The fourth London-based GTR Women in Trade Finance event, held in November, brought together a diverse group of speakers and participants to discuss what more needs to be done to improve the gender balance in the trade finance industry. Here are the top takeaways from the conversation.
Women are under-represented in trade finance — and this could hurt the industry
Although much of the narrative in recent years has focused on closing the gender pay gap by boosting the numbers of women in higher-paid roles, this is far from the main benefit of increasing women’s representation in trade finance.
“Trade finance plays a very important role in the global economy. Because of the importance to the economy and the fact that a large proportion of the people served by the industry are women, this is a reason, beyond diversity, for getting women into trade finance,” said Grace Lordan, associate professor in behavioural science at the London School of Economics and keynote speaker at the event.
The trade finance industry needs to learn to harness gender differences
According to Lordan, women on average have higher levels of risk aversion than men, and tend to be more co-operative, less competitive and more intrinsically motivated. Across the world, firms place value on competition and other stereotypically masculine traits, and many women are counselled to change their behaviour in order to get ahead. “There is a bravado among male colleagues, and if you don’t fit into that, you might not necessarily fit into an environment,” explained Lordan. She countered that the trade finance industry needs to consider the value of stereotypically feminine traits. “I am not sure there are many occupations aside from maybe professional rugby or tennis where we should be really rewarding a competitive nature,” she says. “A lot of the work we are doing now in trade finance does require co-operation and individuals to work together.”
Women are less likely to choose a career in trade finance and those who do have worse outcomes
A confluence of factors discourage women from pursuing roles in trade finance. Some are common to the wider financial services industry, such as statistical discrimination and stereotype bias. “Women do take more time out of the labour force,” said Lordan. “So if there is a belief that time out of the labour force is disruptive, then a woman is less likely to get a job, get promoted, get the project, simply because the average of her group is being applied to her.” She added that stereotypes assigned to women as a group carry through from the group level to the individual and affect outcomes, although she conceded that stereotypical attitudes around women in the labour force are becoming less pronounced.
Inflexible policies remain a barrier to equality
In recent years, enormous progress has been made around implementing gender-sensitive policies in financial institutions, but more still needs to be done to take into account women’s realities. “Within some firms in trade finance, there seems to be a sentiment that individuals get rewarded more for each additional hour worked after the clock stops at five o’clock. We need to get very specific about what equal pay means,” said Lordan. “Do you mean equal pay per hour worked, equal pay per output; do you think that if somebody takes some time off that they should come back in exactly the same place that they were? Do they need extra training? Do you think they should be accelerated once they come back?” She called for firms to take a good look at how they reward employees, by moving towards linear returns to output rather than to hours. She also emphasised a real need for firms to be clear on their goals with respect to equality.
For Francisca Michielsen, divisional director for international working capital at Santander’s corporate and commercial banking division and one of the event’s panellists, policy change comes not only from a focus on women, but from facilitating mindset change among men. “Where I think we need to be better as organisations is to facilitate men more to step away from the traditional role model and encourage them to take paternity leave, for example,” she said.
There are innovative approaches to closing the gender gap
Although it’s tempting for firms to put in place education, training and other interventions in an attempt to close the gender gap, simpler initiatives may bear more fruit. Michielsen outlined how Santander has started focussing its trade finance recruiting beyond the traditional specialised skill sets which are still overwhelmingly dominated by men, to a range of soft skills. “We have become more flexible to hiring from different fields, because if you’ve demonstrated that you are capable in one skill set, you should also be able to learn another one,” she said. Since the bank merged supply chain finance, invoice finance and trade finance into one team at the beginning of last year, this approach has been put to the test. “I’m trying to grow my team, which is difficult because there are not many banks that have one team of originators being asked to master all those three different skill sets. It forces me to look much more at the ambition to learn new things. To be a good originator, you need that soft skill set. And my view is that women are very good at it,” she added.
Her fellow panellist, Davinder Mann, director of UK Export Finance’s legal and compliance group, echoed this point. “In UK Export Finance, we have discovered that what you have to do is get capable people in and train them, and that cuts across genders and different areas. And it really does work. We will take in a professional with, say, asset finance experience, and we will train them across the entire spectrum including public law. We have intelligent people who are bright and capable and have a transferable skill set.” In order for this approach to work, though, having the right kind of managers who are able to nurture and train talent is crucial.
Meanwhile, some firms are experimenting with blinded recruitment, whereby gender identifiers such as candidate names are stripped from CVs in order to remove the possibility of unconscious hiring biases. However, Santander is trying something different. “What we try to do is to go into interview rounds with equal numbers of men and women. If you take those names away it is difficult to achieve that. The reason we aim for 50:50 to go to interview is really to make sure that we have more women in trade and in other positions in the finance industry,” Michielsen explained.
Diversity pays dividends
On a basic level, customers relate better to individuals who resemble them, and a team with a range of perspectives, backgrounds and skill sets will likely be more successful than one which is homogenous. Speaking about the findings from Santander’s Trade Barometer, which surveys British businesses, Julia Ruotsi, the bank’s international trade and investment policy specialist, highlighted a series of specific positive characteristics for female managers and leaders. “If we look at the bucket of domestic businesses, women show more ambition towards going international. Women are also more likely to seek external advice in their ambitions to grow in global markets. And women are most focused on the people side of the business. If we look at plans to invest, we see that women are more likely to have plans to hire new staff. We find that women have strong aspirations towards expanding internationally, and if there were to be a support structure towards more women in these types of positions in large corporations in particular, we could find more women in exports, but also a positive impact on the UK economy via an increase in the number of businesses that are actually exporting.”
As countries adopt gender-responsive trade policies, the industry needs to keep up
At the Commonwealth heads of government meetings last year, UK secretary of state Liam Fox underscored the UK’s commitment to using trade policy as a lever for gender equality.
“We have been looking at the best strategies domestically and internationally on reflecting gender in evidence-based policy-making,” said Susan Barton, head of trade policy and gender strategy at the UK’s department for international trade. So far, Canada has emerged as a role model, with gender chapters in its free trade agreements with both Chile and Israel.
But as trade agreements increasingly become the focus of attention around the world, so too must their implications on women. “Unfortunately in a lot of areas we are looking at a double-edged sword,” said Lordan. “Trade liberalisation does tend to provide employment for women. At the same time, we see that in certain cases the lower wages that women receive constitute a competitive advantage. There are problems with the quality of employment.”
Gender balance needs to come from the top
Concerted efforts in changing policies at the firm level can only go so far. Adrienne Roberts, a senior lecturer at the University of Manchester’s department of politics, pointed to the pressing need for collaboration between the government and the private sector in order to drive better outcomes. “Given all the constraints that women face, such as their care burden for young children and the elderly, as much as coaching and improving practice within firms can help, this is a bigger structural problem. We need to have better childcare and healthcare policies.” She added that the mainstream economics thinking of women as an untapped resource should be turned on its head: “I don’t think that we can talk about how to create a more gender equitable economy through trade policy or through other means until we start having conversations about the need to value care work in its paid and unpaid forms. These problems are not down to individual women. They are not down to firms. They are not even down to countries.”