Wall Street finally hired its first female CEO — and data says it could open up careers for women across finance. Here's how.

  • Citigroup announced that Jane Fraser will succeed Mike Corbat as Citigroup's CEO. Fraser will be the first woman to lead a major US bank.
  • Fraser's promotion could create opportunities for more women leaders in finance.
  • Most people are still biased to think of leaders as men.
  • In 2019, just 21.9% of leaders within US financial services firms were women, according to a Deloitte analysis. Women make up more than half of financial-services employees in the US.
  • Visit Business Insider's homepage for more stories.

On Thursday, Citigroup announced that Jane Fraser would succeed Mike Corbat as CEO when he retires in February 2021.

Fraser is currently the president of Citigroup and the CEO of Global Consumer Banking. She'll be the first woman to lead a major US bank. And her promotion could change the career trajectories of many women in finance today — or so the research says.

Management material

For centuries, banking has been helmed largely by white men. A 2019 Deloitte report indicates that, in 2019, just 21.9% of leaders within US financial services firms were women. Yet women make up more than half of financial-services employees in the US.

There's a certain structural inertia in banking, as in other prestigious professions: White men in power shepherd junior white men up through the ranks until, eventually, those underlings take their places.

Women — and for that matter, anyone else who deviates from the mold — are less often seen as "management material." Sometimes that's because the people in power are genuinely prejudiced. Other times it's because most people — even with good intentions — gravitate toward people who look and act like they do, so much so that white women and professionals of color are forced to contort themselves to white, male norms of behavior in order to be acceptable in the polite society of the corporate management class.

When a woman takes on a top executive role, people's mental image of a leader expands to accommodate that. And women lower on the proverbial ladder see that someone who looks like them has risen to the top. Maybe they can, too.

Picture a leader

You could call it the "picture-a-leader" test. It's simple: Ask a friend to draw an effective leader. Chances are high that your friend drew a man.

That's at least partly because most of the leaders we encounter daily are men — men who think and act a certain way.

"An effective senior banker is (wrongly) imagined to be aggressive, dominating, transactional," Astrid Jaekel and Elizabeth St-Onge, partners at management consulting firm Oliver Wyman, wrote in The Harvard Business Review in 2016. These characteristics "are stereotypically masculine," they add.

Indeed, Melinda Gates nearly quit a job at Microsoft early in her career because she was the only woman hired in the incoming class of MBAs. "It wasn't always easy for me to feel at home in an environment where people seemed to get rewarded for being combative," she's said.

Deloitte's analysis found that the number of women in senior leadership increased threefold for every woman who was added to the C-suite. That is to say, if a company with one woman in the C-suite has 10 women in senior leadership, you could expect a company with two women in the C-suite to have 30 women in senior leadership.

And a 2010 paper published in The Quarterly Journal of Economics found that female students at the US Air Force Academy who had female professors in math and science classes were more likely to take further math and science courses. They were also more likely to pursue a STEM degree.

So Fraser's promotion is great progress — though hardly proof that women have shattered the glass ceiling. "Every little piece helps," said Vishal Gupta, an associate professor of management at the University of Alabama's Culverhouse College of Business. Men in charge of hiring and promotions may now have a female "schema," that mental image of a leader, to influence their decisions.

'Invisible barriers'

Women often face "invisible barriers" to professional success, Gupta said.

To use his example, some companies expect employees to work late and take every business trip, at least in a pre-covid era. But given that most women in mixed-gender relationships still bear the brunt of childcare (which presents issues of its own), they may not be able to meet these unrealistic expectations and may end up missing out on promotion opportunities later on.

Axios' Felix Salmon and Erica Pandey reported that Fraser's husband left his job as head of global banking at European bank Dresdner Kleinwort in order to help Fraser advance in her career. According to Axios, Fraser told an internal McKinsey interviewer after leaving the firm that she was "exhausted" and "guilty" when her two kids were young and she worked at the firm part-time.

Without support systems — at home and at work — women's careers may suffer. 

The CEO track

In HBR, the Oliver Wyman partners write that firms might consider "helping high-performing women better drive their careers by directing them toward roles and functions that have a direct path to senior leadership roles."

Women often don't get on the CEO track, while men do.

Earlier this year, The Wall Street Journal published an analysis of executives at the biggest public companies and found that men were more likely than women to get jobs that involve managing profit-and-loss, such as managing a division or a unit within a larger organization. These jobs directly affect the bottom line, and the men who hold them are better positioned to be CEO.

As global head of strategy and M&A, Fraser helped set the company's strategy after the financial crisis. Before becoming president of Citigroup in 2019, she helmed divisions including Latin America as well as US Consumer and Commercial Bank and CitiMortgage.

Her promotion to president followed some external pressure. At a congressional hearing in April 2019, Democratic Rep. Al Green asked the CEOs of some of the largest banks, including Citigroup, whether they believed that their likely successor would be a woman or a person of color. No one raised their hand.

A few months later, Fraser was named president and head of global consumer banking at Citigroup. JPMorgan, meanwhile, promoted a record number of women to managing director in April 2019 (26% of the group, or 30 executives, were women).

Following a health scare for Jamie Dimon in March, Business Insider counted a list of six probable successors to the JPMorgan CEO spot. It includes four women.

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