The recent spate of scandals in the banking industry has once again focused attention on the seriousness of risk management and the important role played by compliance managers in building a culture of compliance amid the steadily widening web of laws and regulations.
Compliance begins at the top. Incidentally, the major characters embroiled in the latest controversies have been mostly men. It is inevitable that some advocates of gender balance in corporate boards have begun to argue that perhaps fewer organisations will be experiencing these kinds of troubles if only more women were taking charge of risk management.
Would women make more suitable compliance managers than men?
“I have seen both men and women do well in compliance roles, but in general, women tend to get right to the problem and are more willing to bring issues to the surface and deal with them,” says Dianne Challenor, chief operating officer for Citi’s Global Transaction Services in Asia-Pacific.
“Women do have different leadership styles, and this diversity is the benefit of having women in the workplace, as well as in senior roles. Generally speaking, women tend to be more team-orientated, with a focus on getting the right outcome for the organisation and the team. I think this is why it is important that companies embrace women in senior management roles – in order to ensure that their teams have the right balance of styles and approaches,” she adds.
Elspeth Renshaw, a partner at Talent2 International, which provides talent acquisition, human-capital consulting and workforce-management solutions in Asia-Pacific, wants to see more women playing a greater role not only in risk management, but also in all areas of business operations.
She cites a report by McKinsey & Co in 2010 that demonstrated a direct correlation between the number of women in top leadership roles and company performance. It also established that companies with the most women on their executive boards outperformed by a significant margin their competitors in the same sector with all-male boards.
“Looking at data from 2007 to 2010, McKinsey established that gender-diverse boards outperformed their competitors by 40 per cent using an average return on equity for comparison,” says Renshaw.
The same study pinpointed that five out of the nine leadership behaviours most important to organisational performance were used more often by women than men.
These were people development, managing expectations and rewards, acting as a role model, providing inspiration, and participative decision-making.
“The presence of women in leadership positions in organisations, including at board level, improves performance because of [these] leadership behaviours,” Renshaw explains.
So are banks hiring more female managers as part of their risk management strategy?
“I have not seen any evidence. I still believe that we should always choose the best person for the job, male or female,” says Challenor.
Renshaw believes the glass ceiling for women bankers remains well intact. “Around the world, women make up a slight majority of the total professional workforce but represent a single-digit minority at executive-level, decision-making roles in organisations. Women currently are a minority in overall governance roles and the evidence is that this is not in the best short- or long-term future interests of organisations,” Renshaw stresses.
The persistent under-representation of women at the executive level persists even within investment banking. Renshaw says: “Even with a renewed focus on diversity issues and resource investment by most investment banks, in the latest round of promotions, women accounted for only 17.6 per cent of 2011 [managing director] promotions at Morgan
Stanley [compared to 16.4 per cent in 2010]. Of the 261 Goldman Sachs 2011 MD promotions, female candidates were at 19 per cent, down from 24 per cent in 2010.”
Challenor, meanwhile, views the glass ceiling as more of a challenge rather than an obstacle. “These days, the glass ceiling is not how it should be described as more women are making it to senior ranks. However, I would describe it as a complex web of relationships that you need to build to get to the next level,” she says.
Some countries, such as Malaysia and Norway, are moving forwards by setting a quota for women in senior-management positions for certain types of companies. In most of the rest of the world, however, boardroom changes remain mainly driven by voluntary initiatives.
“Regulators and corporate-governance institutions globally are aware that company boards derive significant benefit from a diversity of backgrounds, technical skills and behavioural competence. Gender diversity at board level is one indicator of good governance and this is becoming more commonly recognised, as there is more scrutiny around board effectiveness,” says Renshaw.
Karen Fawcett, group head of transaction banking at Standard Chartered, doesn’t believe that banking is dominated by men at the top more than most other industries. “Rather, the common problem is that women are not moving through the ranks into P&L [profit and loss] management roles,” she says.
Fawcett, who is responsible for the global performance of trade finance, cash management, securities services and all other transaction banking products, revealed that one quarter of Standard Chartered’s wholesale banking management group is made up of female leaders. “I have never found being a woman a disadvantage and, in fact, usually the opposite. Progressing in your career is all about being the best you possibly can and grabbing opportunities as they appear,” she says.
Fawcett says that, based on the 2009 World Gender Gap Report, women occupy about 25 per cent of senior roles in Asia versus 28 per cent in France, Germany, the UK and the US.
“In my own experience, having lived in Asia for more than 20 years, women seem to thrive, as there are a large number of Asian family-run businesses as well as state-owned enterprises,” she says.
