Morgan Stanley’s recent $54m record settlement in a sex discrimination case will force banks to put the issue of bringing women into senior management on the front burner again, says Karina Robinson

The recent $54m settlement for sex discrimination at Morgan Stanley shows that while banks may not have ignored the issue, as a management issue it remains one of the hardest to tackle.

No-one would deny the difficulties of marrying a macho culture that brings in profits with increasing the role of women in investment banking. The latest headline-grabbing settlement, however, is a wake-up call to banks.

They have certainly not stood still over the past few years. But the apparent intractability of the issue has put it on the back burner. As an example, one of the top three global investment banks implemented a suggestion to have the remuneration of senior managers tied to their record in promoting women. But this could only be one of many factors taken into account in the appraisal process and ended up being irrelevant.

At another US bank, there were huge arguments between the women on its anti-sex discrimination committee as to whether quotas and positive discrimination would be a hindrance or a help. Not an easy decision.

But there are some relatively simple ways in which certain banks can remedy discrimination. From the beginning of their careers at the bank, women should be given as many big clients as the men – not the smaller, more difficult ones that earn less revenue for the firm and therefore bring lower bonuses, as has been the case at some.

Sex discrimination costs banks in a number of ways, including losing out on the time and money taken to train women. At entry level, about 50% of staff are female; at managing director level, less than 10% are women; and at board level, female participation is so minimal that it can barely be measured. And, as a study by one top US bank showed, most women left for other jobs rather than to have babies.

But bringing women into senior roles is far from straightforward. The problem is that dealing with management issues – and ultimately that is what this is about – is one of the hardest for any organisation. Changing a company culture takes at least a generation.

Morgan Stanley’s record settlement will probably ensure that investment banks put the issue on the front burner again.

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