It’s been a big year for women’s voices.
Time honored the “Silence Breakers” — the men and women who gave voice to open secrets on sexual harassment and who pushed us to stop accepting the unacceptable — with its annual “Person of the Year” award. Companies in different industries have removed powerful men from their positions due to allegations of sexual misconduct. And globally, gender parity was one of the key themes in Davos, Switzerland, at this year’s World Economic Forum. The annual high-profile summit made headlines when it announced that all seven co-chairs would be women for the first time in its 48-year history.
In the banking industry, strides have also been made. Bank of America recently fired a senior executive over charges of inappropriate behavior toward a young female banker. And Brian Moynihan, the bank’s CEO, said there’s a “50-50 chance” that the next head of the company will be a woman.
Citi made headlines last month by disclosing data on its pay gap — marking the first major U.S. bank to do so. The fourth-largest U.S. bank by assets reported that “on average, its female employees earned 99% of men’s pay, and U.S. minorities earned 99% of non-minorities’ pay.” Bank of America and Wells Fargo reported very similar results soon after. But as American Banker's Penny Crosman questioned in her recent article: Is adjusted pay gap a true reflection of whether organizations are treating women fairly?
In fact, those figures don’t necessarily tell the whole story.
Even today, we see few women in top banking jobs.
True, Beth Mooney has been chairman and CEO of KeyCorp since 2011, and Elizabeth Duke, a former Federal Reserve governor, is now chairman of Wells Fargo.
However, these gains largely remain the exceptions: Women occupy less than 2% of bank CEOs positions and less than 20% of board seats worldwide, according to new data from the International Monetary Fund.
Of course, tackling the issue of gender imbalance is daunting and it will require efforts from all stakeholders. But there are starting points. To begin, financial institutions should focus on introducing more diversity in their boardrooms and in their senior leadership.
Banks could, for example, consider imposing term limits or a mandatory retirement age for board service to accelerate change. Additionally, organizations need to be more transparent on their policies and ensure equal pay for equal work. We also need to be mindful of tokenism: Having one woman on the board is a start but not enough.
In a recent Citi report, the company highlighted several other ideas on how companies can improve gender parity. They include promoting positive role models and tackling stereotypes, providing women more opportunities to build digital skills, elevating more women to positions of power and offering more flexibility to support parents and family caregivers.
The last point is particularly important. Numerous studies have shown that, as a group, having children lowers women’s lifetime earnings, an outcome known as the motherhood penalty.
Therefore, to help retain talent and promote an inclusive environment, banks should consider more flexible work arrangements and "returnship" programs for mothers looking to re-enter the workforce. For instance, Fifth Third launched a maternity concierge program, which is designed to help new moms tackle tasks like dry cleaning and grocery shopping. From a personal perspective, I have been asked many times how I could be a mother and yet travel so much for work. It would seem that society is still not ready to accept the multifaceted roles played by a working mother.
Boosting gender equality is not simply a women’s issue, but rather, it’s one that benefits men and women alike.
To be successful, financial institutions need to be a reflection of the communities they serve. Only then will banks be able to create innovative solutions that address the diverse needs of their customers.