Diversity is a word which is bandied about with some consistency in today's corporate world. Most firms will speak of their 'open recruitment policy' or their commitment to social corporate responsibility. To what degree has the landscape of the corporate world really changed over the last few years, however? More to the point, to what extent, if any, has the world of banking and finance been able to shake off its unwanted 'Wall Street' reputation as a testosterone-fuelled ground of large egos, high salaries and an overriding lack of women? Female bankers have traditionally been few and far between and the consensus on female employees hasn't changed dramatically over the past two decades as the financial industry has significantly swelled (and subsequently deswelled) its numbers. Whilst women make up a notable proportion of middle and back office roles such as the operations and legal departments of major banks, they remain glaringly absent from front office roles such as sales and trading and M&A. Part of the reason has been the difficulty of employers within the banking sector to dissipate the long-held clichés about the world of banking which are suggested above.
What is becoming clearer, however, is that despite their relatively low penetration when compared to other industries such as Law and the media, those who do make it into the industry are no less successful for it. A recent table compiled by the online banking magazine, USBANKER, lists the 25 most powerful women in banking for 2008 according to research conducted into the performance of senior female executives across the US's top banks. What it demonstrates is capability of female managers who have largely outperformed their male counterparts in what has proved to be a year of disastrous performance and large write down by most major international banks.
J.P. Morgan has the most representatives on the list, occupying both the first and eleventh spots. Top of the list is Heidi Miller who is CEO of the firm's Treasury & Securities Services in New York, who holds the number one spot for the second year running after posting record profits for the division during four of the past six quarters. Its other representative heads up JP Morgan's US Private Bank, the largest private bank in the country.
Such impressive returns during the current climate may appear surprising, however, evidence from a study by French business school, Ceram, entitled 'Global Financial Crisis: Are women the antidote?' suggests there is a link between the female representation of a firm and its performance during times of financial instability. The study indicated that firms with a higher proportion of female managers and directors have demonstrated higher resilience (i.e. less dramatic losses) over the course of the last year. Whether it be due to the greater ability of female directors or rather just plain luck, the report found that generally speaking, the fewer female managers a company has, the greater the drop in its share price since January 2008.The author of the report puts forward the argument that female directors are, generally speaking, less risk averse and as such, have avoided the mistakes made by many of their male colleagues in the lead up to the credit crunch. He cites French bank BNP Paribas last January. Compare this to Credit Agricole, the largest retail banking group in France, whose share price has dropped by 50% during the same period and only 16% of whose managers are female.
In light of this evidence, it is possible that several firms will start to look to take advantage of the downsizing and reshuffling of departments and trading floors by recruiting more female employees into key areas of their front-office operations. This strategy has clearly been embraced by the soon to be inaugurated US president who recently appointed Hilary Clinton (often though to be the brains behind the successful presidency of husband Bill) as his Secretary of State. Part of the problem will inevitably be persuading the crop of female graduates that investment banks are no longer the chauvinist, machismo environments they have long been portrayed as being.