Sallie Krawcheck, the former Bank of America Corp. and Citigroup Inc. executive, said women haven’t climbed Wall Street’s corporate ranks after the 2008 credit crunch because men tend to hire people like themselves when facing a crisis.
“What the research shows is that when we’re under periods of stress,” executives are more comfortable with candidates who “look like” them, Krawcheck said today in an interview on Bloomberg Television. “It’s not that we’ve even gone sideways as we have in corporate America, we’ve gone backwards.”
While women have risen to lead companies in other industries, including at Hewlett-Packard Co. and General Motors Co., there are no female chief executive officers at the biggest Wall Street banks. Krawcheck, 49, is the owner of 85 Broads Unlimited LLC, a network that promotes women as business leaders.
She previously served as head of wealth management and chief financial officer at New York-based Citigroup and later ran wealth management for Bank of America, based in Charlotte, North Carolina. Current female senior executives on Wall Street include Ruth Porat, the CFO at Morgan Stanley. Previous CFOs at investment banks included Erin Callan of Lehman Brothers Holdings Inc.
“What I saw when I was on Wall Street, it’s not, ‘Let’s get rid of people who are different than us because they’ve got cooties,’” Krawcheck said. “It’s more, ‘Yeah, I know diversity adds to business results in theory, but we are in crisis mode and I need that person who I can trust today.’”
Five years after the crisis, women rarely are promoted to top positions. This month Shelley O’Connor, who runs New York-based Morgan Stanley’s private bank, became only the second woman on the firm’s 16-person operating committee, which includes Porat. Goldman Sachs Group Inc. named Sarah Smith to its 34-person management committee this month, which now includes five females.
Women will rise to more prominent roles after financial firms learn to cater to them more, Krawcheck said.
“Women are going to college and graduate school at a greater rate than men, women are starting businesses at a greater rate then men, and women are unhappy with the financial-services industry,” Krawcheck said.