Fearless girls: How State Street and the largest custodians are addressing the gender imbalance in senior leadership roles

State Street's unveiled the Fearless Girl statue in London this week, but what are the custodian and its industry counterparts doing internally to address gender inequality?

By Jonathan Watkins

“When I started here there were no EVP women in Europe,” says Maria Cantillon, executive vice president, global head of sales, State Street. “I’ve lost count now – which is a good thing.”

After unveiling the Fearless Girl statue – which depicts a defiant girl staring down the Wall Street bull – in New York in 2017, State Street’s asset management arm became one of the industry’s driving forces in the fight towards gender equality within the financial markets.

State Street Global Advisors said that, starting in 2020 in the US, UK and Australian markets, and in 2021 in Japan, Canada and Continental Europe, it will vote against the entire slate of board members on the nominating committee if a company does not have at least one woman on its board, and has not engaged in successful dialogue on its board gender diversity program for three consecutive years.

Since then, 445 of 1,265 companies State Street Global Advisors identified as not having a single female board member have responded to the call to action by either adding a female director or committing to do so.

But what of State Street’s internal initiatives to address the imbalance of men and women in senior leadership positions across its businesses, including securities services?

“We’ve come a long way and that’s only in the last five years. I can tell you now, because we’re edging more towards the 30% and when you’re getting to that percentage that’s making a difference,” adds Cantillon, who has been nominated for Global Custodian’s Industry Person of the Year award later this month. “I believe we have five women on our global management committee. We’re nearly 50/50 in Europe, those results are probably over the past 18 months.”

The 30% target is in reference to the UK Women in Finance Charter aimed at having at least 30% of women in senior roles by 2021, which the four biggest custodian banks in the world – JP Morgan, Citi, BNY Mellon and State Street – all signed up to.

Mentoring programs

Citi informed Global Custodian that it is now at 21%, up from 19% in 2017, adding that it is “on track” to meet the Charter target by its deadline. The bank has also set up 20 Women’s Networks in EMEA which act as the on-the-ground voice of the employee providing insight into the lived experience and challenges of women at Citi. The bank said these networks inform the goals and objectives of the Women’s Affinity globally – its worldwide diversity strategy.

JP Morgan and BNY Mellon also outlined a range of initiatives including parental support, mentoring and recruitment schemes – the former with a Re-Entry program for those who had left the workforce, while BNY has its 30% Club and Mission Include.

The Citi Women’s Networks act as the on-the-ground voice of the employee providing insight into the lived experience and challenges of our women which informs the goals and objectives of the Women’s Affinity globally. In EMEA there are 20 Women’s Networks that are open to all employees

The financial services industry is notorious for its gender inequality in senior roles. Making a major culture shift in an organisation with history stretching deep into the previous century is often compared with turning an oil tanker. It’s a long and arduous process, requiring everyone on board to be on the same page in order to reach the goal.

However, this does seem to be happening, even if the adequacy of the pace is debatable.  The initiatives the big four custodians highlighted have had a positive impact as gender pay gaps are decreasing and the number of women in executive positions increases.

“We used to take it on our shoulders to mentor women,” adds Cantillon. “We would find people with incredible talent and showcase them around the firm so that when jobs came up they were on their list, but it wasn’t until the middle of last year that we said ‘enough, there’s 80 of us [in the management team], we need to all do it’. So we got the men involved in the process and mentoring as well.”

“From the mentees we take on, we hope that our 80 will take on 80, then that 80 will take on 80, and so on.”

Everyone’s responsibility

The engagement of men in the process is crucial, as exemplified in a talk by Michael Kimmel, Professor of Sociology and Gender Studies at Stony Brook University, at the global banking conference in Sibos two years ago.

His view was that we cannot fully empower girls and women without engaging boys and men. Kimmel urged men to consider their relationships with wives, daughters, mothers and sisters outside of the work place and lean on those feelings towards them in how they interact with, and perceive, women in the workplace.

A Global Custodian survey of women in hedge fund operations in 2016, showed that the main barriers to greater female participation were perceived as being male attitudes, hedge fund culture, education, career progression opportunities and flexibility around working hours and family.

‘Male attitudes’ – or answers along those lines – were cited in 52% of responses. Comments included “it’s a man’s world”, “the exclusion of women from the male only club” and “male senior management still do not have full support for women to be in senior roles in the business world”.

Both JP Morgan and BNY Mellon highlighted to Global Custodian the programs they have rolled out to help working parents.

JP Morgan launched Parents@JPMC last year, a global, firm-wide initiative to promote parental programs and provide practical support and tools to help working parents, including for the point at which they return to work after parental leave. A spokesperson said the goal is to make it easier for parents to find information and resources specific to their needs, as well as to create opportunities to meet and learn from other parents at the firm. 

BNY Mellon, meanwhile, enhanced its support of working parents with a new Parental Buddy programme, an online parental leave toolkit, while also encouraging the take-up of shared parental leave and a half-day seminar for new parents.

BNY also created a shadow executive committee for its UK bank to bridge the diversity gap, which mirrors the existing UK bank executive committee and analyses, debates and decides on key topics providing potential leaders with experience and the UK bank board with additional perspectives.

Both custodians outlined further return to work schemes and board-ready initiatives in support of addressing the gender imbalance in senior roles.

While there’s a long way to go, it is evident that custodians are attempting to bridge the gap and provide additional support to both men and women in order to create gender equality and ultimately benefit their business and wider society.