What Happened to Wall Street's Women?
Where are the heroines of Wall Street? They were so conspicuous when I entered the workforce—the " tiger lady" in Baby Boom (1987) who starts a multimillion dollar company while raising a child, or the Working Girl (1988) who rides the Staten Island Ferry and orchestrates a colossal M&A transaction. The women of my generation bounded onto Wall Street, assured we could raise our children while making millions (and, we did). The future looked bright. The ranks of Wall Street women swelled as we climbed the ladder, extending a hand up and down to other women. Then, something started to go terribly wrong.
A decade ago, the messaging for women on Wall Street started to shift ( as in our popular culture). The heroines and hopefulness disappeared, replaced by cautionary tales of work/family balance ( trading and trade-offs) and the perilous work environment, so unsafe for women that Nina Godiwalla's new book warns: The Devil Wears Pinstripes. The new messaging tells young women: Stay Away! And it's been effective. In the last decade, 141,000 women left Wall Street (389,000 men entered). More alarming, the number of young women (ages 20-24) entering Wall Street dropped an astounding 22 percent!
I don't mean to single out Godiwalla, who spent a total of two years at Morgan Stanley (1997-1999); but the commercialization of gender discrimination does not benefit young women. Once in the pipeline, many capable women succeed, excel, and enjoy high-paying careers. In fact, Wall Street, an industry measurable by the numbers, has a natural flow toward meritocracy—the majority of managers look at men and women and only see green.
Notice I said "the majority." Where the system breaks down is not of financial services, the industry. It's the bad apples—the individuals guilty of gender bias in leadership roles. Our media has yet to examine or hold accountable managers whose own inadequacies cost shareholders, and more recently taxpayers, billions of dollars. Even after numerous studies concluded that the lack of women's representation was a major factor in the meltdown. Instead, we've let the bad apples conveniently hide behind the messaging—they just can't find female talent—it's not their fault their team is all men. Let me explain.
Just so happens, I partly overlapped with Godiwalla in her years at Morgan Stanley, although we were in different divisions. I worked in the Fixed Income Division (FID), on a trading floor where there was no tolerance for words or actions viewed as sexist or even crass. I was the highest paid person in my department and the first to leave the office at night (only once my group head asked: "Do you think you could stay past 5:30 once in a while?" I smiled and zipped my coat: "Nope."). My boss did not look at me and think: 'I hate having mothers who leave early,' he looked at me and saw green: "Amy makes us loads of money." Wall Street, the meritocracy.
Wall Street, an industry measurable by the numbers, has a natural flow toward meritocracy—the majority of managers look at men and women and only see green.
Occasionally, I'd have meetings with folks in corporate finance, part of the Investment Banking Division (IBD), where Godiwalla worked. True, I did not know the inner- workings in her department. I did, however, have frequent interaction with women in all divisions. The horror stories were not coming from IBD, but rather from the firm's Institutional Equity Division (IED), headed by Vikram Pandit.
I was hardly surprised when a gender discrimination case brought in 1998 by one saleswoman in IED would later balloon into a class action by close to 100 women, all in IED (none from FID or IBD). The class action resulted in a $54 million settlement, one of the largest ever against a brokerage firm.
Unfortunately, the media embraced the 2004 settlement as further evidence to make their case that Wall Street, in this case Morgan Stanley, is not a place for women. There was a complete failure by the media in not examining or holding accountable Pandit, who was the head of IED at the time, for gender bias.
Of course the lack of accountability had consequences. In the coming years, Pandit was one of the primary parties who demanded that Morgan Stanley fire its highest-ranking woman. He later joined Citigroup, forcing out the highest ranking woman there. More recently, he publicly clashed with the female head of the FDIC. With his failure to institute gender balance and meritocracy, under Pandit's leadership as CEO, Citigroup's stock has plunged 87 percent ($34.44 to $4.45). Meanwhile, Godiwalla is busy peddling a book vilifying Morgan Stanley and Wall Street.
Who gets hurt by this? We all do.
We are losing a generation of young women in the field of financial services, the future leaders on Wall Street. Gender imbalance leads to sub-par decision making, and potentially sowing the seeds to our next financial meltdown.
There are solutions, one of which is quite simple: dump the bad apples—managers guilty of gender bias who stand in the way of meritocracy. Their personal shortcomings are bad for business. Boards of directors must use gender diversity as a measure in choosing their leadership in two regards: more women and men able to work with women.
The second solution is for those of us who succeeded on Wall Street to take back the messaging. As part of my organization's on-campus outreach, I give presentations to college women: "A Girlfriends' Guide to Making it on Wall Street: Top 10 Myths and Musts." When I first walk in and tell them, "I loved working on Wall Street," I can see they are processing whether to be in awe, or if I'm a psychopath. By the end of the conversation, I've opened minds and some women plan to go into sales and trading. Even more ask me to mentor them or help them find mentors.
Once we get rid of the bad apples and return to gender balance, Wall Street will naturally flow toward a meritocracy and our financial system will less prone to turmoil. Simply good business.
Amy Siskind is the President and Co-Founder of The New Agenda, an organization dedicated to improving the lives of women and girls. Siskind has appeared on CNN, Fox, and PBS. Siskind also writes for HuffPo and MORE.