Her appointment as the CEO of Citi was historic. And after consistent pressure to improve diversity and inclusion, Wall Street will be hoping that Jane Fraser is a catalyst for change.
Wall Street has seen many changes over the years, from public admiration to vilification, friendly and hostile politicians, to new and emerging corporate giants – in their world, things are fast-paced and constantly changing. On Wall Street, adaptability is a prized asset. You would think then, that for a community which prides itself on the ability to adapt to the world around it, Wall Street would be a beacon—or at least far ahead of others, on matters of diversity and inclusion. Not quite. But with the appointment of Jane Fraser, things may just begin to change.
In February, she’ll take over from Michael Colbart, who’s resigning after 8 years at the helm of the bank. She’ll become the first woman CEO of a large financial institution in the United States. To Jane Fraser, the attention surrounding the fact that she’s a woman might be annoying—she wasn’t appointed based on her gender, but her qualifications. And on qualifications and merit alone, she appears well suited to the role.
She’s been at Citi for 16 years, and within the bank and the financial industry, she’s highly respected. At the height of the financial crisis, she was instrumental in ensuring the banking giant survived the big crash. As the head of strategy and mergers and acquisitions, she carried out over 20 deals in 18 months and oversaw the bank’s consumer operations in Germany, Nikko Cordial Securities and the brokerage firm Smith Barney.
After graduating from Harvard, she faced a choice: join Goldman Sachs, where in her own words women looked “rather scary” and “had to dress “almost like a man” to succeed, or McKinsey & Company, where she could achieve a more balanced routine. She chose the latter; and two weeks after having a child, her boss called – she’d made partner. To Fraser, multitasking is part of the job, and working on several projects is what she’s good at.
She’s also worked in different parts of the bank’s operations, making her familiar with the bank’s global operations. By working in and leading different parts of the bank’s global operations, she’s become familiar and with the bank’s global operations.
In addition to leading the Corporate Strategy and Mergers and Acquisitions group, she led the bank’s operations in Latin America and was promoted to the role of president and head of global consumer banking – paving the way for her announcement as CEO.
She’s well qualified for the job, making the historic nature of her announcement, and the focus on the fact that she’s a woman, slightly unfair. But when you consider the lack of diversity amongst Wall Street banks, especially in senior positions, the historic nature of her appointment seems appropriate. In 2019, at a hearing of the House Financial Services Committee in April, one lawmaker asked CEOs of Wall Street’s Banks (including Mr Corbat) – from Goldman Sachs, BNY Mellon, JP Morgan Chase and State Street – whether they thought a woman or ‘person of colour’ would be their successor. None of them did.
And when Jane Fraser becomes CEO, she won’t have any female counterparts among the 10 largest U.S. banks. In fact, she’ll be joining a very small group of female heads at large corporations. In the U.S., out of 500 chief executives, only 31 are women; and amongst senior executives, women account for 26 per cent.
On diversity, Wall Street and corporations in general, have made some progress, but there’s still a long way to go.
Diversity increases productivity, innovation and ultimately, profits
As well as the case for fairness and equality of opportunity, there’s a strong business case for diversity and inclusion in the workplace. It allows for a difference in opinions, ideas, and skillset. Innovation and adaptability are, by all accounts, critical to the success of businesses and corporations. It follows then, that diversity – not just in terms of gender, but race, sexuality and backgrounds – should be high on the agenda.
It gives companies and firms access to a greater talent pool –improving profitability and collaboration. Increasingly, considering their career options, millennials look for employers with a strong record on diversity – according to PWC, 85% of millennials it’s important to them to work for diverse and inclusive companies.
Diversity also has a positive impact on profitability. According to McKinsey, gender-diverse companies are 21% more likely to attain ‘above-average profitability’.
Of recent, under increased pressure and spotlight following worldwide protests, banks, law firms, sports clubs and tech companies have made renewed efforts and commitments to increase diversity.
Large and global banks including Goldman Sachs and JP Morgan Chase made pledges to “do more” to increase diversity and work towards closing the gender pay gap. Global law firms such as White & Case, Clifford Chance, Skadden and Freshfields have all made renewed pledges to increase diversity. And tech firms, who have built a reputation on being innovative, have also made diversity pledges and have set aside large sums of money to increase fight ‘social injustice’.
Companies and firms are also beginning to implement key changes, such as flexible working, which allow many people, especially women, to balance family life with a corporate career. And the requirement to work from home, during the COVID-19 crisis, would have made a positive contribution to the argument that working from home doesn’t make workers any less productive.
With all these pledges and changes, you may think that progress is rapid and positive – but the appointment of Jane Fraser as the first woman CEO of a Wall Street bank shows that there’s still a long way to go.
When she assumes control over Citi in February, she’ll have a lot to ponder over: a global pandemic, a mistaken $900 million transfer and global upheavals continue to affect the bank’s global operations. In addition, she’ll also have the added responsibility of being a role model to thousands of women hoping to replicate her career trajectory.
Within her own bank, there’ll be pressure on her to be a catalyst for change not just in Wall Street, but the wider financial sector. Her career to date, her commitment to gender equality and the respect she commands suggests that this woman CEO will do just fine.
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