Does Your Bank ‘Walk the Walk’ on Diversity?

“It would be better as a matter of diversity and overall effectiveness of boards if we can get more qualified women onto boards of banks.”  —  Michael Rake, deputy chairman of Barclays Plc

Many agree that diverse leadership results in smarter, more thorough decisions, as a diversity of experiences and backgrounds puts a “bigger brain” overseeing a company. But for all the “talk”, many companies – banks included – are not walking the walk.

Sallie Krawcheck, formerly of Bank of America, opined in the Washington Post that women could actually save banking as women are “more risk-averse” and more focused on long-term goals than their male counterparts. And research conducted by Citigroup found that boards with female board members saw a 11.1% higher return on equity.

Either self- or externally-imposed (or a mix of both), the glass ceiling still exists. The 30 Percent Coalition set a goal of women holding 30% of board seats across public companies by the end of 2015 – a lofty goal, as women currently hold half that number today. Yet women as a whole are largely opposed to quotas – perhaps seeking to fill board seats on their own merits. So how to create change? ION, in a recent report, encourages directors to reflect and speak out about board composition, and request of search firms that women appear more prevalently on prospective lists of directors. If you follow Isabella Bank’s model of succession, creating a “virtual bench” within your bank for executive succession, you have the potential to create a diverse model from the ground up, grooming women and men from within for a long-term future with your bank.

And we haven’t even touched on ethnic diversity. In addition to being largely male, major bank boards remain overwhelmingly white.

When it comes to diversity, does your bank talk the talk – or walk the walk?

More diverse thoughts:

  • Are you a woman interested in joining a board, or a board looking for female leadership? ION and Women in the Boardroom are two good resources.
  • The recent issue of ABA Banking Journal contains advice for young women in banking from female CEOs.
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