When you picture a traditional investment bank, the first image that tends to come to mind is the caffeine-loaded, sleep-deprived, suited-and-booted male analysts on Wall Street. You might also think of the manic trading floors full of angry men, profanity, and prostitutes, that are dramatically portrayed in films such as The Wolf of Wall Street. However, the likelihood is that you probably won't think of high-ranking female professionals or a racially diverse utopia. Why? Because traditionally, there hasn't been enough gender or racial diversity in the financial workplace, both in cinematic depictions, as well as in reality...
Let's start with Jane Fraser. Last year, it was announced that Fraser would become the first female CEO of a Wall Street bank. Due to take over later this month, from the incumbent Chief Executive of Citi Bank, Mike Corbat, her promotion will make history and break the glass ceiling. But, why has it taken until now for a woman to take the top job at a top-tier bank? Why is it that a Google search of almost any well-known global bank's Board of Directors or Executive Committee still returns an almost homogeneous collection of white men?
For decades, prejudice, gender discrimination, and unshakeable stereotypes have barred women from the most prestigious boardrooms of the financial world. The #MeToo movement, first started in 2006 by Tarana Burke, but reinvigorated in 2017, brought workplace sexual abuse and discrimination into the spotlight. Banks and other financial companies have since been forced to re-examine the morality behind their all-white, all-male workplace demographic, which has prevailed since the inception of the New York Stock Exchange in 1817. As such, there has been an intense recruitment drive for able females to join these firms, although, as shown by the infographic below, predominantly in more junior positions.
So, are all these diversity drives a PR ploy? It's hard to say - it's not as if females have suddenly become more financially literate, intelligent, or capable of doing the job in the last few years. However, it is clear that the financial world is becoming more accessible and welcoming to all. An increasing number of females are enrolling in finance, economics, and accountancy degrees at universities and colleges globally, and, even within our Student Investor community, we're seeing more and more girls take an interest and wanting to write articles! It's also fantastic to see initiatives and programmes at these banks to encourage and empower [young] women to break into the financial world.
We can only commend Jane Fraser. To have achieved what she has done in her career, and to have been appointed as the inbound Citi Bank CEO, is nothing short of remarkable. Nevertheless, it must remain a concern that it has taken this long for such a seismic change, and even more worrying that a female CEO appointment should even be considered "breaking news." It is shocking that, despite the recent changes to amend what should have been done years ago, women make up only seventeen per cent of FCA-approved individuals - a figure "remarkably unchanged" since 2005.
But, while banks are pledging to hire more females, especially among their junior cohorts, how are they faring in terms of racial diversity? Well, not so well.
In a Q&A with Lloyds Banking Group's Destynee Onwochei last year, the Project Manager revealed that black professionals only constitute one per cent of the bank's demographic composition. It is a bewildering statistic that reinforces the enduring stereotype that high-level banking jobs have been, and remain, reserved only for white males. While CEO Antonio Horta-Osório has pledged to increase the percentage of black professionals at the firm to three per cent by 2025 (in senior roles), it is hard to argue that the banking system is a hub of diversity. In a diverse industry, there should be no need for racial, gender, and sexuality targeting, but this is evidently not the case in the financial world at the moment.
Likewise, Goldman Sachs recently announced that, over the next five years, it wants seven per cent of its vice-presidents to be Black and nine per cent to be Latino. David Solomon, CEO of the bank, also said the bank was aiming for 40 per cent of its vice-presidents to be female. From where the industry has been over the last few decades, this is a vast improvement. However, it is not enough.
Here's a couple of thoughts to leave you with:
1) It's terribly sad that banks and financial firms are now having to implement recruitment quotas and targets to ensure that they cater to diversity and inclusivity requirements. (You can find out which banks have what targets in this Reuters article). In truth, had there been such a brilliant array of diversity in the first place, these would have been unnecessary.
2) A study by the U.S. House Committee on Financial Services discovered that companies with the highest level of diversity in terms of racial/ethnic composition and gender demonstrate significantly greater profitability than their counterparts. So, if you're a bank, diversity is surely the best way forward! What's stopping you?
3)We can only hope that one day, there won't be a need to tick a box on an application form that differentiates the white heterosexual males from the black non-binary Buddhists, because people won't be discriminated against, and they'll be judged with complete equity based on the strength of their application. However, unfortunately, it is clear that we're not at that stage just yet.