Bloomberg News

Women Frozen Out of European Bank Executive Suites as Nouy Rises

February 19, 2014

Single Supervisory Mechanism Chair Daniele Nouy

Single Supervisory Mechanism Chair Daniele Nouy came to the ECB job from the Bank of France, which she joined in 1974. Photographer: Daniel Roland/AFP via Getty Images

Daniele Nouy may find herself the only woman in the room in meetings with Europe’s top bankers.

The 63-year-old, who took over last month as the head of the euro area’s newly created banking watchdog, is charged with overseeing the region’s largest lenders, where senior-level female executives are a rarity.

Women hold less than 10 percent of the top management posts at the euro-area’s biggest banks, and the pace of their rise to the corporate suite has been slower than in industries such as consumer goods and energy, McKinsey & Co. data show. When they are on banks’ executive boards, women often oversee support functions, such as human resources, rather than revenue-producing units.

While some of the euro region’s biggest lenders, such as Deutsche Bank AG and BNP Paribas SA, have programs in place to increase gender diversity, progress in bringing women into the upper ranks of management has lagged behind the U.S.

“We’re not going to wipe out these invisible barriers so quickly,” said Karina van den Berg, who’s in charge of Royal Bank of Scotland Group Plc’s Dutch markets and corporate banking and is a member of the Amsterdam-based unit’s management team. “Choices to fill positions often follow a subconscious bias: Men are seen as a safe pair of hands and women as a gamble.”

The European Central Bank’s nomination of Nouy at the banking regulatory body, and Sabine Lautenschlaeger’s joining the ECB’s all-male executive board last month, are recognition of the under-representation of women, who make up about half of the 18-country euro area’s population. Nouy, who declined to comment for this article, came to the ECB job from the Bank of France, which she joined in 1974.

Boys’ Club

While five of the 25 euro-area banking regulators attending her first meeting last month were women, the lenders they supervise remain long on gender-equality promises and short on action, economists, executives and consultants said.

“The situation is almost frozen at the top,” said Helene Perivier, a gender-issues economist at France’s Observatory for Economic Trends. “Anti-discrimination rules are more credible in the U.S., forcing top financial institutions to provide strong signals by sharing powerful jobs to avoid sanctions.”

An old-boys’ network that keeps top jobs for men, and women dropping out for family reasons, have capped the number of female executives at the top of Europe’s banks even though women make up about half their staff, gender-issue experts said.

“The banking industry prides itself on a fairly masculine set of leadership criteria,” Avivah Wittenberg-Cox, head of 20-first, a London-based consulting firm focused on gender issues, said in an interview. “You’re supposed to be strong, silent, and aggressive. These are stereotypes engrained in banking. The culture is very hard to change. We’re struggling in Europe.”

Not Enough

Marina Natale, the chief financial officer of Milan-based UniCredit SpA (UCG) and Banco Santander SA (SAN)’s Ana Patricia Botin, chief executive officer of the Madrid-based lender’s U.K. operations and Chairman Emilio Botin’s daughter, are among a small number of top women executives in the region’s banking world.

The euro area’s banks, which had almost no top women executives at the onset of the financial crisis, have made some progress. At the region’s 10 largest banks by market value, women now hold about 5 percent of key executive jobs, according to their filings.

That’s a third of the proportion at their 10 largest U.S. counterparts, which have 16 percent. Germany’s Deutsche Bank, Europe’s largest investment bank by revenue, and France’s Credit Agricole SA (ACA) have no women at the highest management level. Santander, Spain’s largest bank, has two women on its more than 30-member top management team, including Ana Patricia Botin.

Women Rising

By contrast, women occupy a quarter or more of the top executive teams at Wells Fargo (WFC:US) & Co., New York-based JPMorgan Chase & Co. and Bank of America (BAC:US) Corp., the U.S.’s largest banks.

While there’s no woman CEO at a top 10 U.S. lender, women head up two of the four operating units at Wells Fargo, the world’s largest bank by market value. Avid Modjtabai, who led the technology side of Wells Fargo’s purchase of Wachovia in 2008, now oversees more than 70,000 employees at the San Francisco-based bank’s consumer-lending unit.

Ruth Porat, 56, became New York-based Morgan Stanley’s executive vice president and chief financial officer four years ago after serving as global head of the firm’s financial institutions group and advising the U.S. Treasury in its rescue of Fannie Mae and Freddie Mac.

