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.

It's a gross generalization, of course, and it doesn't apply to everyone—but every woman interviewed for this article mentioned one or more of these problems. "It took a lot of us a long time to learn that you can't just be quiet, put your head down, and hope people notice what a good job you’re doing," says Maria Coyne, executive vice president of business banking at KeyBank, a subsidiary of KeyCorp, and a member of KeyCorp’s executive council.

Coyne says she and others now explicitly teach young women, "Do not assume someone's just going to notice. Learn to draw attention to your accomplishments in a positive way. Do not assume people know your career aspirations. You have to ask people to help you chart a clear path to what you want to accomplish." Or as Dorner phrases it, "The boss and the organization aren't telepathic. You have to ask for what you want."

Managers and institutions also operate with hidden assumptions and unconscious biases about women and men. No one can avoid harboring these, according to social scientists. The mind habitually fits the world into categories—women are like x, men are like y—that can make it harder to see the individual through the categorical scrim.

Stereotypes are buried like landmines in us all. For a slightly unnerving demonstration of how strongly this works in our minds, take the 10 minute "gender/career" test at Project Implicit. It can demonstrate the impact of a lifetime of cultural influences.

Most people, intentionally or not, still strongly associate men with careers and women with families. That has real-world effects. According to a Catalyst study of nearly 10,000 people who received their MBAs between 1996 and 2007, men and women with comparable aspirations, qualifications and parental status were hired at different ranks. A full 60 percent of the women, but only 46 percent of the men, were hired at an entry level or individual contributor role.

Above the entry level, a larger percentage of men than women were hired into any rank: first-level managers, mid-managers, and senior executives. As a result, women—again, with comparable qualifications, experience, parental status, ambitions, global region, and industry—made $4,600 less than men in their first post-MBA salaries. Catalyst found that the gap widened as time went on. Men moved up more quickly than women, and their salaries grew faster.

Hidden biases hurt mothers doubly, since parenting responsibilities aren't imagined as gender neutral.

Consider the work being done by Shelley Correll, director of the Michelle R. Clayman Institute for Gender Research at Stanford University. In one experiment, Correll and her colleagues asked participants to rate a management consultant. Everyone got a profile of an equally qualified consultant, except the consultant was variously described as a woman with children, a woman without children, a man with children, and a man without children. When the consultant was a "mother," she was rated as less competent, less committed, less suitable for hiring, promotion, or training, and was offered a lower starting salary than the other three.

Translating the experiment to the real world, consider this: If two parents—one male, one female—leave early one afternoon to see a child's soccer game, who might get praised for being involved—and who might hear grumbles about mixing up work and home?

Here's the advice that consultants give for handling unconscious bias: deal with it explicitly, consciously and measurably. "I have always been very ambitious, and I wanted to marry and have children," says JoAnn Bourne, senior executive vice president of global treasury management for Union Bank in San Francisco. So she confronted the stereotypes before they could hurt her. "I was very specific in communicating to my boss: I am pregnant and you won’t notice that I have children. I will be a very active mother and you are not going to hear about it."

Cox, at Schwab, suggests to women that they do more to announce their own accomplishments, in a way "that's comfortable for you, whether that's sending periodic updates to your boss about what you've accomplished or finding ways to communicate in the company what your group is doing. Conduct self-assessments. Produce quarterly reports. Sit down for regular updates with the boss. Run customer surveys. Find metrics that show whatever you’re doing."

For the organization, that means taking active steps to measure and monitor women's progress compared to men's. Managers and organizations can't simply assume that behavior is fair just because they believe in equity, however deeply. Feedback enables people to stay on course, instead of being hijacked by unconscious assumptions.

Several of the women interviewed for this piece report that their institutions have, recently, made a serious commitment to do just that. "There's just been a sea change in the last five years," Bourne says, crediting, in large part, regular news coverage of the issue.

