As global asset owners seek more female talent within investment teams, Australia’s A$99 billion Aware Super said pension funds need to first address a crucial “industry image problem”.
Speaking at an International Women’s Day event at Aware Super’s Sydney office, the fund’s head of income assets, Sonia Baillie, said the Hollywood-style hedge fund manager stereotype is making it really difficult for young women to imagine themselves in investment roles.
“[It’s] the Wolf of Wall Street, and it’s Michael Douglas,” she told the crowd, while proposing that the industry speak more about female personalities in leaderships positions, such as Reserve Bank of Australia governor Michele Bullock.
“I think if we distil that imagery into our young women, they might be inspired to have that input into the economic debate.”
The Aware event came on the heels of the gender pay gap data from the Australian federal government’s Workplace Gender Equality Agency (WGEA) last week. For the first time, the report revealed the base pay and total remuneration pay gaps within large Australian private sector employers (100 or more employees).
It found the median total remuneration gender pay gap for superannuation and insurance companies was 26.1 per cent in 2022-23, with the median base salary pay gap 24.6 per cent. The superannuation sectors main source of inflow is the legislated contribution from employers, which is 11 per cent of total pay.
Flexibility in role design crucial
Aware Super’s Baillie, who came from a private sector asset management background, said if pension funds want to attract women into higher-paid roles in investment teams, there needs to be flexibility in role design. This could include arrangements such as opening up more roles to part-time candidates.
“Where we see the most under-representation is at that mid-level career. Our early roles… have a great 50/50 representation [of female workers], but it’s at that childbearing age where we seem to see a really big drop off in investment management,” she said.
Women in Aware Super’s investment team also tend to be in research and responsible investing roles, Baillie said, but getting them into trading, portfolio management and risk-taking roles will be the thing that “really moves the dial” on gender pay gap.
To do that, funds must be willing to take some risks themselves, she said.
“I think the employment market is very technically siloed. If you’ve worked in private equity, you don’t ever dream of looking at listed equities because they are so different,” she said.
“Going to recruiters with a broader mandate and saying ‘this is the skill set we’re looking for’, and really to take the risks to develop those people – I think that is where we make progress.”
Chair of Aware Super’s trustee board, prominent business woman, Sam Mostyn said that for funds and the broader Australian business world to address issues around gender equality, boards and management must be held accountable.
Mostyn is also chair of the Women’s Economic Equality Taskforce (WEET), which consists of 13 women appointed by the Australian federal government in 2022 which delivered a report with recommendations that will facilitate women’s contribution to the economy in the next decade.
One of the immediate actions included in the report was paying pension contributions on government-funded paid parental leave. The lack of policy on this front has long been attributed as the reason why Australian women go into retirement with less of a nest egg than men, since they are more likely to take time off work after having children and lose out on pension contributions.
Mostyn acknowledged that Aware itself has work to do when it comes to addressing gender pay gaps. According to the WGEA data, Aware has one of the biggest total pay gaps among big Australian pension funds (23.6 per cent), compared to peers like the A$198 billion AustralianSuper who had an 8 per cent gap on the same metric.
“We’re going to face it and talk very publicly about the fact that we’re going to work on it [closing the pay gap]. We’re not going to pretend that we’re perfect,” Mostyn said.
“The way in which diversity must be allowed to flourish means that there’s going to be often quite difficult conversations, but they must be handled with respect.”
