Women have made no progress in advancing their representation in capital markets in the past decade, and industry leaders need to make a more conscious effort to foster diversity in the industry, industry executives said on Monday.

Non-profit organization Women in Capital Markets released a study on Monday showing that despite an optimal economic climate and record job growth in the capital markets between 2000 and early 2008, women made no gains in representation. Excluding administrators, men continue to outnumber women four to one in all positions, according to the benchmarking study by international non-profit organization Catalyst.

“To say that we are recording progress for women in capital markets would be stretching the data,” said Deborah Gillis, Catalyst’s vice president, North America, who presented the study results in Toronto on Monday. “The truth is that women have made virtually no gains in representation in the industry since 2000.”

The study reveals that in 2008, women represented 39% of the entire industry, unchanged from 2002 and up just two percentage points from 2000. Furthermore, women held 17% of all ‘line’ positions — those important to advance to the highest levels — a proportion unchanged since 2000.

Slight gains were seen at the vice president level in 2008, up two percentage points to 16% from 2000. But since 2005, the percentage of women at the professional level fell to 20% from 21% and at the managing director level, the percentage of women fell to 9% from 10%. This trend weakens the leadership pipeline and reduces diversity of thought, according to Catalyst.

In the retail private client business, women’s share of line positions was 16%, unchanged from 2000, in a period in which there was an 8% rate of growth in the total number of positions.

Job growth among investment advisors has been particularly strong, with the number of positions rising 13% since 2005. But during the same period, the percentage of female investment advisors remained constant at 16%.

Between 2000 and 2008, female branch managers tumbled to 15% from 21% and women in national and regional management positions dropped to 31% from 36%.

In the investment dealer area, women’s overall share of line positions was stagnant at 20%, and women lost ground in virtually every area of the capital markets business.

“You can see why progress is not a word that I would use to describe what we have seen for women in capital markets,” said Gillis.

The declining levels are partly a result of a declining pool of female talent since fewer women are pursuing education in the realm, according to Lynn Kennedy, managing director of foreign exchange at BMO Capital Markets, who spoke at the Toronto event. She said she was not surprised by the results of the study.

“The pool is smaller,” she said. “We have to do more to keep them in the industry.”

Michelle Khalili, managing director, equity capital markets at CIBC World Markets Inc., agreed. She said firms should put more emphasis on retaining women who are already in the pipeline, and fostering career development for female employees.

In addition, schools should make more effort to attract female students to capital market career opportunities from a young age, the speakers said.

They noted that another factor contributing to the stagnant growth is a lack of leadership and commitment among senior executives.

Females have successfully advanced in their representation in other areas of the financial services industry, and this is largely a result of action taken at the leadership level, Gillis noted.

“Change comes when leaders take focus and action,” she said.

In particular, Canadian banks have made major progress in diversity. In 2008, the number of female corporate officers in the banks rose by nearly six percentage points, according to Catalyst. Capital markets should learn from and leverage this experience in other parts of the financial sector in order to foster similar progress, Gillis suggested.

Specific areas of focus for firms could include establishing mentoring programs, creating access to networks for women, and assessing talent-management practices to ensure the removal of all subtle biases that could impact decision-making, according to Gillis.

“It is only through actions like these, supported by leadership,” she said, “that change will happen.”

A lack of mentors and accessible networks remain significant barriers to women in capital markets, according to Martha Fell, CEO of Women in Capital Markets. But she added that individual programs within firms are not enough to inspire meaningful change. A more comprehensive approach must be initiated at the leadership level.

@page_break@“It’s not just about initiatives; it’s about a cultural shift,” Fell said.

Gillis said the financial crisis has presented an opportunity for women to gain ground, since many organizations are considering new strategies and seeking ways of tapping into new markets.

“They are looking at the widest range of talent in the marketplace – men and women – to drive the innovation that will lead not just to stability, but to recovery, and ultimately, to growth,” she said.

Gillis pointed out that organizations could benefit financially from boosting the proportion of women in leadership positions.

“Research from Catalyst shows that companies with more women in leadership, on average, have stronger financial performance than companies with fewer women,” she said.

IE