Gauri Kuchhal is Principal at Artha Venture Fund (AVF)More From The Author >>
Towards Greater Gender Parity In Investors' Community: Much Room For Improvement
A study published by Warwick Business School in 2019 found that women consistently outperformed men in their investments, generating an average of 1.2 per cent higher yearly returns
Money is a cornerstone for power, and power is an aphrodisiac that men control. Women were considered unfit or lacking the mental capabilities to manage money-related matters. This dynamic ensured that the power balance remained tilted in favor of men. Like most industries and sectors, the investment industry was traditionally male-dominated, with far & few opportunities for women to enter and advance. As recently as the 1960s and 1970s, many investment firms had policies explicitly prohibiting women from working in specific roles or advancing to senior positions.
Even as these policies began getting abolished and more women entered the industry in the following decades, they faced significant challenges through bias and discrimination. The male diaspora still wasn’t accepting women in their bastion and struggling to share the power they yield, including in the finance and investment world. Research has demonstrated that women in investment roles commonly encounter challenges such as unequal compensation, limited or more minor roles, fewer chances for career progression, and a need for more representation in top-level leadership positions.
Additionally, women may face unique challenges in terms of networking and building relationships in the industry, which can be crucial for career advancement. Male-dominated social events, such as golf outings and after-work drinks, can create barriers for women trying to establish themselves in the industry. It becomes more challenging as a woman is expected to have a higher virtue for the societal norm of maintaining a work-life balance, raising a good family, and being home ‘on time’ post work.
However, there has been an increase in diversity and inclusion in the investment industry in recent years. In addition, many firms have implemented initiatives to promote gender equality, such as mentorship programs and training on unconscious bias. With changing family structure, women can focus better on work and also spend time networking. Another factor contributing to increased women’s participation in financial roles is the rising cost of living, which means both partners have to earn more and equally for the lifestyles they aspire to. Gender equality and delayed marriage age also contribute to women’s higher participation in the workforce.
We at Artha Venture Fund propagate higher participation of women at different roles and all levels. At Artha, our team comprises 50.00% females, with women occupying 50.00% senior positions. Our COO and both the Principals are women. We are committed to gender equality and providing growth opportunities to women. When it comes to funding the businesses, we don’t go out searching for businesses run by women, but we don’t shy away or look other ways because it’s a business run by a woman founder. We give importance to the idea and the problem that business solves and are committed to gender diversity and inclusivity. As a result, c40% of the fund’s portfolio companies have women founders, which is a notable achievement given the underrepresentation of women in the startup world.
A study published by Warwick Business School in 2019 found that women consistently outperformed men in their investments, generating an average of 1.2% higher yearly returns. This stat suggests promoting gender diversity can advance equality and drive financial success.
In recent years, several organizations and platforms have emerged to support women in the investment industry, including platforms like Women in Investing (WII), WINPE, the Encubay community, and VC funds like AWE Fund, SHE Capital, Strongher ventures, etc. In October 2022, our President Droupadi Murmu inaugurated ‘herSTART,’ a platform to encourage women entrepreneurs. The GOI has also introduced a monthly allowance of ₹20,000 for up to one year for women-led startups.
In addition, the Women’s Indian Chamber of Commerce and Industry (WICCI) though not specific to the investment industry, has its finance and investment subcommittee that promotes gender diversity and inclusivity.
In addition, there are initiatives focused on specific areas of the industry, such as Women in ETFs (WEFT), which has a chapter in India and aims to support the role of women in the exchange-traded fund’s industry through networking events, educational programs, and mentoring opportunities. Online platforms like Sheroes also provide career guidance, job listings, and networking opportunities for women interested in finance and investment.
These organisations and platforms are essential in providing support and opportunities for women in the investment industry, and their existence underscores the need for greater gender diversity and inclusivity.
Despite these efforts, however, women must be represented in investment and leadership positions. This result requires action to ensure that women have equal access to opportunities and can succeed and advance in the industry.
Though women constitute roughly half of the talent pool, they are significantly underrepresented in the investment decision-making roles at private equity and venture capital firms and in leadership positions in companies that receive investment capital.
Achieving gender balance in the investment industry can be a catalyst for promoting diversity in boardrooms, the C-suite, the workplace, and business networks. The dialogue must start at the top of the capital structure, where corporate ownership resides and all critical decisions are made, to drive progress toward gender equality. Gender and diversity should be prioritized as a top-down agenda.
What should be done to include more women in the investment team?
- Mechanisms to make jobs more compatible with what women seek, allowing a flow of qualified women into the VC/PE sector
- Investing in young women from the start. More programs should be established to provide much-needed direction, guidance, and mentorship for women interested in careers in finance and investment. These programs can help women build networks and access opportunities that propel them into leadership positions.
- There is also an equal need to invest in training more female mentors and ensuring the visibility of women already in the industry. Mentorship is crucial for career advancement and can help women navigate the challenges of working in a male-dominated field. In addition, by providing women with strong role models and support networks, we can help create a more inclusive industry.
- Ultimately, achieving gender balance in the investment industry can be a catalyst for promoting diversity in boardrooms, the C-suite, the workplace, and business networks. The dialogue must start at the top of the capital structure, where corporate ownership resides and all critical decisions are made, to drive progress toward gender equality. Gender and diversity should be prioritized as a top-down agenda.
- In conclusion, the investment industry has made strides toward gender equality in recent years, but much work still needs to be done. By promoting gender diversity and inclusivity, we can create a more equitable and prosperous industry for all.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
Around The World