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Forbes featured Haub Law Professor Darren Rosenblum new piece: "Citibank’s New Leader: Do Women On Boards Yield Diverse CEOs?"

09/14/2020

Forbes featured Haub Law Professor Darren Rosenblum new piece: "Citibank’s New Leader: Do Women On Boards Yield Diverse CEOs?"

News from Wall Street rocked the financial world: Citibank named Jane Fraser as its new CEO, making her the first woman to lead a major U.S. financial firm. While her ascension undoubtedly knocks at Wall Street’s glass ceiling, it doesn’t crack it open. It really means that in one firm, the stars aligned in one woman’s favor. To break the glass ceiling for CEOs, firms need more diverse boards.

 One may think that hiring a woman CEO isn’t newsworthy–after all, women have been half of all higher education graduates for decades. But with this announcement, Fraser joins a very exclusive club of only 4% of public company CEOs, since men hold 96% of these top positions. More men named John, or even James, hold CEO positions than all women CEOs combined in the U.S.. Nearly all of them are white–only four CEOs among the top 500 firms are Black– and none is a Black woman.

For women in the leadership pipeline, their male colleagues will be 19 times more likely to attain a CEO position than they will. The cisgender men who run the corporate world exclude women and other sexes and genders from leadership. For Fraser, the CEO position isn’t winning the lottery, because she worked hard for it, but it seems nearly as unlikely. This is only truer for finance as a field, which historically has been one of the most male-dominated. None of the top banks have ever had a woman at the helm.

Fraser’s success matters because it offers a glimmer of hope to women who have been working hard to climb the corporate ladder. Many women drop out of the running because their firms put them on the mommy-track, even as they promote male parents. Additional challenges impede women of color. And as the #MeToo movement made apparent, corporate sexual harassment has chased many employees–mostly women–out of the leadership track.

Read the full Forbes article.

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The Hill featured Pace Haub Law Professor Darren Rosenblum's piece "The Supreme Court's decision won't cure inequality — quotas will"

06/22/2020

The Hill featured Pace Haub Law Professor Darren Rosenblum's piece "The Supreme Court's decision won't cure inequality — quotas will"

Since 2015, members of the LGBT community have been able to marry someone from the same sex, but in many states, they haven’t been able to work where they want. Monday’s Supreme Court Bostock decision changed that. Now, not only is firing someone because of who they choose to marry illegal, but so is firing someone based on their self-identified sex. 

But I take the victory with a grain of salt: we should be skeptical about how much progress to expect from such decisions. This decision will not ensure our equality — we need more aggressive legislation, including quotas. Look at the race context: the Civil Rights Act of 1964 has unquestionably protected people based on race since its passage, but as the massive mobilization after George Floyd’s death demonstrates, racial equality remains a distant dream.  

This is also true for sex. Since the revolutionary sex equality cases brought by then-litigator, now-Justice Ruth Bader Ginsburg in the early 1970s, we have indeed seen radical improvements in sex equality. But inequality is so pervasive, we don’t even see it. Women still only make 80 percent of what men earn, and black people only make 70 percent of what white people do. Our corporate sector actively promotes how inclusive it is, but it’s a man’s world. Women constitute only 5 percent of Fortune 500 CEOs. There are more CEOs named James than there are women CEOs. 

Read the full Hill article.

 

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Forbes featured Haub Law Professor Darren Rosenblum in "Supreme Court Protects LGBTQ+ Workers From Sex Discrimination"

06/16/2020

Forbes featured Haub Law Professor Darren Rosenblum in "Supreme Court Protects LGBTQ+ Workers From Sex Discrimination"

As a result of this decision, according to Darren Roseblum, a law professor at Pace University, the law can now “truly implement the goal of treating all people equally without regard to sex, including people of all sexes, gender identities and sexual orientations.”

