Earlier this month, chief secretary to the Treasury Liz Truss wrote in City A.M. concerning the lack of funding for all-female startups.
As she pointed out, 90 per cent of venture capital funding goes to firms with all-male teams, compared to just one per cent for all-female teams.
In her article, Truss proposed a number of remedies. These included suggesting that women need to be bolshier and push themselves forward more, trust their own ideas, and ignore those who try to put them in their place. She further proposed that girls should be encouraged to study maths and computer science.
This kind of rhetoric disturbs me. I’m certain that the Treasury secretary means well. But this list of qualities, which she determines are lacking in women, looks remarkably like a list of characteristics traditionally found in gender research to typify men.
The underlying implication is that attributes associated with men are superior to those associated with women.
Truss points out that the proportion of boys studying maths at A-level is 15 per cent higher than for girls, and that better maths is correlated with an earnings boost of over 10 per cent.
However, following this line of argument, we could also suggest that women should wear high-heeled shoes, since men are on average significantly taller than women, and taller people are far more successful in terms of reaching the highest echelons of leadership in business.
Gender research has highlighted that, during conversation, men are often more confrontational or argumentative than women. Too often, we associate “strength” and “dominance” with leadership.
It is this over-representation of leaders who are “bolshie” and push their ideas forward (as opposed to trying to find common ground and ascertain group consensus) that is encouraging office bullying, and resulting in emotionally deflated workforces.
We should not perpetuate either the behaviour or the stereotype by encouraging women to act more like men.
Let’s go back to the issue of funding. Not only do female-led teams have a harder time winning venture capital funding, but women business owners are also less likely to secure bank loans.
This is misguided. Last year, data analytics company Credit Benchmark compared the credit risk of 158 businesses in the financial sector. Companies in which over 80 per cent of the top quartile earners were male exhibited the highest credit risk, in contrast to those in which over half of top earners were female, which showed significantly lower risk.
Last week, I spoke to a senior risk manager at a major UK bank. In light of recent research pointing towards lower credit risk in more diverse companies, she suggested to her bank that it might make sense to consider a company’s gender pay gap when assessing the risk of providing a loan. She was told that this proposal could be considered if the Bank of England were to endorse such a lending model.
So what if the Bank of England were to require banks to consider diversity in their lending models, with more women in leadership roles resulting in lower interest rates?
Not only would this help female-led businesses get funding to grow, but if companies were aware that gender distribution would be factored into loan pricing, this might also encourage them to think more carefully about diversity. Who knows, it might even help narrow the gender pay gap.
Diverse companies are more successful precisely because women are not exactly like men. Those who occupy positions of influence need to recognise this, and make more of an effort to ensure that leadership teams embody a range of different backgrounds, skills, and perspectives.
But if we only promote and fund women who embody characteristics typical of men, and encourage girls to behave this way if they want to be successful, we will miss the opportunity to draw on the very skills that stimulate success in diverse companies.