In the 1970s, Irene Dorner was sure that with the surge of women joining her in the working world, the financial industry would start looking pretty equal before long. It didn't seem so far fetched to Dorner, now the CEO of HSBC USA, to expect that by the time she was 40, "the ratio would be 50/50 in all the places that mattered."
It hasn’t happened. While we are no longer in the openly discriminatory era of "Mad Men," when only white males had a serious chance at advancement, the world of banking and finance, like all the well-paying professions, still has what social scientists call a "leaky pipeline." Women enter the lower rungs at roughly the same numbers as (or even in higher numbers than) men, but their ranks thin out the higher you go in terms of pay or position, until women are vastly outnumbered at the top.
Brazen discrimination of the sort chronicled by Susan Antilla in her startling 2002 book "Tales from the Boom-Boom Room: Women vs. Wall Street" may be partly to blame. More common, though, are the subtle barriers: some buried within women themselves, and some hidden inside the minds of the people around them. That's the view held by Dorner, among others. "I've come to the conclusion," she says, "that most of the discrimination I have suffered is unintentional."
Consider what Patricia Cox faced after her maternity leave from a previous employer. She returned to find that a well-meaning manager had taken good care of her—or so he thought—by saying she wasn’t available for a challenging assignment that involved a lot of travel. Cox, now senior vice president of corporate brokerage services at Charles Schwab, says she had a frank talk with her former boss, telling him, "That would have been a great role. I would have loved it. I know you felt you were acting in my best interests, but please don’t make assumptions on my behalf. I have no problem saying no; I do have a problem not being asked."
While Cox's former supervisor might have learned from the experience, too many bosses at too many other companies are making similar mistakes. But if the high-powered women interviewed for this article represent anything beyond their own upbeat determination, something is changing—if not in finance at large, then at least in their particular institutions. Like Cox, these women are taking action instead of offense, with the dual intention of making banking fair to those who come after them, and enabling their institutions to profit from everyone's talent.
Of the more than 6 million employees in American banking, 61 percent are female. But those women tend to settle at the bottom, failing to move up proportionally. The pattern holds even when comparing male and female MBAs. For the past 25 years—a full generation—women have made up more than 30 percent of newly minted MBAs each year; by 2006, women made up 43 percent of the MBA graduating class, or nearly half. Wouldn’t women make up at least 30 percent of the top?
Alas, that's not the case. In 2009, according to an analysis by the Institute for Women's Policy Research, 45 percent of the women working in banking and finance received entry-level wages below $34,999; only 7 percent earned $100,000 or more. For men, the numbers were reversed: 21 percent earned $34,999 or less, while 31 percent made upwards of $100,000.
At the 79 finance and insurance companies listed in the Fortune 500 in 2009, Catalyst, a top think tank on women's workplace issues, found that on average, women held just 2.2 board seats out of an average total of 13.2 seats. That's fewer than one in five. Of those institutions' 1,428 corporate officers, only 17.9 percent were female.
The numbers suggest that financial institutions are not fully using their female talent. Says Dorner, "Why would you only fish in half the talent pools of the world? That doesn’t make commercial sense."
The imbalanced numbers become self-replicating, reducing an organization's likelihood of attracting and promoting women—not to mention winning clients.
An all-white, all-male management team can be off-putting for prospective clients that aren't, says Cox. "We want to reflect our customer base. Whether that’s women or minorities, we live in a diverse world."
But reflecting the broader population is difficult when there are generations of norms to overcome. As Dorner puts it, "Banking is an old-fashioned industry, made by men for men in a bygone age. Inevitably, the unwritten rules of behavior are rules that men understand and women don’t."
How do women miss those unwritten rules? Research confirms the anecdotes: women get degrees in art history and English literature instead of economics and business; they work hard but don't tout their accomplishments; they wait for a raise instead of making the case for one; when they run into barriers, they doubt themselves instead of confronting issues head on. In short, they too often are unprepared to manage their careers with maximum effectiveness.