How Bias Blocks Women's Finance Careers
Blake Steenhoven
Assistant Professor
Blake Steenhoven:
My research broadly falls into two main categories. So the first is focusing on verbal and non-verbal communication between managers and capital market participants like investors and analysts. The second area of research is focusing on gender issues in accounting settings.
One of the papers that I think I am the proudest of was conducted in cooperation with the CFA Institute, specifically their Women in Investment Management Institute. What they were really trying to understand, and what we kind of came at this project in order to try to help address, is why we see that there is more of a gender parity in the lower levels of the CFA profession, but that women seem to be represented less and less as you moved up the ranks.
As accountants, what we have is expertise in performance evaluations, specifically how we use the information that's available to us. So our goal really was to look at the performance evaluation process and just see if there is something that might have been happening in that process that could be representing a roadblock for female analysts.
What we ended up documenting was this double standard in what's considered acceptable behavior for male and female analysts. Specifically, when we think about analysts in general, we think of them as fairly aggressive, hard charging, pretty forceful, dominant; these are characteristics that are stereotypically associated with men. So what's happening is when an analyst, as they frequently need to, exhibits behavior that is not like this–things like acting more cooperative or choosing not to pursue a particular recommendation–this represents surprising behavior. It's something that we just don't expect analysts to do.
One thing that the brain does not like is a surprise. When we have a surprise, we try to figure out, ‘Okay, what's the cause?’ Like what is the root cause that is making this thing that's sort of dissonant with what I'm expecting? When the analyst is female, there is a category available that might be helpful for explaining that behavior. We might associate collaboration and cooperation, and maybe a lack of aggression, with the female gender.
For female analysts, what this was doing was sending a signal that maybe this person isn't actually like an analyst; maybe they're not a good fit for the role because they don't have the characteristics I associate with analysts. So we were seeing negative performance evaluations. Now for male analysts, what we would see in that case is that it wasn't attributed to the analyst at all. It was just explained away as part of the context: either they just chose not to pursue the recommendation because there was politics involved, or it wasn't a good fit for the portfolio—things that we did not say at all, just inferences that participants in our experiment made.
03:00 This is a project that I've been fortunate enough to be able to present to a lot of practitioner groups, and it's one of these projects that I'm proud of because you can kind of see the impact that it's making on what's clearly a really important issue.