What women employees say about Goldman Sachs’ culture

For female employees past and present, Goldman Sachs’ $215mn settlement of a long-running gender discrimination lawsuit was not just a reminder of the bank’s problematic history with women. Just weeks away from trial, it scuppered a chance for a useful airing of the practices that continue to plague the Wall Street firm.

“Behaviour could have been outed,” said Jamie Fiore Higgins, who was one of Goldman’s most senior female executives before she quit in 2016 and last year published Bully Market, a memoir of her 17 years at the bank. “And now guess what? They wrote a cheque.”

“Every generation has been better on a relative basis. On an absolute basis, it’s still terrible,” she added.

The Financial Times spoke to more than a dozen current and former female Goldman employees about their experiences working for the bank.

Their comments highlight perceptions that, despite some progress, Goldman is still grappling with some of the challenges outlined in the 2010 class action lawsuit. These include feelings that starting a family can stunt women’s careers in a way it does not for men, and that there are too few women in leadership roles.

“I would’ve been better compensated if I wasn’t a mom,” one woman who recently left the bank told the Financial Times. “For guys, most of the people I interacted with, their wives didn’t work.”

One current female employee, meanwhile, said “Goldman promises women for a long time they will be senior leaders, then don’t do anything about it”.

While the women interviewed said there were few signs of the overt sexism prevalent on Wall Street decades ago, they felt the bank’s culture remained less accessible to women without an interest in sports, and that speaking out on certain issues could still damage their careers.

“To me there was never explicit bias,” said another woman who recently left the bank. “It was harder to interact with some of the senior men in the same casual way that other male colleagues at my level could.”

One current junior female employee said that although “on a very theoretical level we are encouraged to speak up . . . in practice if you say something controversial it’s not well received”.

After announcing the gender discrimination payout — one of the biggest in US corporate history — Goldman Sachs said it was “proud of its long record of promoting and advancing women” and remained “committed to ensuring a diverse and inclusive workplace”. It has set a target of having a global workforce, currently around 45,000, that is evenly split between men and women, starting with its junior analysts and associates.

Female employees are better represented in Goldman’s junior ranks and one challenge for the company is retaining more of them as they become more senior.

Jacqueline Arthur, Goldman head of human capital management, insisted diversity was “a forward-looking priority for the firm”.

“Our analyst and associate class in North America was 45 per cent women, which reflects growth of 10 per cent in last 10 years,” she told the FT, while female representation in the ranks of managing directors and partners was also on the rise.

Ten of Goldman’s 31-person senior management committee are women but only two — Stephanie Cohen who runs the bank’s platform solutions business and co-head of the financing division Beth Hammack — are in charge of a revenue-generating business, a glaring scarcity for many of the bank’s female employees.

Goldman’s struggle to build a more diverse workforce is a reflection of trends in the broader financial services industry. A 2021 report by McKinsey and LeanIn.org found that women in North America “remained dramatically under-represented” in the financial-services industry, particularly in senior management roles.

Jane Fraser at Citigroup is the only woman running one of the major US banks and the leading contenders to take over as chief executive of another major Wall Street firm, Morgan Stanley, are all men.

“It’s not as though any individual is saying, ‘hey, let’s keep women back’ — that’s not how it works,” said Martin Davidson, professor of business administration and global chief diversity officer 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 industry.”

But Goldman faces a particularly acute challenge given its culture of round-the-clock work, which women feel often impacts them more than men.

“I really think Goldman is trying but there’s an industry problem and there’s a lifestyle problem,” said one female junior banker who recently quit Goldman.

“It’s actually more about opportunities and support as a woman 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 that run businesses.”

Outside of the management committee, women leading Goldman businesses include Kim Posnett, who was recently promoted to head the investment banking tech, media, and telecoms group, and co-head of the private wealth management business Meena Flynn.

The roots of the legal case date back to 2005 when Cristina Chen-Oster resigned from Goldman after eight years following what she alleged was consistent and systematic discrimination. She later filed a complaint with the Equal Employment Opportunity Commission, a US government agency.

Chen-Oster ultimately sued Goldman, partnering with two other former employees — Shanna Orlich, and Lisa Parisi — and built a class action case with more than 2,800 participants.

The allegations centred on Goldman’s performance evaluation practices of “360 reviews” and “cross-ruffing”, which involved interviews with peers and managers, and was used to inform pay decisions and promotions. The plaintiffs claimed the results of these processes clearly indicated ingrained bias against women at Goldman’s investment banking, asset management and trading business.

The lawsuit alleged that women returned from maternity leave with diminished career prospects and that Goldman managers, the majority of whom are male, had unchecked discretion over how they assigned projects to their teams.

One women who worked at Goldman Sachs during the period covered by the lawsuit described a culture in which going to HR to air issues made you “a pariah for life”.

“The firm provides various channels through which such concerns can be raised without fear of reprisal,” the bank said.

In the years since the lawsuit started in 2010, Goldman has addressed some of the allegations, including repurposing 360 reviews to focus on professional development rather than performance evaluation.

“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 continuing with several of these policies and agreed to hire an economist to identify gender pay gaps for the next three years.

Goldman does not release pay gap figures for its US business. The mean hourly pay difference between men and women at Goldman Sachs International, its main UK entity, was 53 per cent in 2022, up slightly on a year earlier, although it says men and women performing similar roles in a similar way receive equal pay.

Arthur said the bank offered “industry-leading benefits that support our female professionals”, which include at least 20 weeks leave for both men and women after having a child, 20 days leave in the event of miscarriage or pregnancy loss, and lactation rooms at its offices worldwide.

Goldman last year also named more female and black partners than ever before as part of a biennial ritual in which it fills its elite ranks. They joined other female partners including chief legal counsel Kathy Ruemmler, chief administrative officer Ericka Leslie and co-head of global financing Beth Hammack.

However, while women at Goldman welcome the efforts, some are sceptical real change will be felt quickly.

“You can’t criticise them for trying to make a change,” said a current employee. “We’ll see if they stick to it and if it has an impact.”

Additional reporting by Taylor Nicole Rodgers and Harriet Agnew

This article has been amended to clarify that two women in Goldman’s senior management committee are in charge of a revenue-generating business.