourself to a much greater degree than men in the industry do. If you are a man and you want to sell an investment product to a client, there is often an immediate element of trust. For example, when I went to meetings with a former boss of mine who was a white man in his 50s, we would often walk into a room full of men who expected me to walk in behind my boss and not speak until I was spoken to, even though I was the one doing the presentations and had all of the technical details.
Some of these challenges come down to how much patience and perseverance you have. I’ve lost count of the number of times I am asked “when can we meet your boss”, and I turn around and say “you’re talking to her”. They almost seem surprised that they are talking to the person who would ultimately be able to negotiate with them.
L: Do you think that kind of problem still exists in markets such as South Korea and Japan?
D: I think it exists a lot less now. When I look across the industry, I see a lot more women in senior-level positions. However, there are still considerably less women than men in senior roles, so there is still imbalance. But there are many more credible women doing these types of jobs where they don’t necessarily have to act like men to be successful, and they prove themselves based on their skill sets and technical abilities.
Whether the bias is conscious or unconscious is another thing, such as the idea that if you’re a female, you may or may not be as good at maths. There’s less of that bias now, which is pleasing to see. From the observations made during my client visits across the region, the amount of women that are now in senior or decision-making roles in the industry is much higher than when I first started.
When I started out, there were very few women at the top I could aspire to become. Now, for young women who are starting out in our industry, there are a lot more role models to look up to.
L: As more women enter the buyside, how would that affect investment focus and performance?
D: There have been multiple studies out there that show diverse teams in portfolio management tend to outperform their less diverse counterparts over time.
That is true pretty much across all asset classes, so you can’t say “women portfolio managers are only good in ESG investing” or “women tend to go for a low volatility strategy because they’re more risk-averse” — that’s not true. There is enough evidence out there, including large consulting firms, asset managers, industry organisations such as CFA, that proves otherwise.
The impact on performance is definitely going to stay, and diversity and inclusion are two of the things that everyone has to address. It’s obviously not just about performance, I think the other aspect you have to take into account is unless the asset management industry embraces the fact that they need to develop and retain their female talent, they’re probably going to find that they have lost 50 per cent of the workforce that could have been the future of their business. Those people will be shuffled out of their industry because they haven’t been able to retain their female talents and promote them.
When I say promotion, I want to be clear I do not agree with having policy or practices in place that dictate you must promote a woman over a man, because again, that can easily become a tick-box exercise. The same applies to hiring policies that say we must have equal amounts of male and female applicants because that can quickly turn negative. We’ve seen that happen, and then you question whether companies are hiring the right people for the job or whether they’re just trying to tick the box.
L: What kind of policies should buyside firms implement to advance gender diversity to avoid a tick-box exercise?
D: Firms need to publish clear policies on diversity and inclusion. BNY Mellon does that because our shareholders want to know that these policies exist, they generally understand that companies with more diversity will outperform, and shareholders are interested in sustainability and outperformance. At BNY Mellon, we have an unwavering commitment to D&I all the way from the CEO and board down through the organisation.
There are obviously things like flexible working programmes, which have been around for a while and COVID-19 has certainly accelerated the prospect of flexible working. There has always been a feeling – or fear – that you are going to be judged on FaceTime and how much time you spend in the office. This includes whether you are going to leave to take care of your child from school when he or she is sick, or how much time off you should take.
I think it is very important for companies to think around their flexible working programmes – and not just for women, but for men too, to enable men to do their fair share of the work and pick up some of the load. My husband has been very good at that. When I took that step to launch my career on the buyside, he was the one who stayed home to watch over children while I went travelling. Granted, we had a helper as well – because my husband is not a very good cook and would ruin the laundry – but it helped that he could adapt to that role. My husband was able to do it because he had the flexibility of running his own business, but imagine if we could get to a point where men could still have a senior corporate role but they know their organisation embraces them having a flexible programme where if they need to take time off due to childcare issues they could do so.
The other thing I’m thinking of is clear policies on career support and promotions, recognising that the majority of women in the industry are not in senior-level positions, and introducing some type of programme that lets them know those opportunities are there for them. None of these things are easy to resolve, but there are a lot of steps companies can take to do this, and I think this would make it more attractive for women thinking about getting into the industry.
The final one is obviously the big elephant in the room, which is the gender pay gap. Unfortunately, it still exists. You asked if we had made progress in terms of things that made me uncomfortable as a woman in South Korea and Japan more than a decade ago, the one thing that hasn’t improved is the pay gap. You read every study and you see this huge, growing pay gap, especially in the asset management industry. It is one of the worst industries in terms of how a man and a woman at the same level doing the same job are compensated differently.
L: Will the lack of diversity negatively impact buyside businesses in the future?
D: If you think about E, S, and G, there are two aspects that are related to diversity. What I have seen in some of my investor bases is that they are recognising this, and spending more time thinking carefully about the companies they invest in and the asset managers they place their money with. They want more transparency, they want to be able to assess from a diversity perspective what does a board look like, what female leadership should look like, and how that impacts the sustainability of a firm.
ESG is definitely becoming a lot more mainstream, and asset consultants, big institutional clients, regulators, governments are all also thinking about issues around diversity and inclusion. When you think about what a diverse company should look like, you need to look at a lot more than just gender.
L: Given that there is not a clear set of standards for ESG reporting at the moment, do you think companies will revert to the old problems of box-ticking if they have to implement ESG or diversity-related policies?
D: There are certain countries where you would question how much of it is them just ticking that box to appease the reporting requirements, and how much of it is them ensuring there is diversity in the true sense.
Getting back to my point, I think people are questioning a lot more now. Not just around how many women and men, or how many ethnic minorities you have. Not just around the numbers, but drilling down into what is the accountability to these people, what decisions can they make — because having a woman on the board frankly can get them neither here nor there if that woman hasn’t got a voice — so what are your inclusion policies? What are your KPIs around your diversity and inclusion policies? How do you measure success? I think these are the types of questions people are asking more about now.
The question they used to ask, which was very easy to get away with, was “how many women did you have on your board?”. And now they’re asking a lot more valuable questions that would help them better assess the quality around their diversity and inclusion and broader ESG policies and how it is implemented.
This article was originally published on Lynk Insights.
Buyside Power Women is Lynk’s latest interview series that features conversations with female leaders and male allies on the buyside to increase visibility of women in the industry. The series covers the career journeys of female leaders in different regions, and how advocacy for diversity could influence future capital allocation.
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