When Chief Executive Michael Corbat announced a long list of promotions and executive changes at Citigroup (NYSE:C) on Monday, one notable feature of the lineup was its all-male cast.
The only woman named in Corbat's 800-word memo was Sara Wechter, his new chief of staff, who held the same role for Chairman Michael O'Neill. All 13 of the executives now reporting directly to Corbat are men.
Male dominance is an age-old feature of big banks' executive suites, but it appears to be particularly acute at Citigroup, which now counts only one woman among its 24-member operating committee. Cece Stewart, the president of U.S. consumer and commercial banking, reports to global consumer bank head Manuel Medina-Mora, who was promoted to co-president of Citigroup this week.
Stewart was not mentioned in the memo, and her role was unchanged by the reorganization, according to Citi spokeswoman Shannon Bell.
The lack of gender diversity among Corbat's top lieutenants could lead to another round of unflattering scrutiny at Citigroup, which has spent the past five years trying to edge out of the spotlight. It is also the latest example of a persistent industry-wide trend that critics argue hurts more than just banks' reputations. Companies lacking boardroom and executive-suite diversity tend to underperform and expose themselves to operational risks, corporate governance experts say.
"A lack of diversity means that everybody thinks the same, nobody questions the strategy, and nobody questions whether there are better ways of doing things," says Wendy Watson, a former executive vice president of global services for State Street (STT) and a board member at Citizens Financial Group and RBS Citizens.
In the financial services industry, "there are plenty of well-qualified women, but when it comes down to the crunch and things are tough, the men revert to their comfort zone, which is people who look just like them," she adds.
Women do run several businesses at Citigroup, including its private bank, the U.S. retail bank, its North American markets and transaction services businesses and the OneMain Financial subprime lending unit Citigroup is trying to sell. None of those women report directly to the CEO. (American Banker recognized several Citigroup executives in its 2012 ranking of the Most Powerful Women in Banking; Julie Monaco, head of North American transaction services, was ranked as the 10th most powerful woman in banking.)
Citigroup also promised to do better — eventually.
"While our CEO's limited number of direct reports does not reflect the diversity of our company leadership, we anticipate this will change over time due to our deep pool of talent," Citi spokeswoman Bell said on Thursday in an email reply to questions. The bank declined to make any executives available to discuss gender issues.
There is considerable evidence that including women in their highest echelons improves companies' performance: the nonprofit research organization Catalyst has found that companies with three or more women directors get significantly better returns on sales, investment and equity than those with no women on the board. This is true even in the high-stakes and high-testosterone finance world: this week, a report from the professional services firm Rothstein Kass found that hedge funds run by women produced three times the returns of the average hedge fund in the third quarter.