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Epoch Times featured Haub Law Professor Darren Rosenblum in "Wall Street’s Capitulation to Diversity Mandates"

02/27/2020

Epoch Times featured Haub Law Professor Darren Rosenblum in "Wall Street’s Capitulation to Diversity Mandates"

To rub salt into the wound, affirmative action has generally not helped employees down the ladder. A 2015 study by law professor Darren Rosenblum of Pace University found having more women on boards in France did not change the substance of corporate decisions such as layoffs. Rosenblum also found the views of female board members followed no distinct or favorable pattern.

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"New York Times" featured Pace University's Elisabeth Haub School of Law professor Darren Rosenblum in "Quotas for women: A Step Toward Equality"

02/27/2019

"New York Times" featured Pace University's Elisabeth Haub School of Law professor Darren Rosenblum in "Quotas for women: A Step Toward Equality"

To the Editor:

Re “Stop Counting Women” (Sunday Review, Feb. 24):

Katherine Mangu-Ward is right that it’s uncomfortable to count women. We can pretend that numbers don’t matter, as she suggests, but they do.

A few numbers: More men named James are C.E.O.s of Fortune 500 companies than all women combined, and only 5 percent are women. The boys in my daughter’s class are 19 times more likely to become chief executives. Leadership in our society, whether in government, industry or Hollywood, is male. We need change, desperately.

Ms. Mangu-Ward criticizes quotas, but six of the world’s top 10 economies mandate quotas, and women are leading these countries’ companies in large numbers — effectively reversing structural sexism. Counting quotas is not like counting calories. Quotas advance equality. It may be awkward to use identity for advancement, but without quotas, it is discrimination that determines success.

Minor improvements in equality don’t prove we’re on the right path, as Ms. Mangu-Ward asserts. Leadership is still stereotyped as male. Quotas for women help reverse sexism. They may seem radical, but they are no less radical than resigning ourselves to permanent inequality.

Darren Rosenblum

New York
The writer is a professor at the Elisabeth Haub School of Law at Pace University.

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"The Street" featured Haub Law Professor Darren Rosenblum in "JPMorgan CEO Jamie Dimon Reigns Over Wall Street's Last Boys' Club"

07/26/2018

"The Street" featured Haub Law Professor Darren Rosenblum in "JPMorgan CEO Jamie Dimon Reigns Over Wall Street's Last Boys' Club"

JPMorgan Chase & Co. (JPM) Chairman and CEO Jamie Dimon professes himself a feminist. But when it comes to gender diversity, his board of directors increasingly lags woefully behind those of rival Wall Street firms.

Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) recently added female directors to their boards, lifting the number of women to the threshold of three that some corporate-governance experts consider a critical mass. The percentage of female directors is 25% at Goldman and 31% at Morgan Stanley.

Yet at JPMorgan, the number of female directors has stalled out at two since 2006, representing just 17% of the 12-member board. That level ranks the bank in the bottom fourth of the Standard & Poor's 500 Index of large U.S. companies, according to BoardEx, a relationship-mapping service of TheStreet Inc.

The gender gap looks even more glaring when other big U.S. banks are included in the comparison. Wells Fargo & Co. (WFC) , which had a male-dominated board prior to a series of corporate scandals starting in 2016, has since shaken up its top echelon, installing a female chair and increasing the number of women to five, and the percentage to 42%. Bank of America Corp. (BAC) and Citigroup Inc. (C) also have five female directors.

Dimon's failure to add more women to New York-based JPMorgan's board has drawn criticism from some shareholder advocates, especially given the largest U.S. bank's role at the epicenter of global finance, and as a symbol of modern American capitalism.

A growing body of research has shown that boards with more women are better at decision-making and bring higher long-term financial returns, while some studies suggest that female directors are less likely to be taken seriously without a critical mass of at least three. And some experts say that women are more assertive in the boardroom than men and thus more likely to challenge CEOs on crucial topics, such as risk-taking.

That's especially important for a big bank like JPMorgan, whose primary business is taking risk -- on such activities as loans, derivatives trading and investment-banking deals.

