Wall Street’s Glass Ceiling Stays Intact After Wells Fargo Hire
Wall Street’s Glass Ceiling Stays Intact After Wells Fargo Hire
(Bloomberg) -- As Wells Fargo & Co. embarked on a search for a new chief executive officer this year, it had the rare opportunity to make history -- and perhaps appease its lawmaker critics -- by appointing the first-ever woman to lead a major U.S. bank.
Instead, the scandal-plagued lender opted for previous CEO experience in picking industry veteran Charlie Scharf.
Wells had considered female candidates in a process overseen by the only major female bank chair, Betsy Duke. The bank held talks with Bank of America Corp. executive Cathy Bessant. Citigroup Inc.’s Jane Fraser was also considered. And the option of keeping interim chief Allen Parker in place was seen as a path to elevating Wells Fargo’s own top female executive Mary Mack in the near future.
Men hold 95% of the top jobs at the biggest U.S. companies, and they’re particularly dominant in banking. No woman has ever led a major U.S. bank and the same was true of the top firms in the U.K. until just this week when Royal Bank of Scotland Group Plc appointed Alison Rose as its new CEO. Companies most often seek out female leaders when they’re struggling, research has found, a phenomenon known as the glass cliff.
Scharf comes to the job having already run Visa Inc. and Bank of New York Mellon Corp. For one of the major banks to finally break the industry’s glass ceiling, it will have to give an opportunity to a female executive with less of a track record as a financial CEO. Bank leaders are increasingly being asked to answer for the lack of diversity at the highest levels.
Scharf himself was present at an April congressional hearing when Democrat Al Green called out the CEOs from major Wall Street firms for their homogeneity: “The seven of you have something in common. You appear to be white men,” he said. “If you believe that your likely successor will be a woman or a person of color, would you kindly extend a hand into the air.”
On Friday, Green responded to Scharf’s hiring by saying, “while he may be eminently qualified in many areas, it is regrettable that Wells has not moved to the point that they can find a capable, competent, qualified person other than a white male. I would ask that Wells be the last to continue this legacy.”
When banks have ethical missteps, critics often point to lack of diversity and group think as part of the problem. A recent study also found that shareholders react positively to gender diversity.
“Wells Fargo’s shares have been down, especially in light of their scandals, and they haven’t really recovered,” said Kabrina Krebel Chang, a clinical associate professor of business law and ethics at Boston University. “Adding a woman to their high executive ranks, and a woman as CEO, according to research would have really given their share price a boost.”
--With assistance from Daniel Flatley.
To contact the reporter on this story: Gwen Everett in New York at geverett10@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Rebecca Greenfield
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