International Women’s Day: Risk Management Issues to Watch

A 2013 piece on the role of women in risk management remains the most controversial article we’ve ever run in Risk Management magazine and the one that received the most comments and letters to the editor, hands down. Many of those reader comments were…let’s just say less than kind or receptive.

Today, International Women’s Day, offers the perfect opportunity to revisit that article, Woman at Work: Why Women Should Lead Risk Management, and some of our more recent coverage of pressing issues like the wage gap and gender parity at the board level.

The significance of this conversation is ever clearer, given not only the political climate and regulatory concerns, but also the simple data about the bottom line. Just last year, the Peterson Institute for International Economics and EY found that almost a third of companies globally have no women in either board or C-suite positions, 60% have no female board members, 50% have no female top executives, and less than 5% have a female CEO. After analyzing 21,980 publicly traded companies from 91 countries and a wide range of industries, their report, Is Gender Diversity Profitable? Evidence from a Global Study, found that organizations with leadership that is at least 30% female could add up to 6 percentage points to its net margin.

“The impact of having more women in senior leadership on net margin, when a third of companies studied do not, begs the question of what would be the global economic impact if more women rose in the ranks?” said Stephen R. Howe Jr., EY’s U.S. chairman and Americas managing partner. “The research demonstrates that while increasing the number of women directors and CEOs is important, growing the percentage of female leaders in the C-suite would likely benefit the bottom line even more.”

While study after study comes to similar conclusions, a recent report from EY explored why businesses need gender diversity for the innovation to thrive. Five disconnects continue to hold businesses back from achieving gender diversity on their boards, the firm found:

  1. The reality disconnect: Business leaders assume the issue is nearly solved despite little progress within their own companies.
  2. The data disconnect: Companies don’t effectively measure how well women are progressing through the workforce and into senior leadership.
  3. The pipeline disconnect: Organizations aren’t creating pipelines for future female leaders.
  4. The perception and perspective disconnect: Men and women don’t see issues the same way.
  5. The progress disconnect: Different sectors agree on the value of diversity but are making uneven progress toward gender parity.

Check out some of our previous coverage of key issues regarding women in business and risk management specifically:
Equal Work, Unequal Pay: Risks of the Gender Wage Gap
The Wage Gap in the Boardroom
Is the Insurance Industry Improving for Women?
Boards Still Lagging on Gender Parity
Preparing for New Pay Equity Requirements

Is the Insurance Industry Improving for Women?

women in financial services

More than 70% of women in insurance believe the industry is making progress toward gender equality and, for the second year in a row, over two-thirds think their company is working to promote gender diversity, according to a new survey from the Insurance Industry Charitable Foundation.

After the IICF Women in Insurance Global Conference, which brought together 650 insurance professionals, senior executive speakers, and CEOs to discuss how the industry can increase gender diversity in the workplace, the foundation polled attendees on the current reality of gender diversity and its evolution across the insurance industry.

Almost half of attendees agree that their company is working to promote gender diversity with another 19% strongly agreeing, but 24.5% disagreed, and 7.1% disagreed strongly. Biases in advancement (51%) and lack of opportunities for professional advancement (24.6%) remain the biggest barriers for women seeking leadership positions in their companies, respondents said. The industry may be making some progress on those issues, however, as the percentage of women who named “biases in advancement” and “lack of opportunities for professional advancement” as the chief barriers fell to 68% from 76% last year.

“As evidenced by the tremendous turnout of the 2015 Women in Insurance Global Conference and the engaging discussions it created, companies are clearly recognizing the need for a more gender inclusive workplace,” said Betsy Myatt, executive director of IICF’s Northeast Division.

But the findings make clear that insurance still lags far behind other sectors of the financial services industry in terms of support for women. Those surveyed – who were all there because they work in the insurance industry – said that insurance was the least supportive of advancing women to senior leadership, compared to accounting (47.8%), banking (26.1%) and investment services (14.1%).

“While there is still progress to be made toward achieving gender equality, the vast majority of survey respondents who have found a positive shift in corporate culture is certainly telling of the strides the insurance industry has made thus far,” said Bill Ross, CEO of IICF.

Some of the survey’s key insights include:

Which of the following is the greatest challenge women face in is ascending to positions of leadership within the insurance industry?

  1. Inflexible workplace standards: 7.4%
  2. Women don’t promote themselves enough or effectively: 30.1%
  3. Limited opportunities mobility up the corporate ladder: 39.4%
  4. Lack of C-suite sponsorship: 23.0%

Which of the following financial services sectors is the most supportive of the advancement of women to senior leadership.

  1. Banking: 26.1%
  2. Insurance: 12.0%
  3. Accounting: 47.8%
  4. Investment Services: 14.1%

Which of the following is the biggest barrier to entry (perceived or actual) for women seeking leadership positions in their company.

  1. Lack of opportunities for professional advancement: 24.6%
  2. Lack of desire from company leadership to appoint women to senior leadership roles: 17.0%
  3. Biases in advancement: 51.1%
  4. Desire to start a family: 14.1%

In what way do you believe gender equality has been most improved across the insurance industry?

  1. The establishment of mentorship programs: 14.2%
  2. Sponsoring executive networking opportunities: 24.0%
  3. More active recruitment of a gender-diverse workforce: 26.2%
  4. Shift in corporate culture: 35.6%

Women to Watch

The risk management and insurance industry was, and still is, a male-dominated field. This is a fact. But what’s also true is that more and more executive-level positions within the industry are being filled by women. They moved from secretary to the risk manager, to CFOs of major corporations, directors of risk management for Fortune 500 companies and heads of insurance recovery for major law firms.

They’re making moves.

In Risk Management‘s January/February 2011 issue, I highlighted some of the female pioneers within the risk management and insurance industry, letting them share their story of how they squashed sterotypes and landed leading roles in the field. I profiled successful women such as:

  • Kathie Maley, Vice President, Risk  Management, Special Risk Services, IMA Financial Group
  • Stacey Nielsen, Senior Risk Analyst, Dollar Tree Stores
  • Tamika Puckett, Risk Manager, Public Schools of Alexandria City, Virginia
  • Trish Henry, Executive Vice President and Deputy General Counsel, ACE
  • Lori Seidenberg, Vice President of Enterprise Risk Management, Centerline Capital Group
  • Dorien Smithson, Executive Vice President of Strategic Outcomes Practices, Willis

    University of California Chief Risk Officer Grace Crickette.

And we get a glimpse of the achivements of even more women in Business Insurance‘s annual “Women to Watch.” In it, the publication recognizes women doing outstanding work in insurance, risk and benefits management, and related fields. One of the 25 honorees, Grace Crickette, spoke at last month’s RIMS ERM Conference in San Diego. As the chief risk officer for the University of California, she also serves on the RIMS ERM Committee. In her interview with Business Insurance, she gives some great advice to future (and even current) generations of risk managers:

I had a great boss, who’s since passed away, and one day he said to me, “Grace, your desk is a dangerous place to do your job.” And I said, “Well, Bill, what do you mean by that?” And he said, “You’re not going to make the best decisions on implementing policies and procedures and programs if you don’t get out in the field and really understand the business.” So I think that would be one bit of advice: Don’t spend too much time at your desk. There’s not a lot of risk at your desk; and if you want to be of value to the organization and really progress in the organization, you really need to get out and really understand the business in a holistic way. The other one is also then to learn the language or the taxonomy of the other people you’re working with. I think in risk management, you can tend to become insular and just focus from an educational or professional standpoint on being with other risk managers and studying just risk management.

Great advice for any profession.