Illustration: Ashley Siebels
As the 2008 financial crisis taught us, individual bankers are less likely to pay the price when it comes to wrongdoing. But a new Stigler Center paper found that when individuals do get punished, they’re far more likely to be women.
“When Harry Fired Sally: The Double Standard in Punishing Misconduct” found that male financial advisors are three times as likely to engage in misconduct, are twice as likely to be repeat offenders, but women are far more likely to be punished for these crimes and lose their jobs —especially when their bosses are men.
Women are less likely to do the crime, more likely to pay the time
We already know that women are less likely to make as much as men when they work in the financial sector. The Wall Street Journal found that female financial advisers made median earnings of $58,528 compared to their male counterpart’s $91,814.
This new study proves that gender discrimination happens with misconduct too.
Looking at data on the estimated 1.2 million people who have registered as financial advisers, the researchers found that female advisers are 50% more likely to be fired following misconduct and 30% less likely to find a new finance job after a misconduct incident. Researchers said that it did not matter how long the women had been at the firm, how many assets they had managed to attract for their firm, or how well-known they were in their industry; what mattered when it came to punishment was whether they were a woman.
When you mess up, you need a sponsor at the top to vouch for you
The study found that it’s the firms, not customers or regulators, who are leading the charge for punishment — which shows us why we all need sponsors at the table who can vouch for us when we fail.
Having a network of peers in the office to support you won’t help when it comes down to it. Office tribes can be a source of support for those who are in them, but when you are left out of them, they can lead to feelings of ostracism.
Firms with equal gender representation of executives disciplined male and female advisers at similar rates. But firms with more males in the top positions were more likely to be unforgiving towards women — even though they let bygones be bygones with men. Firms who had no women at the ownership level were 42% more likely to be fired than men in the same firm after misconduct.
One proposed solution to this systemic discrimination, the researchers concluded, is to get more women in these top positions: “Decision makers in organizations can directly affect policies leading to discrimination…members from the discriminated group, i.e., women, are more likely to recognize discrimination and less likely to support discriminatory practices.”
Female financial advisers are far less likely to cheat the system, but are being punished more when they do mess up. Meanwhile, male financial advisors keep getting more second chances. It’s only fair for women to be getting them too. Fairness in the workplace comes not just on how you treat employees when they succeed, but also how when they fail.