The recent Bloomberg article by Gillian Tan and Katia Porzecanski called Wall Street Rule for the #Me Too Era: Avoid Women at All Cost focused on the worries of men on Wall Street who work with young women. The article highlights the Pence Effect, in which men avoid solo contact with younger (read more junior) women.
This phenomenon conflicts directly with the stated goal of many funds that they hire more women in investment roles. The institutional allocators have put many larger funds on notice that they expect greater diversity on the investment staffs of the funds that receive their allocations. We know many funds that are actively trying to identify qualified women to join their teams. Anecdotally, many of our clients with the strongest track records, also have more diverse investment teams.
The number of more experienced women on Wall Street remains limited and to expand the number of women on any fund’s investment staff, it has to hire women under 35 years old. To get the best performance and greatest growth from them, the women need to be integrated with the rest of the staff. Senior staff cannot withhold the guidance and feedback that other staffers receive.
Not providing that guidance will work to the detriment of the fund (and its investors) as well as the individual women. More importantly, the fear of a false accusation would imply a belief that women investment professionals are not honest. Why would a fund hire anyone whose honesty would be in question?
Once we assume that funds endeavor to hire investment professionals with unquestioned integrity, that leaves a fear on the part of some men that they do not know how to behave. I believe that they do know how to behave, whether they have done so in the past or not. Perhaps many of these men are not proud of how they have treated their female counterparts or subordinates up until now.
This is the opportunity to start fresh with both existing colleagues and newly-hired women investment professionals. Treating every employee respectfully, whether male or female, avoids a perception of bad behavior. Take some of the silly sexist comments that women have heard in the past and substitute men in them and they sound even sillier. There is no reason for physical contact in the work place beyond handshakes and inadvertent or benign contact.
Wall Street employs smart and creative people. This should be a no-brainer.