For over a quarter of a century, major Wall Street firms have been reeling from significant claims of sexual discrimination. Following multi-million dollar settlements, the seemingly contrite leaders of these banks pledged to make their establishments more welcoming to women seeking success in this lucrative yet predominantly male sector.
In present times, Citigroup, the firm with the most serious allegations, is led by Jane Fraser, the first woman CEO of a significant US bank. At Morgan Stanley, another bank that reached a settlement, women constitute 40% of the total workforce and 47% of fresh recruits. Goldman Sachs, which last year paid $215 million (€198 million) to settle continual allegations of gender discrimination, boasts of its recently appointed partners being the most diversely represented ever, with a composition of 29% women.
However, progress remains slow. The highest ranks of U.S. financial firms continue to be overwhelmingly male-dominated. As per recent research by Morningstar Sustainalytics, up to 45% of financial firms in the S&P 500 lack any female representation amongst their ‘named executive officers’. This research highlight is more startling when compared to other sectors traditionally dominated by men, where more substantial progress is visible. Here, only 26% of the industrial companies are led by all-male teams, according to Jackie Cook, director of stewardship.
What’s more, there appear to be signs of regression. For instance, Goldman’s Stephanie Cohen, the sole woman leading a central division, has been on long-term leave and another woman in the management committee, Beth Hammack, decided to exit the firm after being overlooked for the CFO role.
Citigroup also shows signs of backsliding following Fraser’s milestone appointment – the recent selection of Vis Raghavan to lead banking leaves all five of its operating division heads and its CFO as males. Even though Morgan Stanley’s CFO, Sharon Yeshaya, is another woman in a top role, all three contenders for the CEO position that opened last year were men. This gender disparity extends to the senior management of private equity firms and UK banks, especially after the planned exit of Alison Rose from NatWest in 2023.
JPMorgan Chase claims a commendable record for gender diversity in its top ranks under the direction of its long-serving chief executive, Jamie Dimon. The bank’s management committee, comprised of 16 members, is nearly 50% women, including those in pivotal positions commanding the three major business units. Jennifer Piepszak and Marianne Lake have recently strengthened their positions as leading successors for Dimon, should he choose to step down.
JPMorgan’s large commercial banking and asset management sectors are noted as more amenable to women than the traditionally male-dominated trading floors and high-travel investment banking. The bank’s prestige and success have elevated it to be the largest in the US, attracting a wider pool of women in mid-career leadership roles. Its rivals acknowledge JPMorgan’s successful efforts to leverage its position.
Nevertheless, any serious Wall Street entity aiming for diverse leadership must refuse to be complacent. Post-2008 financial reforms and the emergence of booming tech industries have arguably dented banking’s allure and fiscal clout. High-achieving women with the wherewithal to ascend to top banking positions are coveted by other sectors, negating the need for these women to await their turn for Wall Street’s pinnacle roles.
Prominent examples of such movement include Ruth Porat, who deserted her CFO role at Morgan Stanley for the same position with Google in 2015 for a higher payday. More recently, Thasunda Brown Duckett exited JPMorgan Chase to lead investment group TIAA and Katie Koch abandoned Goldman for the CEO position at asset management firm TCW.
Top executives at major banks assert that such career manoeuvring is common. Aspiring bankers, regardless of gender, are rarely patient to wait for their opportunity at prestigious roles. Men once eyeing leadership at JPMorgan, Morgan Stanley, and Goldman are now found in significant positions at other firms. Consequently, it is rational that women are embracing the same trajectory.
Dublin is recognised as one of the top 25 international cities for female entrepreneurs. However, my discussions with high-ranking women in the financial sector indicate that this sense of satisfaction may be misguided in a field where the pipeline of women in the mid-stage of their careers remains thin. Although explicit gender bias is now thankfully uncommon, they report that many in management positions continue to favour individuals with whom they share a level of comfort. It’s reported, male managers who adopt a ruthless leadership style are often rewarded with challenging roles, unlike their female counterparts. Therefore, when opportunities for leadership roles externally present themselves, a sizeable number of emerging female executives on Wall Street are prone to consider these offers. Why wait in anticipation for a possibly elusive leadership opportunity when one could assert authority immediately elsewhere? – © The Financial Times Limited 2024