June 12, 2008
The lowering of Wall Street’s glass ceiling
The glass ceiling on Wall Street is getting lower.
The abrupt removal of Erin Callan as Lehman’s chief financial officer yesterday (along with Joe Gregory as Lehman’s chief administrative officer) is first and foremost a sign of Lehman’s fight to regain credibility among investors.
But it also means that Ms Callan, who was dubbed “Wall Street’s most powerful woman” in the April issue of Portfolio magazine is powerful no more. She is being unceremoniously bumped down to “a senior position” in the investment banking division.
Ms Callan’s move follows the firing of Zoe Cruz, the previous holder of the “most powerful woman on Wall Street” title. She was dismissed as president of Morgan Stanley last November by John Mack, its chairman and chief executive.
Dick Fuld, Lehman’s hard-driving chief executive, did not sugar the pill in Lehman’s announcement of the changes. He referred to his removal of Mr Gregory as “one of the most difficult decisions either of us has ever had to make”. As to Ms Callan, he had nothing quotable to impart.
Ms Callan can count herself unlucky. She was promoted to the CFO position just in time to face the full force of the Wall Street financial crisis. She initially seemed to be handling the pressure well but her premature assurance in April that Lehman had sufficient capital probably did for her
Lehman was this week forced to go cap in hand to the market for an additional $6bn in capital and Ms Callan’s credibility was damaged. On the other hand, Mr Fuld prematurely claimed in mid-April that the worst was over in financial markets, so he has his own reparations to make.
The cases of Ms Cruz and Ms Callan are different and there were no doubt reasons in each case for the banks to shuffle their senior ranks. But the fact remains that, when the going gets tough on Wall Street, women are the first to go.
its a rare bird that can lay an egg and survive a downturn on wall street. these are brilliant woman. ms callan’s achademic pedigree was unquestioned. her lack of financial acumen alas was too much to overcome. perhaps if she were less of a knockout and more of a…man…lets not forget carley. she engineered a great merger that propelled hp forward and has reaped huge rewards for her old company. but it took a rooster to hatch her egg- only on wall street and in the world of penguins. the street has long been a disfunctional boys club ruled by guys with an overabundance of testosterone. but more than one rooster has hit the chopping block through wall street’s latest adventures in arrogant hubris.it may just be a good sign when hens and roosters are removed from the coup. wall street may be maturing into an equal opportunity slaughter house.
Posted by: gym-bob | June 13th, 2008 at 5:19 am | Report this commentWow! Erin Callan must have been incredibly influencial and busy during her 6 month tenure to do so much damage to Lehman Brothers in such a short space of time!..
..or could it be those who promoted her knew exactly what was around the corner, because they had a hand in creating the mess in the first place?!
Congratulation Dick Fuld on a wonderful maneuover. You found the perfect scape goat and did the boys club proud.
Posted by: Anna | June 13th, 2008 at 9:19 am | Report this commentIt is not just Wall Street, but Fleet Street too! See this article: “The Financial Times’s editorial management is dominated by men, yet just a few years ago women held several key roles. What does it tell us about the way that Fleet Street deals with women?”
Posted by: Gabrielle | June 13th, 2008 at 9:26 am | Report this commentJohn, thank you for raising these issues. This was possibly not just the glass ceiling. Erin Callan had probably already shattered that-this was more being shown the “glass cliff” (see definition on wikipedia). A solution is to put multiple “business” women on these Boards and senior management teams now to help lower the risk orientation. There are many highly capable business women now who are alumni from Harvard Business School, Kellogg, Wharton, Chicago, Harvard Law etc. It is their turn-they have just not gotten enough of the calls yet to serve, but we are helping to change that. Recent studies show adding capable women to the top makes a company more profitable-shareholders take note.
Posted by: Executive Coach | June 14th, 2008 at 4:14 pm | Report this commentExecutives Coach’s posting regarding the education of some of the women is interesting. Just because a person, regardless of gender, successfully goes to a school, it does not mean the person is an appropriate leader.
If these women are so great, why aren’t they playing in the NBA, for example? They could make much more money.
There is little doubt that women are excellent students — which translates to being excellent in reciting back what the teacher wants them to say. All you have to do is look around the business world to see the poor students are the leaders. Two contemporary examples: Gates and Jobs.
In the financial world, if you don’t take risk, you will not be successful. The important point is, how much risk/reward is appropriate — the schools do not and cannot teach it because every situation is different.
Posted by: Blair | June 30th, 2008 at 8:41 am | Report this commentJohn, you raise an interesting point. I am even more intrigued as very recently I read another article stating that women are probably not cut out to succeed in the financial world because they are not as aggressive or manipulating as men. I am not sure I agree whole heartedly that in times of distress women are the first to go or even that women are not cut out to succeed to capture top places in the world of banking. Maybe it is true of the western world but there are exceptions. Take India as an example. A number of major financial institutions are either headed by women or have significant women leadership - JP Morgan, HSBC, UBS, ICICI Bank, Fidelity etc. So maybe our reaction to women being scapegoats is not entirely correct in today’s global world.
Posted by: Magical Aurora | June 30th, 2008 at 4:19 pm | Report this commentBlair’s contribution here is risibly crass.
Leaving aside the feeble stereotyping of women being excellent students because they just learn parrot fashion, Blair utterly misses the point of this blog.
The point being discussed is how experienced women in or approaching senior executive level fare. By this point in their careers they’ve not only demonstrated their educational achievements, but real-world commercial achievements over many years.
And regarding the point about risk-taking, it seems most unlikely that Blair has any real insight into the quality of Callan’s/Cruz’s performance in that regard.
Blair: just keep wearing ignorance on your sleeve; you have a gift for it so why stop now?
Posted by: DKM | July 1st, 2008 at 9:38 pm | Report this comment