It has been established that greater gender diversity leads to better returns, but just like most other industries, investment management continues to lack gender equal representation.
To celebrate International Women’s Day this March 8, we have put together a special issue of our regular series 13 Questions. Our interviewee is Caroline Shaw, Portfolio Manager, Multi Asset at Fidelity International.
We ask her what needs to be done for more women to succeed in this industry. It’s clear that to achieve gender parity requires addressing societal biases on all levels: from hiring to promotion and parental leave.
What Do You Like About Being a Fund Manager?
I like the interaction with clients and investors. The money we manage always has a purpose, from someone’s retirement plans to a charity’s grant making, and we should remember that.
How Has the Workplace Changed Since You Joined It?
I joined the industry in the days of filing cabinets and paper, before mobile phones in everyday life and with the dot com bubble bursting. The biggest change for me is probably the ease of accessing and consuming data and the volume of information that arrives on our desks these days, which brings a new set of challenges and opportunities as investors.
Long-term client needs remain largely unchanged - we still look to deliver strong risk adjusted outcomes to our end clients, although of course preferences and focus have shifted in recent years – for example, increasing awareness of sustainability.
What Advice Would You Give Your Younger Self?
Keep going. Work hard. Invest in yourself. Keep close with the friends, family, and colleagues, who get the best out of you. It will work out fine.
I find it sad that we haven’t seen any material progression in the numbers of female portfolio managers over the last 10 years. At Fidelity we have seen a large increase in women in all investment roles through insisting on gender-balanced shortlists, so we can make sure we're not inadvertently missing out on talent. But we still need to do more, to encourage women to move into portfolio management roles but also to help these women stay in those roles and thrive.
Why Do You Think Fund Management Lags Behind Other Industries for Diversity?
I suspect fund management is similar to financial services in general, so the problem is more widespread. This isn’t about what people study at university. In my opinion, it is about embedding financial education into the life of children so that career choices in finance are easier to understand. And then we need role models at those decision points, helping young people (or anyone on their career journey) understand where their skillsets map to our industry.
The theme for this year’s International Women’s Day is about innovating for a gender-equal future: what is the innovation you would like to see in the workplace? And how can investors contribute to innovating for a more gender-equal future?
We always want to hire the best person for the team. To make sure hiring decisions are truly fair, we need to consider how we judge what the ‘best’ looks like to combat the bias inherent in all of us. Some of the ways we try to do this include ensuring that hiring committees are diverse, that the opportunity has been widely shared to attract the best talent from the widest range of backgrounds, and that the question of diversity is actively considered in every hire. In our investment world, it is critical that decisions making teams are diverse and that role models for all are visible.
While diversity and inclusion can have a significant social impact it’s important to note how this also generates critical and positive impact on long-term value creation and risk mitigation. This should encourage boards to seek director candidates with different skills and backgrounds. Fidelity International has announced it will actively engage and consider voting against company management in most developed markets that do not have at least 30% female representation on the board of directors. In markets where standards on diversity are still developing, an initial 15% threshold is targeted. Last year Fidelity voted against management at over 400 companies (including abstentions) globally due to board diversity concerns.
What Can Be Done to Enable Younger Generations of Women to Work Their Way into Financial Services?
We need to get higher levels of financial literacy and we need school children to see a financial services career as an attractive option – with many routes and roles. This financial education should start much younger and it should be relevant and fun. No child should leave school without a sound understanding of how to navigate the basic finances of life.
With two older teenagers I have first-hand experience of how we aren’t quite delivering this yet. Alongside this, we need to get into schools and, to an extent, universities to show the next generation that there are a range of interesting financial services careers. If we don’t tell people what we do and how much we enjoy it, our profession will continue to be one that a fairly narrow set of people just “fall” into, and while the wider public have limited understanding.
Do You or Did You Have a Female Role Model or Mentor at Work?
Earlier in my career I did have a mentor who provided much needed support. He encouraged me to push for additional qualifications, supported my return to work following the birth of my children and enabled me to take on responsibilities that allowed me to be empowered and to grow my career. Now I am fortunate enough to know, work with and look up to many inspiring women, within our team, at Fidelity and in our industry. And I am delighted to be involved in the Diversity Project’s PM pathway as a mentor to one of my talented colleagues who is treading her path to a career in portfolio management.
Are There Particular Individuals that Have Been an Inspiration to Your Career?
I was fortunate to meet Theo Zemek very early on in my career. We never knew each other well but to see a successful female portfolio manager alongside all the other portfolio managers I met meant that I could at least see a potential career pathway.
What’s the Best Piece of Advice You’ve Ever Been Given?
It is not advice, per se, but I am forever grateful to my parents who have unconditionally supported every decision I have made (they must have had reservations about some of them!) and offered advice only when sought. It is probably the best parenting advice and I hope to be half as good as they are.
What Can Male Fund Managers Do to Advocate for Their Female Colleagues?
Mentor, encourage, support.
What Would the World of Asset Management Look Like If Half of the Managers Were Female?
In multi-asset at Fidelity this is the world we already live in, and I think it looks great! As at January 2023, within Solutions and Multi Asset at Fidelity International, there are 10 female and 8 male Portfolio Managers. Moreover, female representation brings much needed balance to teams.
John Coates’ excellent book “The Hour Between Dog and Wolf” explains the stress responses of body and brain on traders and the impact on risk preferences, illustrating how important it is to have diversity in teams. The book covers chemical reactions in the brain, with rising testosterone levels in “winning streaks” leading to increased self-confidence and risk taking. Cortisol, a stress hormone which can surge in difficult market conditions or when losses are made, can result in a loss of decision-making ability (as well as many other symptoms). My key takeaway, which the author highlights, is that we all have different physiological responses to risk taking because of hormones (women and older men have lower testosterone levels, for example). Therefore, biological diversity – a more even balance between men and women, young and old – would be an improvement in our investment teams. Female portfolio managers are key to improving that diversity within a risk-taking environment.
Has the Pandemic Helped or Hindered the Progress of Women in Your Workplace, in Your Opinion?
Definitely helped. The pandemic forced a re-think, with companies prioritising employee wellbeing. To give you an example, since the pandemic, Fidelity has launched equalised paid parental leave and family care leave for all its employees Personally, it broadened the opportunities available to me as flexible working made a role further away from home actually viable for the long term.
I believe some form of flexible working is a benefit to every person in the workplace at some point during their career: women and men, whether a temporary need or longer in duration. The fact that options like this now exist in many firms, and firms like Fidelity have truly embraced dynamic working, is great progress.
