Women on Wall Street: Small group at the top gets smaller
Even before Sallie Krawcheck’s ouster from a high-ranking job at Bank of America, things weren’t looking all that good for women climbing the ranks on Wall Street.
The financial industry, long known for its boys-club environment, has only a small fraction of women as top executives. And that small cadre has been thinning out in recent years, with the most recent example Krawcheck’s departure as BofA’s president of global wealth management.
Her departure is part of a broader trend in the financial industry in recent years: Female employees are losing their jobs at a faster clip than men.
From 2007 to 2010, 12.5% of women in the financial industry lost their jobs, compared with 8.8% of men, according to an analysis of government statistics by the Economic Policy Institute. By comparison, in the overall economy during the same period, it was men who lost jobs at a higher rate.
And each high-profile departure similar to Krawcheck’s makes reversing that trend even more difficult.
“There were very few women in finance to begin with,” said Deborah Soon, a senior vice president of Catalyst, a nonprofit group that studies women in the workplace. “It’s hard to find others to step into her shoes.”
Krawcheck joins a string of other top female bankers to leave the upper echelons of financial companies in recent years. Other notable exits include Heidi Miller, who in June stepped down as one of two women serving on JPMorgan Chase & Co.’s operating committee.
Citigroup Inc.’s Terri Dial last year stepped down as head of the company’s consumer banking operations; former Morgan Stanley co-President Zoe Cruz resigned from the investment bank in 2007; and Lehman Brothers Chief Financial Officer Erin Callan was pushed out just before the firm collapsed.
And the departures weren’t just on Wall Street. Yahoo Inc. Chief Executive Carol Bartz stepped down from her job this week.
There is no indication that Krawcheck lost her job because of discrimination — Bank of America said she was leaving as part of a recent cost-cutting program at the struggling company, and Krawcheck has not explained her departure.
But her exit and the scrutiny surrounding it underscore what an increasingly rare species women like Krawcheck have become.
Women represent about half of the nation’s white-collar workers. But they represent just 14.4% of executive officers at Fortune 500 companies, according to Catalyst. Further, the number of women at the top of S&P 500 companies has only inched up over the last decade — from five in 2001 to 18 at the end of 2010, according to data from executive search firm Spencer Stuart.
Only two of the 30 components of the Dow Jones industrial average have a woman in charge. Ellen Kullman became CEO of DuPont Co. in 2009, and Irene Rosenfelt has headed Kraft Foods Inc. since 2006.
“While the ouster of a number of top Wall Street women cannot necessarily be tied directly to the glass ceiling or sexism per se, the numbers aren’t good,” said Deborah Ancona, a professor of organization studies at the MIT’s Sloan School of Management. “Women fill a minority of top leadership positions in corporate America.”
The finance industry has not historically been known as a welcoming place for women. The cigar and strip-club reputation was confirmed by a lawsuit against Smith Barney in the 1990s, which accused it of turning a blind eye to raunchy, sexist behavior. The lawsuit later became the subject of a book called “Tales From the Boom-Boom Room.”
The attention brought by the suit spurred wide-scale changes that helped stamp out overt discrimination and open up hiring. A decade ago, the number of women in finance was rising.
Even during the good times, though, few women were making it into the executive suite — a problem common to other big U.S. companies. While 55% of all employees at U.S. financial firms were women in 2010, only 16.8% of the executive committees at these firms were, according to Catalyst’s research. KeyCorp, of Cleveland, is the only bank in the Fortune 500 with a female chief executive.
The recession appears to have exacerbated these problems, which experts have explained in varying ways.
There are the long-standing barriers, such as the stereotyping of women, and the fear that they’ll be less likely to stick around after having children. In an interview this year, Krawcheck said, “There’s no doubt that bringing up the kids, having a family life and also having a full-time job on Wall Street is as extreme as it gets.”
There is some indication that the fastest growth areas at banks in recent years — including the various trading operations — have also been the areas that women have been the least likely to join.
Perhaps most important, the relative lack of female executives before the financial crisis meant that there were fewer women to serve as mentors and allies for up-and-coming executives when hard decisions were being made.
“It is a fact that people tend to hire and promote people who look like them,” said Betty Spence, the president of the National Assn. for Female Executives.
BofA has had a better record than most banks of promoting women. It was in the top 10 U.S. companies promoting female leaders, as ranked by Spence’s organization, and it has a higher percentage of women on its top management committee than other big banks.
“At Bank of America, we are focused on creating an environment where all employees feel they have the opportunity to achieve their goals. This includes a long-standing commitment to the development and advancement of women in our workforce,” a spokesman said.
At other firms, there are still women in top positions, including Morgan Stanley’s chief financial officer, Ruth Porat, and Ina Drew, the chief investment officer at JPMorgan Chase & Co.
Krawcheck herself is likely to have an easy time finding a new home — she made her way to Bank of America after losing a top job at Citigroup in 2008.
But most of the other high-profile female executives who were let go have not reappeared at similar heights and have not been replaced by other women.
Reuters was used in compiling this report.