Citigroup : Banking Sees Rise In Female Executives

By Chip Cutter and Vanessa Fuhrmans

Banking, long dominated by men, now outpaces other industries in promoting women, a point underscored this week when Citigroup Inc. named Jane Fraser as its next chief executive.

The industry has made strides in recent years in elevating women, giving them jobs that place them on the executive track -- and potentially in the corner office. When Ms. Fraser at Citi succeeds Michael Corbat upon his retirement in February, she will become the first woman to run a major Wall Street bank.

The appointment reflects efforts at Citi and some other large financial services firms to put women in roles where they are responsible for big divisions' profits and losses and get the broad experience needed to advance to the highest echelons.

During the financial crisis, Ms. Fraser ran the bank's strategy division, laying the groundwork to shrink the bank and sell units like the Smith Barney brokerage. Citigroup then tapped her to shore up its private bank for the ultrarich. From there she moved to St. Louis to run its mortgage unit, looking after a battered business serving homeowners worried about foreclosure.

In 2015, Ms. Fraser went to Mexico to run the bank's scandal-marred Latin American business, turning over the male-dominated management and boosting its financial performance. Last year, Mr. Corbat and Citigroup's board named her president and put her in charge of the global consumer business. That unit accounts for about 40% of the bank's total revenue.

Despite Citi's historic move, management experts say much work remains in closing the financial industry's gender gap. The chief executives of other large banks such as Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co., are men. Last year, JPMorgan shortlisted two women, Marianne Lake and Jennifer Piepszak, as potential successors.

"Women being promoted to these positions, especially in industries where they are really breaking new ground, happens because of intentionality," said Lorraine Hariton, chief executive of Catalyst, a research and advocacy group that pushes for more women in executive roles. "We still have a long way to go, but I think we're moving in the right direction."

Across the corporate world, the proportion of women moving into the management ranks hasn't changed significantly in recent years, according to data that McKinsey & Co. and LeanIn.org have collected since 2015 on the leadership pipelines inside hundreds of major companies.

Senior women in banking have fared better than in many other sectors, taking 27% of C-level spots. That is higher than the overall C-suite average of 21% women, according to the McKinsey and LeanIn data. In 2019, men outnumbered women in initial promotions into banking management, but women outpaced men at each step beyond, including senior director, vice president, senior vice president and C-suite roles. Over the past few years, the McKinsey data also show the percentage of women at the highest management levels has steadily increased.

Fortune 100 banks have, on the whole, recruited more women into top operational roles than other companies on the list, according to a recent Stanford University analysis. Until recently, the largest publicly traded American bank to be run by a woman was KeyCorp. Then-CEO Beth Mooney, who retired in May, became the first woman to run a top 20 bank in the U.S. when she was appointed to the job in 2011.

Many banks have strong retail-banking operations that employ a significant number of women in consumer-facing roles, resulting in deeper potential talent pools, Ms. Hariton said. Efforts to promote women in banking have also been helped by a decadeslong wave of consolidation in which traditional Wall Street banks have expanded their consumer-banking operations, she said.

But the ascendance of women into the top jobs on Wall Street over time has been slow, marred by decades of allegations of gender bias, unequal pay and sexual harassment. Women have long complained of a masculine culture in banking fueled by late-night strip club visits or off-color remarks on trading floors. One well-known 1996 lawsuit alleged the basement of Smith Barney functioned as a so-called boom boom room.

Even some women who reach the most senior levels in finance sense that their gender has hindered their advancement, according to a McKinsey survey of high-ranking women. More than 50% of women surveyed who had reached the level of vice president or above said they missed out on opportunities because of their gender, compared with 10% of the men surveyed.

A number of banks have set up programs to identify promising women earlier in their careers, moving them into roles with profit-and-loss responsibilities, or pairing them with seasoned executives or board members who act as mentors, said Lee Hanson, vice chair of the financial services practice at executive-recruiting firm Heidrick & Struggles International Inc. As more women have been added to bank boards, more companies have also made gender and racial equity a priority within their management ranks and beyond, she said.

"Now that we've seen, truly, this glass ceiling broken, I definitely think there's going to be more attention," Ms. Hanson said.

Margaret Keane, CEO of Synchrony Financial -- one of the largest U.S. banks to be run by a woman -- said she got on the leadership track, in part, by making sure to get operational experience early on in her career, at then-Citicorp. There, she got her start in one of the bank's call centers and was in a marketing position when she asked to take on a sales role with profit-and-loss responsibilities -- technically a step down at the time.

"You need a wealth of experience along the way," she said in an interview last year. Though it may feel counterintuitive, women who have built careers in other parts of the business "may have to take a step back or make a lateral move before they can move up."

Write to Chip Cutter at [e-mail] and Vanessa Fuhrmans at [e-mail]