As Wells Fargo starts the sixth month of its search for a CEO, an executive headhunter said the bank would be wise to break the mold in filling its C-suite vacancy.
"How smart would it be to get an incredibly talented woman to lead?" Jeanne Branthover, managing partner at DHR International, told Banking Dive.
Reuters reported in April that the bank had tapped Spencer Stuart as its executive search firm, with sources telling the wire service the goal was to find a woman who could successfully navigate Wells Fargo's regulatory and reputational issues.
The nation's fourth-largest bank is still reeling from a 2016 scandal during which employees opened millions of fraudulent accounts to receive sales-based incentives. Additional negative press followed over questionable practices in Wells Fargo's auto insurance, mortgage and wealth management divisions. And a report by The New York Times recently revealed that a policy allowed Wells Fargo accounts to remain open even after customers thought they had closed them, resulting in some customers being charged thousands of dollars in overdraft fees. The series of missteps, in turn, damaged the bank's stock.
Branthover, who specializes in executive recruitment for financial institutions, said choosing a woman to take the helm of the troubled bank would be a strategic move that could help repair its tarnished image.
"There's a risk in anybody that they put in. But on the whole, the fact that they recognize that a woman leader needs to be in financial services and the industry needs to do this more, it's actually going to make them look good," she said. "And anything that can make them look good, they're going to try to do."
'A woman's time'
The bank has been searching for a new CEO since March, following the sudden departure of Tim Sloan. The exit has hurt the bank's stock, which lost almost $24 billion since March, according to Bloomberg. C. Allen Parker, who had been the bank's general counsel, is serving as interim CEO during the search.
Placing a woman in the top spot of a major bank would not only garner some accolades, but it would also send a strong message to the rest of the male-dominated financial services industry, Branthover said.
"It is definitely a woman's time right now," Branthover said. "[Financial institutions] know they're way behind compared to other industries."
Lawmakers have noticed the sector's lack of diversity. CEOs from seven of the country's largest banks were called to testify in front of the House Financial Services Committee in April on a wide range of topics, including gender and racial diversity.
When asked by Rep. Al Green, D-TX, whether a woman or person of color would be a likely successor, not one of the CEOs raised a hand.
Five CEOs, however, did raise a hand when asked if a minority was likely to take the role in the next 10 years.
"[Banks should be] increasing their focus on recruiting through affinity groups and minority colleges and universities; closing the pay equity gap for women and minorities; and increasing investment in leadership and development programs for building a pipeline of diverse talent," the committee said, following the release of a survey that showed the industry's lack of diversity.
Whichever direction the bank chooses for its hire, Branthover said it's likely Wells Fargo's shortlist consists of both men and women.
The company approached Cathy Bessant, Bank of America's chief operations and technology officer, for the position in July, according to Bloomberg, but no further reports have emerged since.
"There are some exceptional women in financial services who could do this and do this well," Branthover said. "Now, would a woman take on a risk like this?
"Male or female, they're all going to think about it. But I think a woman leader could be excellent for women," she added. "If they fail, obviously, it's going to be terrible for women. But at the end of the day, anybody knows that being successful in that job is going to be tough whether you're male or a female."