The princess and the paycheck, Blythe Masters' exit and #MeToo paranoia
Just joking, princess: A BNP Paribas banker who called one of his female employees “princess” and “choupette” (a French term similar to “sweetie”) testified in a London court that he did so “jokingly,” not to belittle her. Regis Pecheux, the bank’s head of corporate sales for central and eastern Europe, Middle East and Africa, said he was “irritated” with Angelina Georgievska when he asked their mutual colleagues, “Where is our princess today?” But he didn’t think it was necessary to apologize, because “trading floors are sometimes not particularly civil environments; aggression, dark humor and sarcasm are on display every day, which makes it an unusual, if never boring, working environment.” Georgievska, head of the corporate derivatives group for central and eastern Europe, Middle East and Africa, is suing BNP, claiming her gender, a painful health issue that made it difficult to cope with travel demands and her outspokenness over a gap between her pay and that of male colleagues led to discrimination against her. BNP said it considers her claims of unfair treatment to be unfounded.
Big news in New York: The superintendent of New York's Department of Financial Services intends to depart on Feb. 1. Maria Vullo has been highly visible during her three years as the state’s top banking and insurance watchdog, creating a national model for cybersecurity regulations at banks and battling the federal Office of the Comptroller of the Currency over its plan to create a fintech charter and other matters. New York Governor Andrew Cuomo hasn't chosen a successor, although he's said to be considering his chief of staff, Linda Lacewell, for the job.
How to start a wildfire: A Morgan Stanley survey of more than 200 investors and lenders found that, in projecting future performance, they were twice as likely to expect female- and minority-led companies to perform below market average than those run by white men. Yet that expectation is not justified: After receiving angel capital, minority-led firms perform in line with peers, and female-led firms typically do better, Morgan Stanley said in its report, which suggests bias is to blame for the huge funding gap they experience compared with firms led by white men. The survey also found that 80% of respondents think women and minorities are raising sufficient capital, despite admitting that they rarely see pitches from such entrepreneurs and, when they fund any, do so at about 20% of their average commitment. “If each one of them looked at three or four more deals from women and people of color, we will have made a difference,” said Carla Harris, the head of Morgan Stanley’s multicultural client strategy group. “All you need is a couple of these large investors to start really making money in this space and it will catch on like wildfire.”
Applause: The top two executives at Jeffries sent out a strongly worded memo saying they will not tolerate the “paranoid and fundamentally wrong” behavior of men who are opting to avoid female colleagues in the wake of #MeToo. “If you don’t know how to conduct yourself as a responsible, courteous and balanced human being, the fault lies exclusively with you and not with an allegedly flawed system designed to ensnare the innocent,” the investment bank’s chief executive, Rich Handler, and president, Brian Friedman, wrote in their memo to employees, as covered by Yahoo Finance and Quartz. The move follows a Bloomberg article titled “Wall Street Rule for the #MeToo Era: Avoid Women at All Costs,” which, you may recall, we covered here previously. The widely read article draws on interviews with more than 30 Wall Street executives who said some men in the industry are avoiding one-on-one meetings with women and refusing to sit next to them on flights, out of fear of false accusations. (It’s a phenomenon that one of our longtime Most Powerful Women in Banking, LeeAnne Linderman, also wrote about in an op-ed for us this fall.)
Those fools are a liability: Four New York City officials who formerly worked at Goldman Sachs called the reaction of some Wall Street men to the #MeToo movement “sickening.” Responding to the same Bloomberg article as the Jeffries’ executives, these four officials from the mayor’s office said in a letter to the editor: “If men at Wall Street firms are incapable of the simple act of having dinner alone with a woman without making fools of themselves, then those men pose a financial and cultural liability to the company.” One of their suggested remedies: Male and female leaders must start to think of mentorship and sponsorship as part of their job description. Cheers to Alicia Glen, Lindsay Greene, Sonam Velani and Carl Rodrigues.
Job well done: Danièle Nouy is stepping down as head of the Single Supervisory Mechanism, the eurozone’s chief banking regulator created in 2013 to avert future crises. She started with just a handful of people, but now has 1,232 in her arm of the European Central Bank, which, the Financial Times writes, is “widely credited with helping shore up a banking system that during the summer of 2012 was looking at risk of collapse.” In the FT profile, Nouy, whose job is based in Frankfurt, mentioned getting support at home from her husband, an insurance executive who works in Paris during the week. “He fills my fridge and he does the cooking,” she said. Asked about the first leadership lesson she ever learned, Nouy said it came from a book she read a long time ago — “Le Zéro Mépris” by Hervé Sérieyx. “Do not be arrogant is the best advice I received through this book. As it was also my inclination, I always kept that in mind,” she said.
