With Rose’s appointment, RBS becomes truly one of a kind. Its finance director is also a woman, Katie Murray, which is another rarity in European banking.
Although no woman has run a big Wall Street outfit, some American banks have made real strides in promoting women to top management positions. They will be well-placed to make the transition to CEO soon, possibly as soon as the next round of promotions.
Take JPMorgan Chase & Co. Its CEO Jamie Dimon has seen several potential male successors depart during his reign. But the bank’s operating committee is now 50% female, with women in charge of consumer lending, the company’s finances and the asset management unit. At Bank of America Corp., 40% of the leadership team is female, including the chief operating and technology officer.
The statistics aren’t as compelling at Citigroup Inc., where 31% of the leadership is female, nor at Goldman Sachs Group Inc., where it’s 29%. But the contrast with Europe’s titans is still striking.
At Santander 23% of managers are women, at HSBC Holdings Plc it’s 13% and it’s 15% at BNP Paribas SA. At Barclays Plc just one of its 13 executive committee members is female, while at UBS Group AG the 13-strong management team is only now gaining two more female members, bringing the total to three.
Beyond the general acceptance that businesses are nicer places to work when they’re more diverse, financial returns also improve markedly the less they’re dominated by white males with privileged backgrounds. Research from Morgan Stanley shows that shares in companies with a higher degree of gender diversity outperformed less diverse peers by 3.1% per year in the past eight years (2011-2019). The U.S. bank, whose own management team could do with acting on these findings, calculated diversity by using the number of female board members, executives, managers and employees, giving each an equal weighting.
The bigger cost to banks could come from losing out on money from asset managers, who are increasingly demanding diversity at their holdings as part of a shift toward more carefully targeted investment.
Indeed, the substantial growth of “environmental, social and governance” investments in recent years owes a great deal to finance industry leaders. As such, their own conduct should be beyond reproach. Falling behind on diversity may be another reason for investors to favor U.S. banks over their European peers.
To contact the author of this story: Elisa Martinuzzi at email@example.com
To contact the editor responsible for this story: James Boxell at firstname.lastname@example.org
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.