For many women, money is still the ultimate taboo. And it’s a taboo that was called into light through a memorable anecdote shared during a panel on women, money, and power at the recent New York Times’s New Rules Summit in Brooklyn.
While describing money’s continued status as a contraband topic of conversation for women, Ellevest CEO Sallie Krawcheck told her fellow panelist Stephanie Cohen, Chief Strategy Officer at Goldman Sachs, about a time she had to prove this point.
“We have made it so that we as women prefer to talk about literally anything else than money, including death,” Krawcheck said. “I had one woman who said, ‘That’s not true, Sallie.’ And I said, ‘Buried or cremated?’ She said, ‘Buried.’ I said, ‘Okay, how much did you make last year?’ And she went, ‘Uh...’ We’ve made money this source of shame.”
What exactly, in 2019, allows frank conversations about money to still feel so forbidden to women? Over the course of their conversation, Krawcheck and Cohen offered up a couple of key hypotheses.
Reason #1: Girls are conditioned to feel differently about money and, more broadly, about risk-taking than boys.
The way we’re spoken to about money when we’re young can have a formative influence on the way we approach it later in life, something Krawcheck testified to.
“In our society, I would argue that money is a male construct,” she said. “Boys are taught from the home to go out and make money, become the CEO, and go for it. Girls are taught to budget and be careful.”
This pattern is only reinforced by the messaging we receive later on in life, with characters in pop culture promoting the idea that it’s “actually viewed as an attractive female characteristic to be bad with money,” Krawcheck added. To this end, consider Carrie Bradshaw of “Sex In the City” fame.
“She’s the savviest New York woman we’ve ever heard of, and she couldn’t afford to buy her apartment because she bought too many shoes,” Krawcheck said, referencing a famous episode in which Bradshaw realizes she’s miscalculated her shopping expenses by $36,000. “She couldn’t even do the math to figure it out.”
Reason #2: People who don’t know how to have conversations about money historically make less of it.
After being socially conditioned when we’re young to feel a certain way about money, it’s no surprise we carry these attitudes with us into the workforce as adults. And although Cohen was quick to point out she doesn’t see gender as the single determining factor in this, adding that generational differences can also contribute to one’s willingness to discuss money, she did offer an example as to how she’s seen a lack of financial frankness impact earning potential.
“You’ll have a group of people who are highly uncomfortable talking about money and never say anything about it who then after the fact will come to you and say how unhappy they are about how they were paid,” Cohen said. “Then you’ll have people who are willing to talk about it early and often, wrapping it into their performance and goals… that type of conversation is much more constructive than being afraid to talk to your boss about money and after the fact coming back and asking for more.”
So, what can we do today to ensure women are equipped to advocate more money and rewire existing attitudes toward these conversations?
On the organizational level, Cohen and other leaders at Goldman Sachs have rolled out a few key initiatives designed to address these issues — and companies who care about advancing women’s economic equality should take note. One of those initiatives, Launch With GS, includes a company commitment to invest $500 million in women-led companies and investment managers, as well as a data-driven approach to closing the gender gap in investing.
“We started Launch With GS because when only two percent of female founders are getting VC capital, the last time I checked, that is an amazing investment opportunity, and we invest for a living,” Cohen said. “We want to get women on the other side of the table as investors, too, because we’re never going to change that two percent statistic if we don’t have more women where the money is.”
Beyond equipping women with the capital and investment power needed to open doors for other women on the global scale, Goldman Sachs has also implemented internal policies to ensure more equal advancement opportunities for its female talent.
“It’s about getting women into the right roles early in their careers so that they can be paid well as they move up,” Cohen said. “There’s a lot of talk about getting women into the C-suite, and we’re quite focused on that, but it’s not just the C-suite. It’s the layers below the C-suite.”
So, the folks at Goldman set ambitious hiring goals across the organization to bring their junior population of analysts and associates to a ratio of 50 percent women. Though that number may “sound good,” Cohen said it counts for little if there aren’t accountability measures in place — which is why Goldman sees diversity as a key performance benchmark for its leaders.
“When we sit in meetings and talk to our senior leaders about how they’re doing on market share and revenues and margins, we’re also asking them how they’re doing on diversity,” Cohen explained, adding that the results then influence compensation decisions. “We’ll look at the normal financial metrics but we’re also looking at the diversity metrics, and it’s important that you have those conversations in the same room because they can’t have a different level of importance from the business priorities. Because diversity is a business priority.”