One example of the change is playing out daily now at KeyBank, the only top 20 banking company based in the United States to have a female CEO.

Beth Mooney, who was named to the post in May, is "incredibly bright, personable, and an inspiration to many of us," Coyne says. But more than that, the chief marketing officer and other key officers are women, as well as a third of the board members, she says. "What we've proven with so many examples of women in leadership positions who are pregnant or managing very busy personal lives [is that] you can work very hard and also have a balanced life and manage your family, and not be totally at wit's end at all times." Coyne is committed to spreading that notion. Providing an example from her own staff, she says Key has an employee who will be promoted to assistant vice president while on maternity leave. "We want to make the point: regardless of what’s going on in your life, this was your next step," Coyne says.

Formal mentoring programs and diverse employee groups are important first-layer efforts in promoting women, and they are widely in place in the industry. Diana Kirk, executive vice president of the learning and diversity division at Zions Bank, was its "first woman VP, first woman SVP, and then first woman EVP." So, she says, "I have strong feelings on what has to happen for women and their banks to overcome the barriers."

Two years ago, when Kirk decided it was time to semi-retire after a long career in the private banking business, she and her boss split her responsibilities among three different women, all of whom were promoted to EVPs. But she kept supervising the mentoring and diversity programs. At Zions, she says, the senior women actively "make sure we're identifying talented women within the bank, mentoring them, making sure they're promoted, helping them to get back to school to get the right degrees. We're out there in every region so they feel they have someone they can talk to."

Union Bank's Bourne says she, too, has seen an increase in top-level commitment to action. "Years ago, there might be a passing comment in a meeting, but no really focused efforts. But just talking about the issues wasn’t getting us where we wanted to go."

Union Bank implemented a task force on diversity last December. It instituted reporting on the number of women and minorities in new hires, promotions and key positions. It also started requiring the establishment of diverse candidate pools for executive-level positions. "We monitor progress, looking at skill gaps, and [have] instituted rotational programs among line jobs and staff jobs," Bourne says. And on the Union Bank board, a formal executive compensation and benefits subcommittee is examining whether compensation and rewards are being allocated fairly.

But mentoring and diversity groups are just one step; those who are mentored and developed have to have real opportunity. "Every policy has to be reviewed to be not just neutral but also encouraging of women’s participation," Dorner says. "You have to audit the pay reviews every year to make sure managers haven't unconsciously discriminated," with women's pay falling behind without a clear reason.

At HSBC, metrics are kept, reported and reviewed on numbers of women interviewed, on hiring, promotion, and pay. Such measurement goes beyond feel-good rhetoric, Dorner says, and "adds definition, evaluation, and clarity. When managers see how they are actually doing, even if they can't explain it, they know that the numbers don't lie."

HSBC adds another layer with an external auditor's review of several years' of human resource and diversity data, "to see whether you've corrected trends or still have problematic trends," she explains. "All this adds to the body of concrete management information" that can help businesses measure the results.

As more companies see the hard data on diversity's impact on performance, they perhaps will inch closer toward finally meeting the expectations Dorner set for her industry, and her colleagues, all those years ago.

"We need to create an environment where people can bring their whole selves to work and contribute totally," Dorner says. What business could argue against that?

 

Reading List 

“Ending Sex and Race Discrimination in the Workplace: Legal Interventions That Push the Envelope,” Ariane Hegewisch, Cynthia Deitch, and Evelyn Murphy. IWPR, March 2011. http://www.iwpr.org/publications/resources/consent-decree   
“Pipeline’s Broken Promise,” Nancy M. Carter, Ph.D. and Christine Silva, Catalyst, 2010. http://www.catalyst.org/file/340/pipeline%27s_broken_promise_final_021710.pdf
Getting Even: Why Women Still Don’t Get Paid Like Men—And What To Do So We Will, Evelyn Murphy with E.J. Graff (Simon & Schuster/Touchstone, 2005)

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