At JPMorgan, Marianne Lake is the CFO, while Mary Callahan Erdoes is head of its asset-management business, which oversees $1.6 trillion.

Morgan Stanley (MS:US), owner of the world’s largest brokerage, last month promoted 153 employees to managing directors, 27 percent of them women, the highest proportion ever.

Crisis Mode

Sallie Krawcheck, 49, a former executive of Charlotte, North Carolina-based Bank of America and New York-based Citigroup Inc., said last week that women haven’t climbed Wall Street’s corporate ranks after the 2008 credit crunch.

“What I saw when I was on Wall Street, it’s not, ‘Let’s get rid of people who are different than us because they’ve got cooties,’” Krawcheck said in a Bloomberg Television interview. “It’s more, ‘Yeah, I know diversity adds to business results in theory, but we are in crisis mode and I need that person who I can trust today.’”

Still, in 2012 women made up 35 percent of staff and about 16 percent of senior executives and managers at investment-banking and securities-dealing firms, data from the U.S. Equal Employment Opportunity Commission show. The data also showed that women represented 58 percent of staff and 30 percent of senior executives and managers at U.S. commercial-banking firms.

“A major value base is required, and that’s what the U.S. has accomplished,” said Alessandra Perrazzelli, Barclays Plc’s country head for Italy, who started her career as a lawyer in New York. “More talented women need to be promoted and bosses need to really understand the benefit of creating mixed teams.”

Gender Quotas

Europe’s banks say they’re making an effort. France’s three largest banks and Germany’s top two lenders have self-imposed quotas. Deutsche Bank wants to raise the proportion of women in senior positions to 25 percent by the end of 2018 from 18 percent in 2012. The Frankfurt-based bank has no women on its seven-member management board, its key decision-making body.

BNP Paribas, France’s largest bank, plans to increase the percentage of women in its top 2,200 management jobs to 25 percent by the end of this year from 21 percent in 2012.

In 2011, Marie-Claire Capobianco became the first woman to join BNP’s 17-member executive committee. She runs the bank’s 2,200 branches in France with more than 30,000 employees. Seven of BNP’s French retail-banking division’s 12-people executive committee members are women, she said in an interview.

“Change clearly is underway,” she said. “About four years ago, you wouldn’t have talked the same way about these issues.”

Skilled Women

Societe Generale SA, France’s second-largest bank, and Italy’s UniCredit, are among the few European banks with two women on their most senior management teams. Paris-based Societe Generale has 11 women on its broader management committee, up from six at the start of 2009.

CEO Frederic Oudea set up a Diversity Board at the end of last year to monitor advancements in providing equal opportunities and improving gender balance. More than 60 percent of Societe Generale’s staff and new hires are women.

The absence of women at the top has little to do with skills. As in the U.S., the number of female college graduates in France, Italy and most other European nations is on par with men aged below 44, data from the Organization for Economic Development and Cooperation show.

Female Grads

While fewer women than men get engineering certificates, business and social sciences programs -- from where banks usually draw their hires -- have a balanced split, according to OECD data.

At the London School of Economics, the number of undergraduate women and men in the 2011 to 2012 period was almost the same. HEC, the business school based outside Paris, has had at least 42 percent of women among its students since 2006.

Even when European banks hire women, efforts to get them into management positions tend to be slow, says Herminia Ibarra, a professor of organizational behavior at business school INSEAD, based near Paris.

“There are not enough people filtering through,” she said. “Senior management is not necessarily sticking its neck out for some of these women coming through the pipeline.”

Also, with the hard-charging banking milieu not always conducive to a work-family balance, women often rein in their ambitions for top jobs, said Camille Beraud, who coordinates Credit Agricole’s regional banks’ human resources.

Girls’ Club

“Women sometimes consider their activity as a supplemental salary” for their families and don’t seek out senior jobs, she said. Credit Agricole, whose member entities control France’s third-largest listed lender, has four women CEOs at its 39 regional banks. “We’re trying to remedy this situation.”

Women may need an Old Girls’ network.

“What women must do when they reach top positions is send the lift down to bring up another woman,” said Barclays’ Perrazzelli.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Vidya Root at vroot@bloomberg.net


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