What female employees say about the culture at Goldman Sachs
For former and current female employees, Goldman Sachs’ $215 million settlement in a long-running gender discrimination lawsuit was more than just a reminder of the bank’s troubled history with women. With the trial just weeks away, he missed a chance to usefully expose the practices that continue to plague the Wall Street firm.
“The behavior could have been highlighted,” said Jamie Fiore Higgins, who was one of Goldman’s top female executives before she left in 2016 and went public last year. Bully Market, a memoir of his 17 years at the bank. “And now guess what? They wrote a check.”
“Each generation has been better on a relative basis. It’s still terrible on an absolute basis,” he added.
The Financial Times spoke to more than a dozen current and former Goldman employees about their experiences at the bank.
Their comments highlight the notion that, despite some progress, Goldman is still grappling with some of the challenges outlined in the 2010 class action. These include the feeling that starting a family hinders women’s careers in a way that it does not for men, and that there are too few women in leadership roles.
“I would have been better compensated if I wasn’t a mother,” one woman who recently left the bank told the Financial Times. “For the guys, most of the people I came in contact with, their wives weren’t working.”
A current female employee, meanwhile, said: “Goldman promises women will be leaders for a long time, then they don’t do anything.”
While the women interviewed said there was little sign of the overt sexism that was rampant on Wall Street decades ago, they felt the bank’s culture was less accessible to women interested in sports and that speaking up about certain issues could still hurt their careers.
“For me, there was never any overt bias,” said another woman who recently left the bank. “It was more difficult to communicate with some senior men in the same casual way as with other male colleagues at my level.”
A current young female employee said that although “we are encouraged on a very theoretical level to talk . . . in practice, if you say something controversial, it is not well received”.
After announcing the gender discrimination payout — one of the largest in U.S. corporate history — Goldman Sachs said it was “proud of its longstanding work to advance and advance women” and remained “committed to providing a diverse and inclusive workplace.” It has set out to build a workforce of around 45,000 globally, split equally between men and women, starting with junior analysts and associates.
Goldman’s junior ranks are more female, and one challenge for the company is to keep as many of them as possible.
Jacqueline Arthur, Goldman’s head of human capital management, insisted that diversity is a “forward-looking priority for the firm”.
“In North America, 45 percent of our analysts and staff were women, which reflects a 10 percent increase over the past 10 years,” she told the FT, while female representation also rose among managing directors and partners.
Ten of Goldman’s 31-person senior management committee are women, but only two — Stephanie Cohen, who heads the bank’s platform solutions business, and Beth Hammack, co-head of financing — are responsible for a revenue-generating business, a glaring absence for many. among the bank’s female employees.
Goldman’s struggle to build a more diverse workforce reflects trends in the broader financial services industry. According to a 2021 report by McKinsey and LeanIn.org, women in North America are “dramatically underrepresented” in the financial services industry, particularly in senior management positions.
Citigroup’s Jane Fraser is the only woman to lead a major US bank, and the top contenders for CEO of another major Wall Street firm, Morgan Stanley, are all men.
“It’s not like anybody’s saying, ‘Hey, let’s hold back women,’ that’s not how it works,” said Martin Davidson, professor of business administration and chief of diversity at the University of Virginia Darden School of Business. “It’s just in the water. . . masculinity is the bread and butter of the investment banking sector.”
But Goldman faces a particularly acute challenge given the culture of working around the clock, which women feel often affects them more than men.
“I really think Goldman is trying, but there’s an industry problem and a lifestyle problem,” said one young banker who recently left Goldman.
“It’s really more about the opportunities and support at Goldman in terms of career progression,” said one woman who works at the bank. “There are very few women at the top, especially those running businesses.”
In addition to the steering committee, women leading Goldman businesses include Kim Posnett, who was recently promoted to head the investment bank’s technology, media and telecommunications group, and Meena Flynn as co-head of the private wealth management business.
The legal case has its roots in 2005, when Cristina Chen-Oster resigned from Goldman after eight years after alleging consistent and systematic discrimination. She later filed a complaint with the Equal Employment Opportunity Commission, a US government agency.
Chen-Oster eventually sued Goldman, teaming up with two other former employees — Shanna Orlich and Lisa Parisi — and filing a joint lawsuit with more than 2,800 participants.
The allegations center on Goldman’s performance evaluation practices, “360 reviews” and “cross-examination,” which included interviews with peers and executives and were used to inform pay decisions and promotions. The plaintiffs alleged that the results of these processes clearly indicate an entrenched bias against women in Goldman’s investment banking, asset management and trading businesses.
The lawsuit alleged that women returned from maternity leave with diminished career prospects and that Goldman’s managers, most of whom were male, had unchecked discretion in how to assign projects to their teams.
One woman who worked at Goldman Sachs during the period affected by the lawsuit described a culture in which going to HR made her a “pariah for life.”
“The company provides various channels through which concerns can be raised without fear of retaliation,” the bank said.
In the years since the lawsuit began in 2010, Goldman has addressed some of the allegations, including changing 360 reviews to focus on professional development rather than performance reviews.
“Goldman has made significant changes to its practices because of our lawsuit,” said Anne Shaver, a partner at Lieff Cabraser who represented the class action plaintiffs.
As part of the settlement, Goldman committed to more such policies and agreed to hire an economist to identify gender pay gaps for the next three years.
Goldman does not disclose pay differentials for its US business. The average hour salary difference At Goldman Sachs International’s main UK arm, the gender ratio was 53 per cent in 2022, slightly higher than a year earlier, although it says men and women in similar roles are paid equally.
Arthur said the bank offers “industry-leading benefits that support our female professionals”, which include at least 20 weeks of maternity leave for both men and women, 20 days off for miscarriage or pregnancy, and breastfeeding rooms in its offices worldwide.
Last year, Goldman named more women and black partners than ever before as part of a biannual ritual that fills its elite ranks. They join other female partners, including General Counsel Kathy Ruemmler, Chief Administrative Officer Ericka Leslie and Co-Head of Global Funding Beth Hammack.
While the Goldman women welcome the effort, some are skeptical that real change will be felt quickly.
“You can’t criticize them for trying to make a change,” said one current employee. “We’ll see if they stick with it and if it has an effect.”
Additional reporting by Taylor Nicole Rodgers and Harriet Agnew
This article has been amended to clarify that two women on Goldman’s senior management committee run a revenue-generating business.