May 21 (Portal) – The absence of women on Morgan Stanley’s (MS.N) list of potential CEO successors underscores the importance of developing and retaining diverse talent, corporate governance experts say.
Morgan Stanley co-presidents Ted Pick and Andy Saperstein, as well as chief investment manager Dan Simkowitz, are believed to be prime candidates to succeed James Gorman, who said on Friday he plans to step down as chief executive within a year.
The latest US workforce diversity data, widely released by Wall Street banks, shows that in 2021 women were less represented in senior positions at Morgan Stanley than at other leading US banks.
According to Morgan Stanley, 25% of those holding managerial/senior official/managerial positions in the US were women, versus 29% at JPMorgan Chase & Co (JPM.N), 36% at Bank of America Corp (BAC.N) and 38 % for Citigroup Inc (CN). Among the major competitors, only Morgan Stanley’s arch-rival Goldman Sachs Group Inc (GS.N) was represented with 23% fewer women.
Additionally, 80% of Morgan Stanley’s top US executives were white, more than the others who reported such a proportion of 67% to 78%.
A Morgan Stanley representative declined to comment.
Mary Beth Gallagher, director of engagement at Domini Impact Investments LLC, which invests with environmental, social and governance (ESG) considerations in mind, said companies need to have a pipeline of diverse talent if they want to attract diverse leaders. what would require recruitment and career development efforts.
“The logic is to make sure you have the right people with the skills and the authority to make decisions. You have to have trained those leaders,” Gallagher said.
Of course, Morgan Stanley has several women in top positions, including CFO Sharon Yeshaya. She is one of three women on the 14-strong works committee. The 14-member board has four women and four directors who describe themselves as ethnically diverse.
According to a Deloitte study published last year, in 2021 across the financial industry, only 21% of service sector executive positions, 19% of C-suite positions and 5% of CEO positions were women.
Wall Street has struggled to shake off its “old man’s club” image. However, in recent years, banks have made strides in diversity to appeal to millennial workers, under pressure from social movements like #MeToo and Black Lives Matter.
A major milestone came in 2021 when Citigroup appointed Jane Fraser, its former president, as CEO.
Doug Chia, president of consulting firm Soundboard Governance, called the lack of diverse executives at Morgan Stanley and other companies “a classic pipeline problem” because it narrows the pool of candidates who could promote companies to higher positions.
“When there is a shortage of candidates, you have to try harder” to attract them, he said.
Reporting by Ross Kerber in Iowa City and by Simon Jessop in London; Adaptation by Greg Roumeliotis and Rosalba O’Brien
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