Sponsorship is key to embracing equity this International Women’s Day

The theme for this year’s International Women’s Day (IWD) is #EmbraceEquity. As the founder of Future IM/Pact, an initiative to increase gender equity in front-office investing teams, I’m all in.  

The IWD committee intentionally chose the term equity rather than equality; the difference between the two terms can be confusing. Equality focuses on equal rights and opportunities for women and men, whereas equity works on correcting historical and structural barriers to enable equality. One is about providing genders with the same opportunities, the other is about recognising we’re not all coming from the same starting point. Having equal access to opportunities means we need to work at identifying and dismantling the barriers that affect some genders more than others.

Not all barriers that curtail women from reaching their full potential at work are gendered. Intense workloads, inflexible work practices, unsupportive and ineffective managers, and politics and power plays can be equally corrosive to the career potential of men and women. Indeed, much of the structural and cultural challenges I help leaders and teams tackle these days are barriers to human potential and flourishing.  

And sometimes these challenges impact one gender more than the other. These gendered barriers are more likely to exist when one gender is disproportionately represented in the dominant archetype.  

In many organisations, that dominant archetype is male, Anglo-Celtic, heterosexual and extroverted. Complex human systems like organisations tend to favour a dominant archetype to reduce the decision-making load of enabling diversity. It’s generally easier to work with and promote people who think and look like you. While it may feel easier, dozens of studies and the lived experience of many leaders shows that homogeneity erodes the quality of the decisions and the culture that drives them.

Industries or teams that are dominated by one gender need to understand the gendered barriers that must be addressed to reap the benefits that diverse teams bring. For the investment management industry, the stakes are high. Less than 10% of the people who are allocating Australia’s $4 trillion of superannuants’ capital are women.

There are many reasons why we have so few women in key decision-making roles in funds management. Low levels of awareness and misperceptions about career pathways, male-dominated networks and team cultures, and work intensification partly explain why more men apply for entry level roles and why women are more likely to leave their professional investing career when family responsibilities collide.  

I implore leaders who want to reverse this trend to invest more of their time in mastering the art of sponsorship.

As distinct from mentorship, where a leader provides advice and encouragement, sponsorship requires leaders to use their reputational capital to advocate on behalf of their sponsee. It not only supports women facing entrenched structural barriers, but ensures leaders step up and act.

“While a mentor is someone who has knowledge and will share it with you, a sponsor is a person who has power and will use it for you.” Dr Herminia Ibarra

Research by London Business School Professor, Dr Herminia Ibarra, shows women being overly mentored and under-sponsored is a key barrier to their leadership potential. Effective sponsorship requires leaders to have skin in the game, putting their hard-earned reputation on the line. Ibarra’s research finds several factors that mean senior leaders do this more naturally for men than they do for women, including:

• Affinity bias makes it easier for male leaders to see future potential of men more than women
• Women are less likely to be self-promoting and therefore less visible to potential sponsors
• Reputational capital is finite; some need clear incentives and support to apportion part of their capital to high potential women

Structuring sponsorship as an all-in game of pushing for someone’s promotion has also been a barrier – not everyone is ready to be promoted. And there are many actions leaders can take in support of their sponsee’s future promotion potential. That’s why I’ve adapted Ibarra’s steps of sponsorship for our industry sponsorship program, Lift.

There are many other barriers that I see stop leaders from effectively enabling high potential talent. Their own performance pressures, a fear of having difficult conversations, poor self-awareness, ego-centric styles, and organisational hierarchies that encourage leaders to focus exclusively on their own teams are among the many factors that trip up leaders.

That’s why industry and workplace programs that heighten expectations of and support for leaders to step up and enable talent can be game-changing. With so few women rising to the top of investment teams, building a sponsorship culture is essential to #EmbraceEquity.

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