A major German bank recently had to make a tricky decision. A spot on the executive board opened up and they wanted to appoint a woman. After an intensive search, a headhunter presented two promising candidates. “But their salary expectations were outside the realm of possibility,” a source who was present said. The decision was then made to hire a man.
This is not an isolated case. The German government-owned development bank KfW has been looking for months for a female chief risk officer. “Now, it is often the same woman who is considered for 10 different positions in banks’ succession plans, simply because there is still a great shortage of female junior executives,” said Reto Jauch, founder of the executive search boutique, Jauch Associates.
The banking sector is paying the price for relying on male networks for decades. Now, there is a lack of qualified women precisely at the moment when banks most urgently need them. The pressure on banks –both legally and socially – is building.
The German government has demanded that companies set goals for quotas for women on the executive board and in the two levels of management below them. By the end of September, banks must provide their goals for 2017, but few have released specific figures.
The ING-Diba is one of the few banks that has done their homework. The online bank plans to increase the percentage of women in upper management from the current 17 percent to 22 percent by 2017. By 2020, women should hold 30 percent of upper management positions. The ING-Diba is leaving only the executive board at the status quo of a 20 percent.
DZ Bank also is proving to be moderately ambitious. The goal for the board, until now in male hands, will remain at zero because no contracts run out in the near future. But the first woman is expected to be promoted into the group of 22 division managers by 2017.
Meanwhile, Hypo-Vereinsbank said it seeks to increase the percentage of women in “specialist and managerial positions,” currently at 26 percent, to 30 percent by 2017. These examples illustrate just how much ground this male-dominated banking sector needs to make up.
“It’s important for young women to see other women in positions of leadership and to notice that it’s not totally out of place to aspire to something like that.”
The percentage of women on the executive floors of the 100 most important savings banks and banks in Germany, according to the German Institute for Economic Research (DIW), has increased to only 6.7 percent from from 1.9 between 2008 and 2014. Only three banks –HSBC Trinkaus, the Frankfurter Volksbank and the Sparkasse Krefeld – are led by women. Five banks, including publicly listed Aareal Bank, have a woman in charge of the supervisory board.
Ingrid Hengster is one of the few women at the top. The Austrian is responsible for domestic promotional business on the executive board of the KfW development bank. “It takes time for women to be promoted above the various levels of the hierarchy,” she said. “It comes from below.”
High profile women such as Ms. Hengster are beacons to others. “It’s important for young women to see other women in positions of leadership and to notice that it’s not totally out of place to aspire to something like that,” said Christiane Vorspel, who runs IT in the investment banking division at Commerzbank. Today, she shares the tips her colleagues gave her while she was climbing the ladder in her career, such as how to network effectively. “Many women are astounded that good work alone isn’t enough,” she said.
Ms. Vorspel, like many women executives, is skeptical of quotas. At the European Central Bank, for example, the quota of women in management levels, so far, has only been a subject of discussion between the personnel division and heads of individual departments. “We are now considering whether or not to make the quota of the different internal departments public, and openly show where the each departmet stands vis-a-vis women in leadership positions,” said Caroline Willeke, a manager in the human resources department. “That could stimulate the competitive spirit among department heads.”
Anja Mikus, chief investment officer and member of the board of directors of Commerzbank, is among the few women to hold an important management post in the funds sector. Ms. Mikus is also the business manager of Arabesque Deutschland, a company that targets long-term fund investments. It’s easier for women to stand out in funds management, she said, as the only thing that counts is fund performance.
“A strong leveling has taken place in the past within executive committees,” said Ms. Mikus. “Value concepts have changed and this trend has been pronounced, particularly in the financial sector. Variety in the decision makers and the different points of view that come with, can be a good corrective, that pays off in the end for the company.”
“The quota for women is unfair,” she added. “It discriminates against men. But that doesn’t mean I am fundamentally against quotas. With political issues, things sometimes have to be exaggerated, otherwise, nothing happens.”
She says that women in middle management with a lot of potential, who were committed and excellent at their job, hardly had any chance of reaching the top level of management. And the female quota could help here, by putting the pressure on.
“Every process takes its time. When more women join supervisory boards, the first hurdle will have been jumped,” Ms. Mikus said. “The committees are the next step.”