Breaking into the investment-banking boys' club

Tuesday, March 11, 2014


There are more women in bank boardrooms every year. There are more women in banks' top executive offices. Where there aren't noticeably more women is in investment banking.

The business of buying and selling securities, providing huge financings to companies, and of advising on merger deals remains very, very male. Many years of talking about the issue has not yet perceptibly changed that.

Globally in business, the proportion of women in senior leadership roles is about 24 per cent, according to Grant Thornton LLP. The Canadian securities industry is not even close to that level.

The most recent numbers are from 2008, in research from Catalyst, an organization dedicated to advancing women in business. They showed that women made up only 10 per cent of managing directors in the Canadian securities industry. At lower rungs, women were more numerous but still only represented about 25 per cent of entry-level professional jobs. Depressingly, those numbers had not budged since 2000.

How are the numbers in 2014? Anecdotally, progress is still slow.

Pick your data point: At a recent meeting with department heads from a leading securities firm, one of the roughly dozen on hand was female. Scanning the list of investment banking group heads at another large firm, one finds only one female name. The new head of the advocacy group Women in Capital Markets lamented in an interview with financial publication Investment Executive that she is frustrated that the number of women "in senior-level roles hasn't moved a smidgen" in 15 years. Not a single one of the big securities firms operating in Canada is run by a woman, and there's no expectation of that changing any time soon.

The industry seems to know it has to change. There are programs at banks to encourage recruiting, mentorship and other such initiatives that will help address the gender gap. But what it will really take is more men who want change. There are not enough women in the industry to make it happen.

One of the key complaints of up-and-coming female bankers is that they cannot find a sponsor or mentor in senior management because women are so rare at those levels. So pushing for change falls to men in the industry. What motivates men in the securities industry? Money.

Senior management must make diversity a part of how people are measured and paid. More importantly, managers also have to convince the men in the industry that bringing on more women will benefit them by increasing the quality of the team. Women make up half the population and more than half of Canadian university graduates. The industry (and the bonus pool) is missing out on those brains, and the profitable deals they could be thinking up. And finally, customers must demand it.

As Robbie Pryde, head of equities at TD Securities, puts it, firms will have to "mirror" an increasingly diverse client base. There are more women running investment funds, more women on boards of companies seeking merger advice, more women in chief financial officer roles picking banks to do underwritings. When they start to wonder why their bankers are all men, that's when things will change.

It may be high finance, but behind the glitz and the millions it is a service business. The customer gets what the customer wants.

"I didn't start out as a champion of women," Mr. Pryde told a roomful of executives on hand at an event last week put on with Catalyst. "My leadership style has evolved with the marketplace."

"To compete, you have to keep in step with your customer base."

Those demands from customers are already coming in the accounting world. Bill Thomas, head of KPMG in Canada, told the gathering that some clients won't let his firm pitch for business unless there is a diverse team.

The event where Mr. Pryde and Mr. Thomas spoke was called "Men who get it." As more do, things will change.

"The more men know about gender inequalities, the more likely they are to want to close the gender gap," said Alex Johnston, who heads Catalyst in Canada.

Another of the men on Bay Street who does get it is Eric Tripp, the president of the capital markets arm of Bank of Montreal and the recipient of the 2013 leadership award for men from Women in Capital Markets.

At his firm, a push since 2012 has increased the number of managing directors who are female by about 30 per cent, albeit off a low base. The bank has used measures such as financial sponsorship and internships to increase the flow of women into jobs. Meeting goals must be part of performance reviews and hiring practices, he said.

"It's having an impact, but it's still a tremendous amount of work to do," Mr. Tripp said in an interview.