Morgan Stanley CEO Succession Underlines Wall Street’s Diversity Gap

May 21 (Reuters) – The lack of women among Morgan Stanley’s ( MS.N ) CEO succession underscores the importance of developing and retaining diverse talent, corporate governance experts say.

Morgan Stanley co-chairmen Ted Pick and Andy Saperstein and head of investment management Dan Simkowitz are the frontrunners to succeed James Corman, who said Friday he plans to step down as chief executive within a year.

The most recent U.S. workforce diversity data, widely reported by Wall Street banks, shows that women are less represented in leadership positions at Morgan Stanley than at any other U.S. bank in 2021.

Morgan Stanley said women make up 25% of “executive/senior officer/manager” positions in the U.S., compared with 29% for JPMorgan Chase & Co ( JPM.N ), Bank of America Corp ( BAC.N ) and 36%. 38% for Citigroup Inc ( CN ). Among major peers, only Morgan Stanley’s arch-rival Goldman Sachs Group Inc ( GS.N ) had lower female representation, at 23%.

Also, 80% of Morgan Stanley’s top executives in the US were white, compared to others, where such representation was between 67% and 78%.

A Morgan Stanley representative declined to comment.

Mary Beth Gallagher, director of engagement at Domini Impact Investments LLC, which invests in environmental, social and governance (ESG) considerations, said if companies are to find diverse leaders, they need to have a diverse talent pool that includes recruiting and careers. – Building efforts.

“The logic is to make sure you have the right people with the skills and the decision-making authority. You have to develop those leaders,” Gallagher said.

Of course, Morgan Stanley has many women in prominent roles, including Chief Financial Officer Sharon Yeshaya. She is one of three women on its 14-member steering committee. Its 14-member board of directors includes four women and four directors who distinguish themselves racially.

Across the financial sector, women will hold 21% of service board seats, 19% of C-suite roles and 5% of CEO jobs by 2021, according to a Deloitte study published last year.

Wall Street has struggled to shake its image as an “old boys’ club.” However, in recent years, banks have made strides in diversity, under pressure from social movements like #MeToo and Black Lives Matter, as they seek to attract millennial workers.

A major milestone came in 2021, when Citigroup appointed its former chairman, Jane Fraser, as its CEO.

Doug Chia, president of consulting firm Soundboard Governance, called the lack of diverse senior leaders at Morgan Stanley and other firms “a classic pipeline problem” because it limits the number of candidates companies can promote to top jobs.

“If there is a shortage of candidates, you have to try harder to attract them,” he said.

Reporting by Rose Gerber in Iowa City and Simon Jessup in London; Editing by Greg Roumiliotis and Rosalpa O’Brien

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