Reminder: Our newly launched “Most Powerful Women in Banking: Next” program is now accepting applications. This list will highlight outstanding female leaders ages 40 and under who work in retail and commercial banking. Know someone who should be recognized? Get more details here.
Blythe Masters is stepping down as CEO of the blockchain startup Digital Asset Holdings, citing “personal reasons.” She will remain a board member, adviser and shareholder. The high-profile former JPMorgan Chase banker, who took the CEO job in March 2015, has been an outspoken proponent of blockchain technology. “She helped bring credibility to the industry, especially back in the day,” said Henri Arslanian, PwC’s fintech and crypto leader for Asia. Digital Asset named board member AG Gangadhar as chairman and acting CEO.
Royal Bank of Scotland has named Katie Murray as its chief financial officer, though her base salary will be less than her male predecessor received for doing the job starting in 2014. Murray has served as interim CFO since the departure of Ewen Stevenson to HSBC in October. Alison Rose is the leading internal candidate to succeed CEO Ross McEwan when he steps down after 2019. If Rose gets that job, RBS would become the U.K.’s first major bank to have women in its top two executive positions.
CIT Group has promoted Wahida Plummer to chief risk officer and given Marisa Harney, its chief credit officer, an expanded role with oversight of all areas of credit risk. Plummer succeeds Robert Rowe, who left the company. She had been an executive vice president in charge of regulatory matters since joining CIT in 2017 from Wells Fargo.
State Street Corp. has hired Donna Milrod as head of its newly formed global clients division. This role puts Milrod on State Street’s management committee, which is the company’s most senior strategy and policymaking team. Her 25 years of experience in financial services includes working at Deutsche Bank, where she served as deputy CEO for North America. Most recently she had been a senior adviser to both Broadridge and McKinsey, giving guidance on navigating risk and increasing revenue. At State Street, Milrod is an executive vice president and reports to Andrew Erickson, head of the global services business.
Even Financial has recruited Nadine Murray, a digital marketing executive at JPMorgan Chase’s consumer bank, to be its senior vice president of strategy. Even is an online marketplace for personal loans, but it plans to expand into credit cards, mortgages, insurance policies and wealth management products. The fintech startup became profitable in February, according to co-founder and CEO Phillip Rosen.
Kirthiga Reddy has joined SoftBank Investment Advisors as a partner at its $100 billion Vision Fund. Reddy, who previously worked at Facebook in India and the U.S. for eight years, will be the first woman among the dozen people who help run, and make investment decisions for, the world’s largest tech fund. So far the Vision Fund has committed more than $65 billion to acquire stakes in companies around the world, Uber and WeWork among them. To help put its size in perspective, in 2016, the entire U.S. venture capital industry invested $75.3 billion.
Deloitte’s board has nominated Joseph Ucuzoglu, the head of its audit practice, to be the next U.S. CEO, essentially snuffing chances for Cathy Engelbert to get a second term. The board also nominated Janet Foutty, head of Deloitte’s consulting business, to be U.S. chairman. Both candidates still need to be approved in a vote by Deloitte’s partners and principals early next year. Engelbert became the first female CEO of a U.S. Big Four accounting firm when she took the helm at Deloitte in 2015. She will continue as CEO until her term expires in June. The board decided this past summer not to nominate Engelbert for another term, as we previously noted here. But the move stunned Deloitte’s partners, and until the nominations last week, some continued to hope that her name would be put forth for re-election.
Regions Financial has announced that Zhanna Golodryga will join its board of directors, effective Jan. 1. Golodryga is chief digital and administrative officer at Phillips 66 in Houston. As a result of her appointment, the board will remain at 15 members when Grayson Hall, the chairman and former CEO at the $125 billion-asset company, departs at yearend.
Notes from D.C.
