'Gender punishment gap' flourishes in the finance industry
- Women caught in misconduct while employed at financial firms were 20% more likely to be fired for their offenses than were their male counterparts, according to research co-authored by academics at Harvard Business School, University of Texas-Austin and Stanford Graduate School of Business. Following termination, women were also 30% less likely to find new employment in the financial services industry.
- These findings are evidence of a "gender punishment gap" in the industry, said the authors, who analyzed misconduct cases at firms monitored by the Financial Industry Regulatory Authority. Firms with the largest gender punishment gaps included Well Fargo, A. G. Edwards & Sons, SunTrust Investment Services, Allstate Financial Services and Morgan Stanley, wrote Harvard Business School in a summary of the research.
- Despite facing harsher repercussions, women typically engage in misconduct that is 20% less costly and are less likely to repeat their offenses. The research showed that women and men were punished with equal severity at firms with a greater percentage of women in branch manager or executive roles.
The discovery of a gender punishment gap affirms what other studies have shown about women working in finance. Earlier this year, a PwC poll of women in finance found that more than half of its respondents thought their diversity status was a barrier to their professional advancement, and 43% said they experienced bullying, insults and inappropriate language at work. These findings were far greater than for women in other industries.
Promoting more women to leadership roles could help correct the imbalance, but such initiatives can make for an uphill climb. This year saw a 25% decrease in female CEOs at Fortune 500 companies, with still fewer women of color represented among those who remain. Even in the wake of the #MeToo movement, Women face workplace harassment and high rates of retaliation for reporting it. Despite frequently performing a greater portion of labor than their male counterparts do, women are often underpaid when employers are not proactive about correcting the gender pay gap.
Instituting leadership development programs could help employers promote more women and increase gender equity — as can simply being cognizant of gender biases. "It's not so obvious from our findings that managers are necessarily aware of this bias," Mark Egan, author of the study and assistant professor of business administration, told Harvard Business School. "Just seeing this information and being aware of the bias could help both men and women act more fairly."