Women Remain Underrepresented on Bank Boards

The number of women serving as bank directors has hardly changed in the past decade and this year's annual meetings are doing little to move the needle.

To some, the recent departures of some of the industry's top female executives could highlight one of the key reasons why there are so few women in the boardroom.

"Finance in general has been a male-dominated industry, so there are fewer women candidates to choose from," says Heidi DeWyngaert, the president of the $362 million-asset Bank of New Canaan in Connecticut. "It's not a lot more complicated than that."

Last June, women held about 17% of the board seats at U.S. financial institutions, according to the most-recent data from Catalyst, a New York nonprofit. That percentage was virtually unchanged from a year earlier. (Women filled just 12.4% of board seats in 2001.)

"I've been on the board since 1990 and ... it's made up of a bunch of 70-year-old men," says Anne Koons, a director at the $3.1 billion-asset Sun Bancorp in Vineland, N.J. "It hasn't changed much over the last 22 years. It's like an old men's club."

Despite efforts to raise awareness of women's role in banking, including American Banker's annual 25 Most Powerful Women in Banking, and attempts to remove barriers, women still face unique obstacles, says Heather Foust-Cummings, a senior director of research at Catalyst.

"We find that, consistently over time, regardless of industry, not just banking, women face the problems of gender stereotyping and a lack of access to influential networks," she says.

This is not to mention the repeated instances of the banking industry removing women from key leadership roles, such as the dismissal of Sallie Krawcheck last September as the head of wealth management at Bank of America (BAC).

Another high-ranking female banking executive, Ina Drew, resigned as the chief investment officer at JPMorgan Chase (JPM) last week in the wake of the New York company's massive trading misstep.

To be certain, women are well-represented on the boards of some banks. Bar Harbor Bankshares (BHB), a $1.2 billion-asset company in Maine boasts four women among its 13 directors.

Five of the 14 directors at KeyCorp (KEY) are women, including Elizabeth Mooney, the Cleveland company's chairman, president and chief executive. Wells Fargo (WFC) in San Francisco has five women on its 15-member board.

It's discouraging, however, to see that a number of banks across the country lack any female representation in the boardroom, Koons says.

"There are two problems," says Koons, who was appointed to Sun's board by her father, Bernard Brown, who is also the company's chairman. "The supply of women who want to be a bank director is limited, but the other is that banks aren't looking hard enough."

Increasing the number of female directors will lead to a greater number of women in key leadership posts, an area that has also lagged, Foust-Cummings says.

In September 2010, there were no female CEOs at publicly traded U.S. financial companies. That figure rose to 2.7% in June 2011, including Mooney, who took the helm at KeyCorp a month earlier.

Putting more women on boards will also better reflect the makeup of the banking industry's employee base; about 55.4% of the labor force at U.S. banks is women, Foust-Cummings says. "The business case is so clear," she says.

Given the number of women managers in banking and the plethora of female banking customers, "we should be looking at a cylinder not a pyramid," Foust-Cummings says, referring to the shape of the ideal organizational chart.

It will also help banks to have more women in decision-making roles, Koons says. "Women are more open to trying new things and seeing things from a different perspective," she says. "I think women bring a more practical approach to leadership and an open-ness to new ideas."

Women are well-represented on the board and management at Bank of New Canaan, one of two banking units of the $477 million-asset BNC Financial Group. Last month, BNC hired Peyton R. Patterson, the former chief executive of NewAlliance Bancshares, to succeed outgoing CEO Merrill Jay Forgotson.

Bank of New Canaan has eight other women in key leadership roles, including its chief financial officer, director of marketing and head of compliance.

The bank has three female directors, including DeWyngaert. It's something other banks should try to emulate, she says.

"It's absolutely necessary" to raise the number of female directors, DeWyngaert says. "More effort needs to be put into the search."