No Women in High Finance? Look Again.

Written by Allison Shirreffs Thursday, August 12 2010

President Barack Obama has signed into law the Wall Street Reform and Consumer Protection Act. A year in the making, the act is packed with more than 500 new regulations and bolsters the government’s ability, on behalf of the consumer, to oversee financial firms. Whether or not the bill will thwart a future economic catastrophe remains to be seen, but its passage is a sign that Washington’s laissez-fair approach to Wall Street is no longer acceptable.

Several economists, academics, and regulators sounded warning signals in the months and years leading up to the crisis. Three of the most vocal were regulators, and in May of this year, TIME magazine ran a cover story about them.

Dubbed “The New Sheriffs of Wall Street,” these women – Elizabeth Warren, chairperson of the Congressional Oversight Panel and a front runner to lead the newly created Consumer Finance Protection Agency; Sheila Bair, chair of the Federal Deposit Insurance Corporation; and Mary Schapiro, the first woman to chair the Securities and Exchange Commission – all spoke out against the wheeling and dealing of various financial firms.

These days, they are often asked: Would the crisis have been averted if women ran Wall Street?

Implicit in that question is the fact that women don’t run Wall Street. High-ranking women in the financial industry are rare. In fact, a woman has never occupied the role of CEO at a major Wall Street securities firm. And, according to the Association to Advance Collegiate Schools, while women have gained ground on men when it comes to enrollment in American business schools (women recently checked in at 39.3 percent of full-time students, compared with 34.1 percent in 2004), the Graduate Management Admission Council notes that those female students are 6.6 percent less likely to pursue finance or accounting than they were in 2005.

Warren, Bair, and Schapiro all have law degrees, not MBAs, and none has ever worked for a Wall Street firm. But all three are wielding power over the financial industry, and their authority will no doubt increase as new regulations mandated in the Wall Street Reform and Consumer Protection Act are put in place.

Female regulators may be playing a more important role in the financial industry, but what about the women who work inside these financial firms? According to senior women bank executives surveyed by the nonprofit research organization Catalyst, 19 percent said they’d lost their jobs in the last two years, while only 6 percent of male bank executives had.

“It’s true that there are few women at the top and that number has not improved very much,” says Karen Peetz, CEO of financial markets & treasury services at BNY Mellon and No. 2 on the US Banker 2009 list of The 25 Most Powerful Women in Banking. “But if you look past the most senior positions, you will see more women working in the industry than ever before, and you will see the pipeline for leadership filling up with women,” says Peetz. “I think there is a stronger recognition that having a more diverse work force leads to business success.”

In 2004, Peetz helped start BNY Mellon’s Women’s Initiatives Network (WIN), a formal professional development program for the bank’s female employees. WIN boasts more than 2,000 members in 40 chapters across the globe. “Diversity of people, no matter whether it’s in terms of ethnicity or sexual orientation creates diversity of thought which is a critical component for business,” Peetz adds. Peetz’s boss, BNY Mellon Chairman and CEO Bob Kelly, has her back.

Kelly told US Banker in October 2009, “Getting women into the executive ranks and developing women more effectively,” leads to higher revenue growth and, over time, greater shareholder value. Kelly is putting his money where his mouth is. In 2008, nine percent of the bank’s management and operating committee members were women. Last year, that number jumped to 16.3 percent. And more than 40 percent of BNY Mellon’s corporate officers are women.

Developing women more effectively means providing mentoring and networking opportunities as well as professional development classes that spotlight skills – all things that BNY Mellon’s WIN organization does. While networking and mentoring are incredibly important, it’s the ability to understand the organization’s profit and loss statements that garners the choice roles. “[Progressing into] P&L management is the best route to the most senior level jobs at most companies,” explains Peetz.

In an effort to convince her male counterparts she was serious about a career in finance, Sabrina Bowens-Richard, vice president, asset allocation specialist, RidgeWorth Capital Management Inc. (a division of SunTrust Bank), systematically amassed her knowledge base. She earned her MBA and industry specific designations such as chartered financial analyst and chartered alternative analyst. “Companies will not take candidates seriously who are not passionate and display a deep sense of knowledge and commitment about and to the business,” says Bowens-Richard. With an arsenal of formalized training under her belt, she adds, “I felt like my chances of being discriminated against, at least based on qualifications, would be greatly diminished.”

Brittain Prigge, partner and director, client relationship team, Balentine LLC, a boutique investment firm in Atlanta, began her career at Merrill Lynch almost two decades ago. She thinks the “benefits of being female in a male-dominated world far outweigh the negative.” Like Bowens-Richard, Prigge has earned industry designations and honed her skills, but notes that it’s her “ability to be empathetic” that sets her apart. “Women have a different perspective. Men and women are different and see relationships differently, bottom line,” she says.

If the presence of women on boards and at the executive level is shown to generate revenue growth, why are so few women hovering in and around the C-suites of various financial firms? Is it discrimination, as some female employees contend (a number of discrimination lawsuits have been filed recently against Wall Street firms such as Goldman Sachs, Bank of America/Merrill Lynch, and Smith Barney by several female employees)? Or is it a matter of supply?