Where Are All the Women on Wall Street?

Despite a recent article in New York magazine which asked the question, “What if Women Ran Wall Street?” it is clear from the data that those kinds of hypotheticals are just that – hypothetical.

A recent survey released by the Financial Women's Association (FWA) reveals that in 2009 the presence of women at the highest levels of major corporations in New York remained flat, while the number of women in board and executive positions either increased slightly or decreased when compared to the 2008 study. The FWA study examined a cross-section of the largest public companies (ranked by revenue) in the metropolitan New York area, looking at proxy statements filed with the Securities and Exchange Commission, as well as other SEC filings, articles, and company websites.

Not only are the number of women in C-suite positions not increasing, they are actually declining. The FWA survey showed the number of women executives decreased to 9.8% in 2009, down from 10.3% in 2008, while the number of companies with zero women included among their most highly compensated executives increased more than 12% from 58 to 65.

The number of companies that have no women executives at all listed in their filings increased nearly 27%, to 33 from 26.

Meanwhile, the percentage of board seats held by women in large public companies increased slightly to 17.8% in 2009, up from17.6% in 2008, an addition of just one seat. The number of companies in the sample with no women on their boards actually increased by 22%, to 33 in 2009, up from 26.

“The data is very disappointing, given that women represent consumers and expertise in almost every industry,” said Ziporah Janowski, co-chair, FWA Directorships & Corporate Governance Committee, in a press release. “Companies who don’t incorporate their voice may be doing so at their financial peril. In the wake of this recession, it’s more important than ever for companies to realize that having a diverse board and corporate leadership improves a company’s economic performance.”

Yet the gender gap doesn’t make economic sense. A recent survey from MassMutual shows that women are much less confident than men about their investment decisions. But a slew of recent research shows that women’s lack of confidence may actually be beneficial by making women investors more cautious. A study from January 2000 to May 31, 2009 by Bloomberg and the National Council for Research on Women showed that hedge funds run by women outperformed those managed by men. Funds managed by women, on average, saw annual returns of 9%, compared with a 5.82% average annual return for men.

In the worst of financial times, the prudence shown by women fund managers pays off even more. Funds run by women only lost 9.6% of their value compared with a 19% decrease in funds run by men.

Recent data from Vanguard backs up this claim. In the mutual fund company’s survey “Equity Abandonment in 2008-2009: Lower Among Balanced Fund Investors” the investment activity of 2.7 million individual retirement account investors from the beginning of 2007 through October 2009 found that men were 10% more likely to sell their stocks at market lows than women, leading to larger losses.

Mike Alfred, chief executive at BrightScope, an independent provider of 401(k) ratings and financial intelligence to plan sponsors, advisors, and participants, said in a recent phone interview that the confidence men show in investing is usually an over-confidence.

“Which is why a lot of studies say that women are really better investors than men because men are trying too hard to beat the market which as most people are now aware is a fools game,” he explained.

Stephanie Hauge, president of the FWA, says that boardroom diversity in New York is remaining flat. “These results underscore the need for organizations like the FWA, which work to develop future female leaders and advocate for women in key decision-making roles, especially the board rooms of corporations.”