Resignation: Pam Patenaude, deputy secretary at the Department of Housing and Urban Development, is resigning. Brian Montgomery, commissioner of the Federal Housing Administration, will become the acting No. 2 at HUD, after Patenaude leaves in January. But Montgomery won’t step down from the FHA, instead doing both jobs. Patenaude plans to return to private life in New Hampshire with her husband after a 35-year career in housing. Many characterized Pentenaude’s departure as a huge loss, particularly for the continuing recovery effort in Puerto Rico following Hurricane Maria.
Moving forward: Rep. Maxine Waters, D-Calif., has been nominated by the House Democratic Steering Committee to be the next chair of the House Financial Services Committee. She still needs to be approved by the full House Democratic caucus. Waters, the current ranking Democrat on the committee, said as chair she will focus on “ensuring that the Consumer Financial Protection Bureau is not dismantled by Trump’s appointees.” Her comments followed Kathy Kraninger’s confirmation as the new director of the CFPB.
Meanwhile in the Senate: Democrats will add two new members to the Banking Committee in January. Senator-elect Kyrsten Sinema, D-Ariz., and Sen. Tina Smith, D-Minn., will join to replace Sens. Joe Donnelly, D-Ind., and Heidi Heitkamp, D-N.D., who both lost re-election bids in November. Sinema’s assignment is likely a sigh of relief for the banking industry, which is looking for Democratic supporters of regulatory relief, as we noted here after her win in Arizona. Sinema defeated Republican Rep. Martha McSally in a heated race, but a twist on Tuesday will send McSally to the Senate anyway. McSally was appointed to temporarily fill John McCain’s seat, making Arizona one of six states with all-female Senate delegations.
Will she run?: Aides for Sen. Elizabeth Warren, D-Mass., have been quietly shopping for presidential campaign headquarters space in the Boston area in recent weeks, according to this Politico article assessing her likelihood of running and her prospects for outdoing the competition. Notably, the Boston Globe, her hometown paper, is skeptical that such a “divisive figure” can win.
$700,000 less each year: Star flutist Elizabeth Rowe is suing the Boston Symphony Orchestra for paying her significantly less than its male oboist, and the Washington Post did a fantastic article about it that is well worth reading. The case — which is the first to test Massachusetts’ new equal pay law — has the potential to affect women across the U.S. workforce who are paid less than their male colleagues. The discussion of implicit bias is particularly well done here. Did you know that studies show, when managers think they are working within a meritocracy, they are even more likely to favor men? Cue the obligatory “not us” observation: “My personal experience is that I have not seen or found gender bias within the overscale structures that I’ve worked,” said Jonathan Martin, president of the Cincinnati Symphony Orchestra, where 13 of 15 principals are men. “Where I have seen the anomalies happen, it didn’t lean toward male and female.” But the anomalies that the Post investigation found generally favored men. Among the top 25 orchestras, 11 women are principal flutists. Of the 78 highest-paid musicians at those orchestras, only five are flute players, and all five are men.
Quotas get results: In countries where large companies have an average of three or more female board members — the level at which diversity is believed to start yielding higher returns — all but one have government-mandated quotas in place, according to a new study by Egon Zehnder. One key to improving board diversity is that companies need to look beyond the traditional roster of current and former CEOs when searching for directors, said Cynthia Soledad, a co-leader of the Egon Zehnder diversity council and one of the authors of the study. Women make up just 3.7% of CEOs in the 44 countries tracked in the study. In the United States, large companies average 2.5 female directors, and representation has barely increased since 2012, Soledad said. There’s no U.S. requirement for having women on boards, though California this fall became the first state to impose quotas, as we reported here. Most large publicly traded companies headquartered in that state will need at least three women on their boards by 2021, under the new law.
In the majority: Nevada is the first state to have a female majority in the legislature, after two women were sworn in to fill vacant seats in the state Assembly on Tuesday. Women have nine of the 21 seats in the state Senate and 23 of the 42 seats in the Assembly, which works out to 51% of the seats in the legislature overall. “It is unprecedented at this point to see a majority female legislature overall,” said Kelly Dittmar, an assistant professor of political science at Rutgers-Camden.
RIP, Penny Marshall: The star of the 70’s television sitcom “Laverne & Shirley” and the director of movies such as “Big,” “A League of Their Own,” and “The Preacher’s Wife” died Monday of complications from diabetes. Among her trailblazing accomplishments, she was only the second female director to have a film get an Oscar nomination for best picture.
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