February 26, 2014 9:00 pm

Banking ‘in transition’ as role models emerge

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from left: Janet Yellen, Avid Modjtabai and Anne Richards

Changing perceptions: Janet Yellen, Avid Modjtabai and Anne Richards have all broken through the glass ceilings within their own organisations

There are no women senior executives portrayed in the recent crop of films that feature the financial sector – including The Wolf of Wall Street and Blue Jasmine – says Wendy Alexander, associate dean at the London Business School.

“In the cultural context of banking or financial services, women don’t feature,” she says. “They still suffer from invisibility.”

While some might argue it is better for men to be blamed for the frothy excess and risk-taking that led to the financial crisis, stereotypes are powerful and still designate women as better suited to certain sectors within finance, such as human resources, rather than the traditionally macho environments of trading floors and wealth management.

Much is being done to counter this, with women themselves doing more to raise their profiles and to become role models, ensuring that a pipeline of women emerges from younger generations to reach the top levels of finance.

“Finance is in a period of transition and there’s a lot of soul-searching about how risk is collateralised and managed and about the role of incentives,” says Ms Alexander. “Women as role models are emerging just as there’s a real focus within finance on teams and collaboration and how to get a better alignment with strategic vision.”

There is no single way to the top and there is growing recognition that areas such as human resources no longer fit the category of being softer and fluffy with an emphasis on so-called people skills.

“Traditionally, many people went into HR because they liked working with people – but it can be the most ruthless area because they have to be utterly dispassionate in delivering unpleasant messages,” says Anne Richards, chief investment officer at Aberdeen Asset Management. “Although HR is perceived as softer, in my experience it’s tougher.”

The rise of Avid Modjtabai, former director of human resources and now senior vice-president of consumer lending at Wells Fargo, is being watched closely in the US, says Jena Abernathy, senior partner of executive search firm, Witt/Kieffer.

“It appears rare that executives – male or female – can move from what is considered a support function into an operational function, thereby setting up the ability to ascend to the top role,” she says.

Another example she gave was last year’s appointment of Mary Barra as chief executive of GM, a first for the auto industry.

Ms Barra was leader of human resources at the company which, “in many cultures, can be considered a non-starter for moving any further in the organisation”.

Another woman who might help to change perceptions is Janet Yellen, who this month became the first woman to chair the US Federal Reserve.

“If I gave anyone any advice, I would say reach across the table and learn everything about your organisation and take on tough assignments – jobs that give you a cross-functional platform – and take roles that are visible,” says Ms Abernathy.

Helena Morrissey, chief executive of Newton Investment Management and founder of The 30% Club, which aims to boost the proportion of women in the boardroom to 30 per cent, chairs Opportunity Now, a business-backed campaign for gender diversity in the workplace. It has called on women to share their work experiences to help understand why the careers of so many stall when they hit their 30s.

Early results show that 53 per cent of women aged 28-40 in financial services believe that men and women at the same level in their own organisation earn different amounts. Only 28 per cent believe they earn the same.

Just 29 per cent believe the opportunities to advance are fair and equal between women who have children and those who do not, and there is a roughly equal split between those who agree that opportunities to advance are fair between men and women and those who do not.

Meanwhile, a survey conducted last year by recruiter Robert Half found that 68 per cent of respondents thought banking, financial services and insurance organisations were doing enough to improve gender representation within senior management roles.

But the survey also found that 83 per cent of female employees who returned to work after maternity leave moved into part-time or flexible roles.

This is unlikely to change unless women are successful at advancing their careers at the same rate as their male counterparts before and after having children.

“Until this changes then we’ll still have a talent gap,” says Estelle James, director of Robert Half UK. “We’ve seen a lot change in the past 10 years and the new generation accepts women can do anything but we’ve still got a lot of catch-up to do.”

Ms Richards of Aberdeen Asset Management, who graduated in electronics and electrical engineering before earning an MBA from Insead, says she sees even fewer women in engineering than in finance and more must be done to encourage them.

“We have to remember to be generous and help women step up the ladder,” she says.

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Leadership initiatives: Organisations seek ways of improving ‘the pipeline’

A number of organisations and initiatives now exist to help greater numbers of women succeed in parts of the finance sector where they are particularly under-represented.

Fewer than 10 per cent of financial advisers are women, for example, and St James’s Place wealth management firm runs a Women’s Initiative campaign to promote wealth management as a career choice.

“It’s been a traditionally male preserve, dominated by men and the question is how to change this,” says Adrian Batchelor, director of the firm’s training academy. “Sometimes a client prefers to have a woman financial adviser and industry has to respond.”

Catherine Johnson worked in the hotel and catering sector and as a project consultant but she is now following her dream of working in finance after setting up as an adviser with the help of St James’s Place.

She sacrificed much of her personal life to pursue her studies – getting up at 5.30am and studying into the evening for the best part of a year. But she says it has been worth it to do the work she wanted to do.

“The boundaries are blurring and if you really want something, you have to focus, set goals and make it happen,” she says. “There were more men doing this in the past but it’s also about the individual and passion. It excites me and I’ve got two passions – pensions and estate planning.”

Wendy Alexander, associate dean at the London Business School, says ways of improving the pipeline of future women leaders include the MBA scholarships for women offered by Lloyds bank, which help to reduce the financial barrier for women pursuing postgraduate management education.

“Women who go into finance do it because they really want to, particularly because the fashion now is for entrepreneurial pursuits,” she says.

“Women’s leadership is at last coming of age and we believe that they are particularly strong on the team approach, thriving on collaboration and prizing diversity at work. We have made real progress in attracting more women to London Business School but we know there is still much to do.”

Aisling Meany graduated with a London Business School masters in finance in 2010 and now works in a mergers and acquisition team at an investment bank. “I don’t think there’s bias in the hiring of women and that’s the same across the City,” she says. “I love it and no day is ever the same.

“But you do need to make sacrifices to respond to deadlines, such as sometimes cancelling a holiday, and that can cause problems if you start a family. Young women can be reluctant to join investment banking.”

To have a family and do the job, women needed a very supportive partner and network. “Women work three or four years and then exit private equity or M&A but then you do see this with men too,” she says.

She has been helped by sponsors and mentors, not necessarily women, to navigate the technical and political pitfalls. “We will see more women do what were considered macho roles. The previous generation has done a lot of work breaking barriers and it’s already an easier path for our generation,” she adds.

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