When news broke that Jane Fraser was named Citi’s CEO, many celebrated, and rightfully so; the first woman to ever lead a top bank on Wall Street seemed to break the glass ceiling and prove to the public that Wall Street was not the stereotypical male-dominated locker room it once was (Fortune, 2020). Just a few days later, Goldman Sachs announced that Stephanie Cohen would be the CEO of their Consumer Investment Management Division, making her the first woman at the firm to run a major division of the bank and putting her on track to enter the C-suite (Wall Street Journal, 2020). But are these appointments truly indicative of a new era for Wall Street? How much progress has Wall Street actually made in making room for underrepresented groups? And what steps are we not addressing yet? 

Women really only began to enter the financial services industry and management in the 1980s, and since then, there has been very little progress in promoting women at the executive level. As of today, within the financial services industry, women only hold 19% of positions in the C-suite (this puts the financial services industry below average - American women hold an average of 22% of C-suite positions across all industries) (Harvard Business Review, 2016). This is a stark contrast to the 47% of management and professional roles held by women in financial firms. While the number of women are represented fairly equally at the entry level (thanks to increased awareness and diversity programs seeking out women), there still remains significant work to be done in changing demographics at the top. And while there may be a time lag in getting current women in entry level positions to eventually reach the C-suite, there still exist a host of challenges within the culture of the financial services industry that prevent women from reaching the top. Women are less likely to be promoted at the same rate as men, and statistics for women of color are even more abysmal - women of color are 34% less likely to get to their first promotion compared to men in the industry (McKinsey, 2018). It may be the case that touting equal gender representation at the entry level is not a great indicator of what the financial services industry is like for women.

So what accounts for the discrepancy between entry-level representation and C-suite representation? For one, sexism, though less blatant than it once was, still exists in the workplace - this comes as a shock for many women given how prevalent conversations about gender equity and opportunity are today (Harvard Business Review, 2016). Additionally, most women lack the same mentorship and sponsorship that men naturally get, due to having more gender representation at the top. Male superiors are less likely to invite women to after-work events for fear of being inappropriate, and this results in women having a weaker relationship with superiors that could potentially guide them to higher level positions (CNBC, 2019). Lacking the representation and sponsorship also further contributes to an ‘ambition gap’, where underrepresented groups question whether they can reach the top because they have not seen members of their own group represented at the top. With few women occupying executive positions, it becomes difficult for younger women to know which paths to take to advance their careers.

Aside from these challenges, there also remains a tough issue in a field that values long-term experiences and grueling hours: maternity leave. While firms have implemented generous maternity leave and flexible work policies over the years to accommodate women who decide to have children, most women are afraid to take full advantage of the policies for fear of appearing apathetic about their careers in comparison to starting a family (McKinsey, 2018). This places a great pressure on women to choose between sacrificing her family or giving up opportunities for career advancement. Advertising maternity leave policies and flexible work hours for women works to single out women in the workplace even more rather than improving the balance between work and home life that these policies initially sought to achieve. The issue of work versus family tends to affect women in their 30s, and it is at this point that women experience less advancement opportunities, or even leave the workforce. Even for women who try to balance both work and family, societal gender roles place pressure on women to still take on more household responsibilities - 50% of senior-level women in the financial services industry reported having to take care of household responsibilities in addition to work, as opposed to only 13% of senior-level men. The fears of stalling career advancement, sacrificing family, and taking on extra responsibilities that men tend not to are cited as the primary reasons that cause women to conclude that after a certain point, rising to the top is not worth the costs (Harvard Business Review, 2016). 

While women, including Jane Fraser and Stephanie Cohen, are breaking barriers in the financial services industry, the companies they lead are unfortunately not without further responsibility to improve the industry for women following in their paths. Continuing to seek out women for roles within the industry, creating more opportunities and further accessibility to sponsorship, and holding training sessions to address and eliminate bias in hiring, reviews, and promotions are all steps that the industry needs to take in order to continue a trend of diversifying the C-suite. Parental leave and flexible work schedules cannot be marketed solely to women - in order to change the notion that women are the sole caretakers, and reduce the fear of inhibiting career advancement, these policies should be advertised and encouraged for all employees, regardless of gender. Addressing and correcting these issues is overdue, and all the more necessary in order to create a better quality of worklife for all employees, and more importantly, to allow other women to reasonably and successfully follow in the footsteps of women like Fraser. 

Sources

Aspan, Maria. “What Citi's new CEO means for other women on Wall Street.” Fortune, 16 September 2020, https://fortune.com/2020/09/16/citigroup-jane-fraser-ceo-women-wall-street/.

Boorstin, Julia. “Survey: It's still tough to be a woman on Wall Street - but men don't always notice.” CNBC, 26 June 2016, https://www.cnbc.com/2018/06/25/surveyon-wall-street-workplace-biases-persist---but-men-dont-see-t.html.

Chin, Stacey, et al. “Closing the gap: Leadership perspectives on promoting women in financial services.” McKinsey, 6 September 2018, https://www.mckinsey.com/industries/financial-services/our-insights/closing-the-gap-leadership-perspectives-on-promoting-women-in-financial-services.

Hoffman, Liz. “Goldman Shuffles Consumer Banking, Asset Management Executives.” Wall Street Journal, 29 September 2020, https://www.wsj.com/articles/goldman-reshuffles-consumer-banking-asset-management-executives-11601393056?st=8sn3l3dbjjti1yh&reflink=article_email_share.

Jaekel, Astrid, and Elizabeth St-Onge. “Why Women Aren't Making It to the Top of Financial Services Firms.” Harvard Business Review, 25 October 2016, https://hbr.org/2016/10/why-women-arent-making-it-to-the-top-of-financial-services-firms.