Brenna Hughes Neghaiwi, Tom Sims

ZURICH/FRANKFURT – Women are still rare guests at the top echelons European banks.

A Reuters analysis of top industry positions revealed that the 25 most valuable banks have experienced 22 chief executives and chairs changes over the past 2 years. 21 of these 22 jobs were filled by men.

Only one lender, Britain’s NatWest, has a female CEO. Two other lenders (Spain’s Santander (MC):) and Rabobank in the Netherlands have women on their boards.

Tim goes away so, who’s Tim? Claire Godding was the former head of diversity in BNP Paribas’ (OTC) Belgium. She cited unconscious bias as the primary culprit.

“It is usually not a Sarah.”

This review was done on International Women’s Day and provides a brief snapshot of the industry. However, it shows how far banks need to go to attain equality at the top.

The result suggests Europe, while making strides in diversifying their C-Suites, has fallen short of Wall Street in areas that could give it a competitive advantage.

Interviews with nearly two dozen professionals, which included board members, academics and top executives, revealed that some of the greatest obstacles to reform are rooted in the immaterial working culture.

The diversity of the wider executive team at European banks is greater than in other countries. It typically includes around 10-20 senior management under the CEO.

This review revealed that 25% of the teams are made up by women. However, the Europeans trail the eight U.S. bank with major global reach (including JPMorgan (NYSE 🙂 and others). Citigroup (NYSE:) The average proportion of 30% is found in the NYSE.

Data gathered by Reuters in February does not show pending appointments, which could affect the diversity of genders at several lenders. Some banks stated that their top female managers are already lined up.

The most popular executive position at European banks was that of chief human resource officer. Industry experts claim that this job does not require the same level of operational experience as a chair or CEO.

The ROOM SUDDENLY BLEW SILENT

Kristine Braden from Citigroup Europe is the head of training and sees it as a key tool in making staff more aware about gender dynamics.

“When I came to EMEA I was the first woman to be appointed to one our executive committees. “I can still remember going to my first meeting. I was excited about meeting everybody,” she stated. 

“The room that was full of lively banter, suddenly became silent.”

    “Men and women develop relationships in different ways. Braden said that if a woman is looking to build a relationship with another woman she might compliment her. The men often have a lot of fun with one another. It is important to build trust and professional relations between both genders in order to establish professional connections.

Jane Fraser, Citi CEO, was the first woman to be the Wall Street Bank’s chief executive officer a year back.

Fraser spoke at a conference about her experience working as a consultant for McKinsey, saying, “That stage was so precious.

“I don’t believe I’d be here today without my phone.”

It goes far beyond just social justice.

Stephanie Niven is Global Sustainable Equity Portfolio Manager for Ninety One. “We view a dearth of diversity as a loss of competitive advantage over the long-term,” she said. Broadening the perspectives in a room improves understanding and contextualization of decision-making.

BOOST IN BOARDROOMS

Due to the fact that bank supervisory panels have been at the forefront of investor and policymaker scrutiny, female representation is closer than ever. Both sides of the Atlantic have a female representation of 37%.

Vincent Kaufmann from Ethos, director of proxy advisor Ethos, stated, “We vote for board members so pressure is first at the board.” But I think progressive investors will begin to concentrate on management once these problems are resolved.

Interviewees from the industry pointed out that the C-Suite has not been moving forward because of their predominant focus on board diversification.

Simone Stebler (head of Egon Zehnder’s legal services and executive recruitment in Switzerland), stated that “with that push for more female board members, I believe there was an opportunity”

They were also asked to step down from their managerial roles in order to be able to serve on the board. Sometimes, even without being in the executive committee.

OMFIF’s 2021 global survey found that European commercial banks performed above-average in terms of board representation. However, they lag behind peers in North America and Asia-Pacific at executive committee level.

What’s the deal with culture?

Many of those interviewed believe that, despite all the reforms being made by policymakers, Europe’s banking sector continues to reward inflexible working hours which favor men.

According to them, an old-boys’ network of men who help each other in their career advancement is alive and well.

Gertrude Tumpel Gugerell is a former member on the executive board of the European Central Bank and now sits on the supervision board of Germany’s Commerzbank.

Multiple interviewees agreed that it is difficult to change a company’s DNA. It can be difficult to find diverse candidates for senior executive positions. This is often due to the need for a pool of skilled middle managers.

According to Gavin Rochussen (CEO at Polar Capital, a London-based fund manager, “The easy part is getting gender diversity on the board. The more challenging part is at the second or third layer in an organization,” said Rochussen.

Godding is a former BNP Paribas executive who is now focused on diversity at Febelfin’s Belgian financial sector lobby Febelfin.

She said that banks often discover they have more than one glass ceiling. They lose women at the top of middle management.”

Feel it IN THE BANCK

Andrea Orcel, CEO of UniCredit, told Reuters banks need to shift their mindsets.

He said, “We are serious about this commitment and recognize that meaningful progress does not come from meeting quotas, but rather from creating a fundamental shift in our culture.”

Elena Carletti from Bocconi University is a professor of finance and joined UniCredit’s Board in 2019. She thinks meaningful change can occur quickly if will exists.

UniCredit, which was ranked 25 out of the 25 reviewed banks by Reuters has shown the most significant senior-executive-level improvements since 2019. This includes a rise in women’s representation from 4% up to 40%.

Carletti stated that almost half of the CEO’s direct report were women, compared with one who was under his predecessor.

The bank can sense the change.