"Having a less inclusive board has a lot of undesirable effects on the governance of the firm," said Darren Rosenblum, a law professor at Pace University in New York who has written research papers about diversity on corporate boards. "Chase is far from the riskiest bank, but it's in a risky industry, especially so now with all the uncertainty in the world."

Joe Evangelisti, a JPMorgan spokesman, noted that Dimon has pushed to assure that half of the 10 executives on his seniormost leadership team are women.

And by that standard, the bank is well ahead of rivals. At Wells Fargo, women comprise 44% of CEO Tim Sloan's top management team. The percentage is 38% for Bank of America CEO Brian Moynihan, 19% for Morgan Stanley CEO James Gorman, 17% for Citigroup CEO Michael Corbat and a lowest-in-class 14% for Goldman Sachs CEO Lloyd Blankfein.

But at JPMorgan, the gender parity stops at the top.

As more U.S. companies have pushed in recent years to increase the presence of women on their boards, with a heightened emphasis following last year's #metoo movement, JPMorgan has made zero progress since Dimon took over as the bank's chairman in December 2006. In fact, women's presence on the JPMorgan board has stayed constant since November of that year, when the number of female directors doubled to two under then-Chairman William Harrison.

Meanwhile, JPMorgan has allowed at least five elderly, longtime male directors to remain in their seats - despite the belief among some corporate-governance advocates that board members begin to act less independently after more than a decade on the board. They include Lee Raymond, 79, the former CEO of ExxonMobil Corp. (XOM) , who has served on the JPMorgan board for 31 years.

Dimon, 62, has a reputation as a leader in corporate America, having served on President Donald Trump's now-defunct Strategic and Policy Forum of top executives. Recently he teamed up with Warren Buffett's Berkshire Hathaway Inc. (BRK.A) and Jeff Bezos's Amazon.com (AMZN) to start a new healthcare company that will attempt to address the industry's challenges.

Asked if he was a feminist during an interview in December, Dimon said the answer was yes if the definition was a person who stands up for women's rights.

"I'm a humanist," said Dimon, a married father of three grown daughters. "I'm a people-ist." He added that he advises female employees to call out clients for inappropriate behavior, such as touching them on the knee.

Aside from the simple principle of fairness, the thesis that a higher percentage of female directors can improve corporate performance is supported by an organization called the 30% Club, of which the CEOs of JPMorgan's two biggest shareholders -- the money managers BlackRock Inc. (BLK) and Vanguard Group - are members.

Diverse perspectives help to foster healthier debates within boardrooms, the theory goes, resulting in more effective strategic decision-making and potentially higher long-term growth.

And the difference becomes clear when a board has at least three women, ensuring that their contributions will be fruitful, proponents say. The dynamic is partly explained by the reality that when there are least three women on the board, they're more likely to disagree with each other, forcing male directors to recognize that the women's individual perspectives aren't solely gender-based.

Companies with three or more female board directors in at least four of the previous five years reported a 46% higher return on equity, a key measure of profitability, than those with lower representation, according to a 2011 study by Catalyst, a nonprofit organization that advocates for boardroom diversity.

So while JPMorgan may be the largest and most successful bank in the U.S., its shareholders may be missing out on even greater returns.

Rosenblum, the Pace law professor, said other countries, such as France and the U.K., have developed more rigorous requirements for diversity on corporate boards. There's no similar requirements in the U.S., but JPMorgan's Dimon should shake up its board anyway, he said.

It's telling that JPMorgan has so many directors with such long tenures; turnover tends to lead to greater diversity, Rosenblum said. Greater diversity on the board also improves the chances that women will get hired into executive positions, as Dimon says he's sought to do.

"One certainly wonders whether that lack of turnover both deprives the firm of fresh insight but also reduces diversity," Rosenblum said. "It's great that he is including women in his leadership positions within the firm, but the board ultimately is in charge of deciding the most important things in the firm, including which CEO to hire."

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