The Broken Rung: Women Have Made Great Strides in Banking, But Parity is Still a Ways Off (2024)

According to the American Bankers Association magazine ABA Banking Journal, more women than ever are heading into the profession, representing more than half of the total number of employees working in the banking industry today.

That is the good news. The more troubling statistic is that the road to the C-suite is still a steep one for many women in banking with the publication reporting a mere 7.5 percent of bank CEOs are women. Arkansas is not immune to those trends, although more and more local bankers say there are positive signs that change is afoot in the workplace.

“I have to say that from my job in technology at a bank, the demographic was probably 50/50 in the room,” said Cindy Wolfe, chief operating officer at Bank OZK, who started her career in financial technology in North Carolina before joining the Arkansas bank in 1997. “I was fortunate in that I saw women in all positions of the bank and always have seen women in positions of great responsibility and authority. To me, the hard battles were fought before I arrived on the scene, and I have great admiration for them.”

Lori Ross, Arkadelphia president at Citizens Bank, shared a similar story, having not only been a woman promoted to the top job but just in her 20s to boot, a daunting task for any executive, male or female.

“I will say, when I first started in banking, there were a large volume of women that were employed by the bank but not in what I would call a leadership-type role,” said Ross, who also sits on the board of the Arkansas Bankers Association. “As time has gone on, that has changed, and I’m seeing, certainly, more and more women fill some of these leadership opportunities.”

Ross said one reason for the increase is the myriad departments that comprise today’s banks, from the traditional retail and business banking to back-office areas such as financial technology and outreach, which provide more entry points for women from which to advance.

“As banks, we’ve added different sectors to our industry,” she said. “There was a period of time where people thought of banking as either retail banking or lending. Now there’s so many more departments; you’ve got regulatory compliance, risk management, community banking, educational support. I think we’re seeing more women in these roles because the industry as a whole has grown and added different sectors.”

Ann Madea, executive vice president and chief information officer at Simmons Bank, is a prime example, having entered the banking industry on the strength of her expertise in information technology. Over more than 30 years, she worked for both global institutions and regional banks before joining Simmons three years ago, and she said even in the early stages of her career, there were female role models to provide inspiration and guidance. She called such influences critical to her journey, as well as those of women today.

“It is very, very different from when I came up, but I still had two women leaders who I still talk to, still check in with them, and we have lunch,” she said. “They were part of an executive team when I was a developer, and they were part of a group of very strong leaders. I had wonderful male mentors, too, but to have those two women who were so powerful as my coaches and my bosses was just phenomenal. If they weren’t there, I’d probably have a different view.”

WHAT IS BROKEN?

Given the number of women in the workplace in general and banking in specific, it is puzzling that more women do not make it to the upper ranks of many organizational charts. While that may sound less like news and more like more of the same, a new impediment is emerging that appears to be hindering women’s progress much earlier in their careers, well before hitting their heads on the glass ceiling.

According to McKinsey & Co.’s 2023 Women in the Workplace Report, the new stumbling block is being called the broken rung of the career ladder.

“It’s not the glass ceiling anymore,” Madea said. “The broken rung is taking women longer to get into a manager position or a director position, and if it’s taking them longer to get into those positions, it’s going to take them longer to get into the C-suite. That is one gap that’s hurting women getting to the top.”

The report states that for nearly a decade, women’s biggest advancement hurdle in corporate America has been the first step up to manager. In 2023, 87 women were promoted for every 100 men, and there are demographic variables based on ethnicity and race. White women are promoted most equally at 91 promotions per 100 for men, followed by Asian women at 89 promotions. Meanwhile, only 76 Hispanic women and just 56 Black women are promoted for every 100 of their male counterparts. Experts say that sets the tone for all future advancements to follow.

“Women are often hired and promoted based on past accomplishments, while men are hired and promoted based on future potential,” the report reads. “This unfair thinking — rooted in what social scientists refer to as ‘performance bias’ — can be particularly challenging. … Women early in their careers have shorter track records and similar work experiences relative to their male peers. Performance bias can especially disadvantage them at the first promotion to manager.

“Until the broken rung is fixed, gender parity in senior leadership remains out of reach,” the report stated. “While companies are increasing women’s representation at the top, doing so without addressing the broken rung offers only a temporary stopgap. Because of the gender disparity in early promotions, men end up holding 60 percent of manager-level positions in a typical company, while women occupy 40 percent.”

STRATEGIES FOR ADVANCEMENT

On the other hand, there is some evidence that potential opportunities are being overlooked by female banking employees. Ross noted that in her experience, commercial lending has traditionally seen the fewest female employees compared to other banking divisions, thereby denying women the opportunity to stand out come promotion time. Ross should know, considering commercial lending is the very department where she got her start.

“Commercial lending is probably the area that I see the fewest females, and I don’t know that I have the answer as to why that is,” she said. “I will say it was a little intimidating when I first started because most of the time, you are the only woman in the room, whether it’s with your customers or your counterparts. You have to be comfortable with that, which I grew to be, and that’s where I thrived, so I think the path is there for the right person.”

Wolfe echoed that sentiment while adding that in today’s tight labor market, smart companies take a more proactive approach to succession planning and career mapping as a means of employee retention, regardless of gender.

“We try to build career pathing for talented people at the bank, period,” she said. “The No. 1 reason people leave is that they don’t see opportunity, especially if they’re high-potential people. We’re trying to build better and better systems to identify talent on the front end and then, very importantly, match the individual to the right role that best suits them so they can be successful and then support them in their success. I have 100 percent confidence that will benefit women and men equally.”

Another smart tactic leading companies employ is providing mentorship that allows for the differences in skills and perceptions among generations of employees, Madea said.

“Today’s young women are amazing. Like their male counterparts, many have been programming since they were in kindergarten,” she said. “What we really need to help them understand is it’s not just the technology; we need them to understand banking. We cannot possibly support our lines of business without understanding that first.”

All three executives also stressed the importance of personal accountability in building a career, noting that some indicators of high-performing individuals, male and female, never change.

“The No. 1 thing that I start with is the responsibility of a job. You can go anywhere you want to go and do anything you want to do if you exemplify a good work ethic because it sets you apart,” Ross said. “It’s so hard to find that. It’s almost harder to find someone with good work ethic than it is people with an education because there’s so many opportunities to get help paying for an education and training.

READ ALSO: AMP’s 2024 Women in Banking

“They may come to you with a resume full of accolades, but if they don’t want to show up to work and they only want to work 25 hours a week, they’re not going to get very far. Any opportunity I have to talk to younger people, I tell them it starts with work ethic.”

Wolfe added that any employee who wishes to advance must also spend some time applying a strategy to their succession planning if they expect to go anywhere, be it what department to work in or identifying and proactively filling any gaps in education or expertise.

“Most people think of goal setting, and goal setting is important whether it’s losing 10 pounds or growing the business by X percent,” she said. “Along with that goal, however, there has to be a system. When you take a systematic approach to things and then set up the proper controls around the processes, then you really have something. That’s actually the hardest part.

“Having big dreams and goals is great. You certainly need to do that, but I think that in business and in life in general, a lot of people have a lot of great ideas. It’s much rarer to have people who can execute on it.”

YOU MAY ALSO LIKE: 2024 AMP Best Financial Advisors