"Gender diversity – and indeed diversity in more general terms – can help groups from converging around poor decisions."
In a speech delivered to the Women in Finance Summit in London, Butler acknowledged that the gender pay gap is still "striking". Some banks have reported gender disparities of around 50% for wages and 80% for bonuses.
She said the industry needs to "call out the fact that diversity is fundamental to business success and to the reduction of failure".
Butler argued that diversity – including gender diversity – confers "significant advantages" on firms, not least because firms with a more equal gender balance make more money.
She explained: "We know that women as investors reliably outperform men by 1.1%, with lower risk and volatility. We know that mixed-gender investment fund teams attract 6% more inflows than teams run solely by men. And we know also that a strong female presence at board level translates into significantly higher RoE for firms."
However Butler added that "this is about more than making more money", noting that firms promoting gender diversity also significantly lower their conduct risk. FCA data shows that firms with monocultures suffer 24% more governance-related issues than their peers.
Butler explained: "One answer is that we know that when a team includes more women, its collective intelligence rises. The other is a more general point around encouraging different perspectives to reduce the risk of groupthink. Behavioural scientists know that people tend to change their own assessments to bring them into line with those around them - a kind of social proofing.
"We also know that some teams are especially prone to excessively optimistic views of their own skills. And that those teams tend to be more close-minded. A classic trait in groups that lack diversity. Gender diversity – and indeed diversity in more general terms – can help groups from converging around poor decisions."
Butler also praised the continuing success of the Women in Finance Charter, the publication of the gender pay gap data, and the #MeToo movement which has sparked "growing sentiment that enough is enough in the creation of toxic environments that belittle and harm women".
