“Nothing can be more absurd than the practice that prevails in our country of men and women not following the same pursuits with all their strengths and with one mind, for thus, the state instead of being whole is reduced to half.”
Although not quite a feminist by today’s standards, Plato’s views on gender equality, as evidenced by this quote from The Laws published in 348 BC, are progressive when taken in context and considering the times in which they were written. My interpretation of this is that a ‘pursuit’ in which one gender is more involved than another is one which will never reach its true potential. When senior management within the Compliance profession in the US is looked at through this prism, how does it fare? If alive today (and writing about compliance, bear with me here), would Plato feel compelled to come to the same conclusion as he did regarding his fellow Greeks nearly two and a half thousand years ago? Before I expound on this question any further, it is important for me to confess that, as a male quadragenarian, it is not unreasonable to assume that I may possess some unconscious biases. Given that they would by definition be outside my conscious awareness if indeed they exist at all, I can only ask that you keep this in mind!
Firstly, we should take a look at how female leadership more generally is viewed today as COVID-19 has brought it to the fore in recent months. A trend which has come to the attention of academics and reporters1 alike is that countries led by women have by and large had considerably more success in combatting the coronavirus than those steered by their male counterparts. Taiwan, Germany, Hong Kong, New Zealand, Finland and Denmark are the examples typically touted. Why is this you might ask? It is difficult to be certain but the female leaders of these countries have displayed a leadership style which is not consistent with the traditional concept of a ‘leader’ – one who projects an aura of invulnerability, omniscience and fearlessness whilst acting with aggression and power in times of crisis. What we have seen instead from these female leaders is a willingness to listen, display empathy and show vulnerability whist simultaneously retaining the ability to make tough, quick decisions when the need arises. This leadership style is not exclusive to women but is possibly one to which women are more adept. Are women getting the opportunity to apply their leadership style in the world of business and, more specifically, compliance?
According to an August 20192 by Catalyst (an advocacy group working to promote gender diversity in the workplace), 29% of senior management roles globally were held by women in 2019, which was the highest number ever on record. The same publication quotes statistics published by the Bureau of Labor Statistics3 showing that in the USA in 2019, women represented 46.9% of the labor force and 40% of management occupations. However, these same statistics show that, of the management occupations listed, women made up the highest share in human resources (74.7%) and medical and health services (69.7%). So, what can we conclude here? It would appear that, although women are increasingly represented at a senior management level more generally, this success is more concentrated in certain careers than others. It would also appear, according to Catalyst, that the further up the corporate ladder you go in a S&P 500 Company, the fewer the women with only 5% of S&P 500 CEOs being female. Plato would not be impressed.
So, how does Compliance fare? Interestingly, the same statistical dataset published by the Bureau of Labor Statistics shows that women made up 59.5% of all compliance officers in the US in 2019. According to Law.com4 “US Labor Department statistics over the past 20 years show that compliance is one of the fastest-growing professions for women.” Typical compliance conference attendance according to this same source is estimated at 70% female but conversely it is estimated that the majority of chief compliance officers (“CCOs”) are male. A study completed by the Rothstein Kass Institute and quoted in a 2014 Quartz publication5 showed that women held 34% of C-level hedge fund compliance positions and 32% of C-level compliance positions but that the percentage of women CEOs and CIOs averaged less than 20% within the firms polled. This would appear to also tally with the conclusions reached by both Law.com and Catalyst where, although the majority of compliance officers are female, the higher up you go both within compliance and an organization more generally, the more male dominated it becomes. So, to summarize, the majority of compliance officers are female whilst the majority of CCOs are male and the majority of business leaders (CEO, CIO etc.) are also male. However, this is where Mark Twain’s belief that “Facts are stubborn things, but statistics are pliable” comes into play. The compliance profession is not typically given a ‘seat at the table’ and involved in the decision making or strategic planning of an organization. This makes it difficult to move from compliance to a leadership role within the wider organization, and that difficulty is gender agnostic. The same can be said of that other female dominated profession, Human Resources. Simply put, historically these have not shown themselves to be optimum professions if ultimately a CEO or Board-level position is desired, irrespective of gender, and these professions consist of more women than men.
The above musing notwithstanding, this does not explain the lack of female CCOs. Within the aforementioned Law.com article, a theory is given whereby that companies typically look for prosecutorial or law enforcement experience when on the hunt for a new CCO and that those areas are typically male dominated. So, we’re back to the same stumbling block – as female dominated compliance talent pools are not typically tapped for CEO roles, conversely male dominated prosecutorial/law enforcement talent pools are typically tapped for CCO roles. I’m not a gambling man but, based on this, the odds of a woman attaining CCO and/or CEO status do not appear to be stacked in her favor. There are of course plenty of exceptions out there and that Catalyst statistic showing us that there are more women in senior management positions now (29%) than ever before gives cause for optimism, it’s not all doom and gloom!
Statistics, surveys and analyses aside, what of my own experience? Much of my almost 20 year (gulp) career has been in compliance or the compliance-related area of depositary services (as required per UCITS and AIFMD). When I think back to my experiences with senior management, I have been fortunate enough overall to have dealt with an equal mix of women and men. I must also confess that at no point was a gender-specific leadership style or trait so obvious to me that I felt certain positions were better suited to women over men and vice versa. However, I am now in my 13th year of experience at a hiring level and when I look at the many hires I have made over the years, I have hired more women than men. This was certainly never a decision I made at a conscious level with my only conscious decision being to select the best candidate for the job. Perhaps, going back to our 59.5% statistic, the talent pools I was tapping into were dominated by women. Or, the best candidate for the job out of the candidates interviewed being female was a pure coincidence. Or, at a subconscious level I had picked up on a different working and/or leadership style (depending on the role) previously displayed by my female peers and superiors which I believed was more suited to the role, all things being equal in respect of the necessary qualifications and experience. Furthermore, I would never have been the sole decision maker and a consensus amongst those of us conducting the interviews would have been necessary. Although I feel this last possibility to be unlikely and that the real answer is in the 59.5% statistic, it does sometimes give me pause for thought. It also brings me back to my earlier point on how countries led by women appear to be dealing with COVID-19 more successfully. That success is all the more interesting considering that we live at a time where only 7% of the world’s government leadership roles are actually held by women6.
Diversity within the senior management echelons of not just compliance, but any profession within the business world is something we need to continue to strive for and work towards. And once we get there, perhaps we should let more women take the reins? What if Jack Nicholson’s character of Melvin Udall, a writer, in 1997’s As Good As It Gets was right? When asked how he wrote women so well, he responded “I think of a man, and I take away reason and accountability.”
1 “Why Have Women Leaders Excelled at Fighting the Coronavirus Crisis?”, Forbes, Stephanie Denning, April 26, 2020
“Why Are Women-Led Nations Doing Better With Covid-19?” The New York Times, Amanda Taub, May 18, 2020
2 Catalyst, Quick Take: Women in Management (August 7, 2019)
3 “Table 11: Employed Persons by Detailed Occupation, Sex, Race, Hispanic or Latino Ethnicity, 2017,” Bureau of Labor Statistics, Current Population Survey, Household Data Annual Averages (2019).
4 ”Regard for the Rules: Women Are Dominating in Complex Compliance Roles”, Law.com, Sue Reisinger, February 03, 2020
5 “60% of compliance officers are women—and that may be a bad thing”, Quartz, Shanti Atkins, March 28, 2014
6 “Women leaders shine during COVID-19 pandemic” – Stanford Medicine, Tracie White, May 12, 2020