1.2 Male Dominance within Trade Finance and Balancing the Gender Gap
Grace Lordan
Associate Professor in Behavioural Science, London School of Economics Managing Director, Behavioural Science at Work www.gracelordan.com
I teach executive courses at the London School of Economics as well as in various corporate settings. In addition to the courses on high stakes decision making focusing on capital structure, behavioural risk, and general conduct, I often cover diversity and inclusion. This is because who we choose to hire in an organisation determines its future success. As someone whose research is interested in understanding why people choose the occupations that they do, trade finance is particularly interesting. Looking at it from the outside in, a few stylised facts are highly relevant. Since the 1970’s women have chosen to converge into many occupations that were previously dominated by men, such as accounting and law, but not others, like the STEM professions. Finance 8
Trade Finance Talks
is somewhere in between. However, within finance, there is notable segregation by speciality, with trade finance being one of the most male dominated of the specialities. I would argue that we should care about the representation of women in trade finance beyond what it means for the individual themselves. Trade finance professionals provide an invaluable service to the economy, where a large proportion of potential customers are females. I emphasise potential as the share of females actually accessing trade finance is also disproportionately low. So, to begin with, we have a low proportion of women in trade finance. On top of that, those women that do enter the trade finance space experience a lower level of attainment on certain key outcomes, such as the propensity to get promoted and
wages earned per hour. The question is why? Like all other social phenomenon there are a number of competing hypotheses. These include, among others: statistical discrimination, taste discrimination, and the working environment. However, an often overlooked hypothesis is that differences in male and female personalities impact labour market outcomes in trade finance. Research shows that the average female is more risk averse, less competitive, more keen to avoid uncertainty, less extrinsically motivated, and are more cooperative. Some of these traits are clearly associated with higher rewards in trade finance jobs. Do note that these are not bad traits; in many instances they are likely to be preferred. However, we often encourage females to adopt
