Where are the women banking CEOs?
With three of Canada’s Big Six bank CEOs nearing retirement, the candidates to replace them include no women.
None of the Big Six banks has been run by a woman.
It’s fair to say that the Big Six banks set the pace for Corporate Canada in striving for gender diversity in management.
They have done so for at least two decades, aggressively promoting women into executive roles.
Yet, among their combined 416,000 employees, the Big Six banks have not one woman they deem capable of running their companies.
The paucity of women CEOs in banking signals that we’re unlikely to soon see an increase in women CEOs elsewhere in business, where gender diversity is less of a priority than it is in Canadian banking.
Canada is not unique in this paradox of corporate governance.
Women head less than five per cent of America’s more than 4,000 publicly traded banks insured by the Federal Deposit Insurance Corp. (FDIC).
And only one of those women runs a major bank. Since 2021, Jane Fraser has been CEO of Citigroup, one of America’s Big Four banks. Europe is scarcely different.
Of 62 major European banks canvassed by DBRS Morningstar, the global credit rating and consultancy firm, just four have women CEOs.
In its latest report on Canada’s banks and credit unions, DBRS Morningstar says women are better represented in executive ranks in Canada than their counterparts in the U.S. and most European countries.
But “research has shown that in countries with better (women) representation, gender diversity often stops progressing and, in effect, hits a ceiling.”
And in the past year, the number of women bank CEOs has dwindled.
Canada’s two leading women bank CEOs, at HSBC Bank Canada and Laurentian Bank of Canada, were in recent months replaced by men, when HSBC was acquired by Royal Bank of Canada, and Laurentian dismissed its woman CEO after a major computer system outage.
Last year, Vancouver City Savings Credit Union (Vancity), a formidable retail bank in the Lower Mainland, chose a man to replace its woman CEO.
Earlier this month, RBC terminated its woman chief financial officer, a potential successor to CEO Dave McKay, after an internal investigation found she had an “undisclosed close personal relationship” with another RBC employee that contravened the bank’s code of conduct.
Against that thinning of the ranks, Manulife Financial this month appointed Katy Boshart as CEO of Manulife Bank, which has $29 billion in assets.
And Gillian Riley is CEO of Tangerine, Scotiabank’s online bank.
As they rise in the banking hierarchy, women often are assigned to senior posts that don’t drive growth in the banks’ revenues and profits. Those jobs include human resources and legal and regulatory compliance functions.
And mid-career quitting is as much as 30-per-cent more common for women at banks than elsewhere in the corporate world, according to DBRS Morningstar.
That is due to the gender pay gap, promotion practices that lack transparency and inflexible working conditions.
Why are women frozen out of banking’s profit-centre posts?
It can’t, or logically shouldn’t, be a question of women’s ability to manage large financial enterprises.
Christine Lagarde runs Europe’s central bank, the ECB, after serving as France’s finance minister and then heading the International Monetary Fund (IMF).
The finance ministers of Canada and the U.S. are women, Chrystia Freeland and Janet Yellen, respectively.
Together, Freeland and Yellen, also the first woman to head the U.S. Federal Reserve Board, have stewardship of $30.2 trillion (U.S.) in economic activity, far eclipsing any commercial bank in size and complexity.
Deborah Orida is CEO of the Public Sector Pension Investment Board (PSP), one of Canada’s biggest pension funds, with more than $243 billion in assets.
And Suyi Kim runs one of the world’s biggest private equity funds as head of PE at the Canada Pension Plan Investment Board (CPP Investments), where she manages about $146 billion in assets.
There are exceptions to the practice of commercial bank boards not grooming women for the top job, but they’re few.
At JPMorgan Chase, the world’s biggest bank, three women are among the candidates to succeed longtime CEO Jamie Dimon, 68.
They are Jennifer Piepszak, coCEO of JPMorgan’s commercial and investment bank; Marianne Lake, CEO of its consumer and community bank; and Mary Erdoes, CEO of asset and wealth management.
Dimon’s latest shareholder letter, published this month, is a blueprint and a manifesto for “diversity, equity, and inclusion” (DEI).
Dimon is an unapologetic champion of DEI at a time when it has come under fire from those who think business should stick to profit maximization.
Dimon says his bank’s practice of expanding economic and leadership opportunities for women and minorities “lead(s) to more innovation, smarter decisions and better financial results for us and for the economy overall.”
You could take Dimon’s word on that. Or check the price of JPMorgan’s stock, which has gained 264 per cent in the past decade, compared with the 175 per cent increase in the S&P 500.