Why Are So Few Women in Finance? It’s Complicated

Hollywood is probably one of the more well-known industries that’s widely seen as a tough place for women to ascend to the top. When Kathryn Bigelow won Best Director for The Hurt Locker in 2010, she became the first-ever female director to do so. (Chloé Zhao, who won in 2021 for Nomadland, was just the second. And then there was the refusal to even nominate Greta Gerwig for the smash hit and cultural phenomenon Barbie in 2024.) It’s notable not only that a female director won but also that the pool of female directors was so small. In fact, from 2007 to 2023 women accounted for a mere 107 out of 1,769 directors (6%). That’s a stunning if unsurprising stat.

Yet Hollywood is hardly an outlier when it comes to big-money industries in which women are underrepresented at the top. There’s also been a dearth of female workers among the upper echelons of financial management and investment services. Consider this: According to the Deloitte Center for Financial Services, only six of the 107 largest financial institutions in the United States were run by female CEOs in 2019, while in 2023 women accounted for a mere 8.2% of the CEOs of S&P 500 companies.

Key Takeaways

• Women and men begin closer to parity at the start of their careers in finance, but the C-suite is still largely dominated by men.
• There are comparatively few women role models and mentors in finance, and this may account for some of the gender disparity in top roles.
• Women were only 15% of venture capital “check writers” and filled just 21% of managing director–level operating positions in private equity firms.
• Although the gender gap is shrinking in MBA programs, women account for only 25.7% of finance faculty at top business schools.
• Nonprofits such as Girls Who Invest offer programs to bring young females into the world of finance through internships and mentoring programs.

Where Are All the Women in Finance?

Studies paint a mixed picture for women in finance. Though the percentage of men and women entering the field is roughly equal, men typically rise to the top faster than women do. For example, as of 2022 only about 15% of venture capital “check writers” were women, and companies founded by women accounted for a mere 2% all venture capital investment. The picture doesn’t get much rosier when it comes to private equity (PE), where by the end of 2022 women held just 21% of managing director–level operating positions. On the bright side, however, there is a greater focus on improving diversity, with women holding 48% of all entry-level roles in PE.

When it comes to gender equality, there are a few reasons why women may not be advancing to the top ranks as quickly as men are. One is a lack of role models. Without more women paving the way, those entering the field may find the path more challenging to navigate or may not even know there is one. Some women have voiced concern about work-life balance, while others simply cite the lack of manager support.

Important

The nonprofit Girls Who Invest was founded in 2015 and continues to invest in young women’s future careers in the financial services industry.

The Business School Impact

Based on business school enrollments, the number of people studying finance and business tends to skew toward men. A study by the Forté Foundation found that women accounted for 42.1% of all full-time MBA students in 2022, marking a steady rise from 31.8% in 2011, a statistic that nonetheless illustrates that the field is historically dominated by men.

Still, the exact size of the gender gap varies among different business schools. For example, 45% of students in Harvard Business School’s class of 2025 were women, while at Wharton women accounted for 50% of the MBA students expected to graduate in 2025. (No statistics were reported for gender-nonconforming applicants at either school.)

The gender gap is more pronounced at the faculty level. A 2024 study by the Association to Advance Collegiate Schools of Business (AACSB) found that among the country’s top business schools, only 25.7% of full professors are women. The lack of women in mentoring or leading academic roles, and the professional obstacles they face, could be relevant factors in the number of women seeking top boardroom positions.

Investing in Young Women

Women need mentors and role models to show that whatever roadblocks have been preventing them from achieving or even considering C-suite level positions can be overcome. This means starting young.

Fortunately, there are a number of nonprofits and other women-focused organizations rising to that challenge. Girls Who Invest, a nonprofit founded by financial expert Seema Hingorani in 2015, has an ambitious mission to have women managing 30% of the world’s capital by 2030. Girls Who Invest’s programs and offerings are designed to motivate, interest, and inspire young women to join the investment management and greater financial services field.

The mission is not new for Hingorani. Not only does she bring 25 years of investment experience to the nonprofit; she’s also been heavily involved in diversity initiatives. She’s a member of Morgan Stanley’s Diversity and Inclusion Senior Leaders Advisory Council and was previously the founder and chief investment officer of SevenStep Capital, an investment platform solely focused on women.

And she’s not alone. Ellevest, founded by Wall Street veteran Sallie Krawcheck in 2014, aims to make financial products more accessible to women through investing tools, access to financial planners, education, and coaching. The company’s motto says it all: “Ellevest was founded, funded, and built by women, for women.”

Business schools are also getting in on the action. Though it’s not just focused on financial careers, Rutgers Business School’s Center for Women in Business says it is “removing barriers, building community, and empowering women with the confidence and skills necessary to succeed as business leaders.”

The 13-member board is largely female and dedicated to growing opportunities for women through networking events, leadership workshops, female-focused mentoring opportunities, and more.

How Many Women Are There in Finance?

Overall, women outnumber men in the finance and banking industry, but the reverse is true at the most senior positions. At the beginning of 2021 women accounted for about 52% of the industry, according to research by McKinsey, but their representation fell at every step up the corporate ladder. In the C-suite, white women accounted for only 23% of executives, and women of color another 4%.

How Many Women Own Their Own Business?

According to a July 2023 U.S. Senate committee report, of the 33.2 million small businesses in America, nearly 13 million were owned by women. That is about 39%. However, the report said that women have been the driving force behind new small businesses in the wake of the COVID-19 pandemic, creating about half of them in 2020, 2021, and 2022. In particular, small businesses owned by Black women increased by 18% since the years 2017 to 2020, double the overall increase of 9% in all women-owned small businesses.

How Big Is the Gender Pay Gap in Finance?

According to Payscale’s 2024 Gender Pay Gap Report (GPGR), women in what’s termed “the finance and insurance industry” earned 77 cents for every dollar earned by men, at 23% the largest gap out of 15 industries surveyed and lower than the overall gap of 83 cents to every dollar for all women (a 17% gap).

According to efinancialcareers’ 2023 compensation report, some women actually earned more than men just in the finance industry, but only after reaching the age of 50, when a woman’s average salary was $443,800 compared with $206,366 for a man, while average overall compensation was $562,431 to $332,560. The reason given was the types of roles women fill in finance: “They are more prevalent in jobs with greater longevity (eg. compliance, operations, and risk), where salaries are more likely to rise in line with tenure and bonuses but are typically lower than in the front office.”

The same report showed that before then the gender pay gap in average total compensation was about 27% less than men in the 20 to 25 age group, 52% for 26 to 31, 58% for 31 to 35, 29% for 36 to 40, 36% for 41 to 45, and 58% for 46 to 50. However, even after reaching 50, when women earned 41% more than men in total compensation, women’s average bonuses were still less than men’s: $118,631 vs. $126,194.

The Bottom Line

Things are starting to change. Men may still be dominating the C-suite, but as more women learn about the opportunities available in business and finance, find mentors to help guide them, and break down other barriers, expect to see that gender gap start to close.

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