Woman CEO takes over California-based bank as new gender diversity law comes into effect.
When Kelly Coffey takes over as CEO of City National on February 1, she becomes the bank’s first female CEO. A California-based subsidiary of Royal Bank of Canada, City National is the 38th largest commercial bank in the US, according to the Federal Reserve, with $48.9 billion in total assets. Outgoing CEO Russell Goldsmith will remain as chairman.
Coffey spent more than 25 years at JPMorgan in investment banking and in asset and wealth management. She has been CEO of its US private-banking arm since 2013.
Coffey’s achievement remains relatively rare. Women constitute more than half the entry-level workforce in financial services, for example, but represent less than one in five C-suite executives, according to a report this year by McKinsey & Company.
In California, a new law mandates gender diversity on the boards of publicly traded corporations based in the state. Similar to laws enacted in Norway, Iceland, Finland and Sweden, the measure requires one female director appointed by the end of 2019 and up to three by the end of 2021, depending on the number of board seats. Companies that don’t comply or report board gender ratios will be subject to fines ranging from $100,000 to $300,000. Norway, the first country to introduce a board-level gender quota, has the highest percentage of board seats held by women, at 42%, according to a Deloitte Global report in June 2017.
Yet diversity brings more benefits than disadvantages to business. Numerous studies demonstrate that women often outperform men in portfolio management. A 2011 study by Catalyst found that companies with the most women board directors outperform those with the least women directors in return on invested capital by 26%, for example. Companies in the MSCI World Index with strong female leadership generate an ROE of 10% on average compared to 7.4% for those without.