As the #MeToo movement has swept the country, bringing to light claims of sexual harassment against powerful men in media, politics and other industries, banks have largely avoided the spotlight.
Ellen Alemany, the chairwoman and CEO of CIT Group in New York, believes it's because banks addressed the issue of harassment head-on two decades ago, in the wake of the infamous “boom-boom room” scandal at Smith Barney.
In the mid-1990s, Smith Barney, now part of Morgan Stanley, paid $150 million to settle a lawsuit filed by a dozen women who said that they were victims of sexual harassment. Big banks responded by setting up employee hot lines, revising policies and establishing sexual harassment training. Alemany — one of just a handful of women heading a major bank — said that those efforts are paying dividends two decades later.
“I think that the industry, to give it credit, was terrific in terms of ... sensitivity training, making sure you have proper codes of conduct, actually having public firings if someone has demonstrated inappropriate behavior,” Alemany said during a panel discussion on bank culture at Thomson Reuters in New York.
Last month, Bank of America fired a well-known managing director, Omeed Malik, after a company investigation into claims of unwanted advances and sexual misconduct.
In the wake of Malik’s ouster, the industry braced itself for a #MeToo moment of its own, and the potential for public airing of harassment allegations. But such a moment has yet to materialize.
One reason could be that mandatory arbitration and nondisclosure agreements are often used in harassment settlements on Wall Street, keeping such cases out of the public eye. But banks have also been more aggressive than other industries in adopting a pro-inclusion stance on gender and sexuality issues.
Attendees at the panel discussion Wednesday said that the male-dominated industry has simply come a long way in establishing company cultures where sexual harassment isn’t tolerated.
“You never know what’s unknowable, but I hope that’s right,” said New York Fed President William Dudley, who has made improving bank culture a defining issue of his tenure. “It should be right.”
During the discussion, Alemany praised the #MeToo movement for encouraging women to talk publicly about the harassment they have experienced. The CIT chief was honored in 2017 as one of American Banker’s Most Powerful Women in Banking for her work in orchestrating a financial turnaround at the $50 billion-asset company.
“I think it’s really positive that people are feeling they can come out and talk about things right now,” Alemany said. “But I think as an industry, in financial services, we took a lot of steps.”