A report by Max Abelson and Zeke Faux published this week by Bloomberg reveals that a different kind of male culture is dominant in the real world of high flying Wall Street executives. Abelson and Faux report that a network of fraternity brothers exists that effectively tilts the playing field against women, among others.
Conor Hails, head of the University of Pennsylvania’s Sigma Chi chapter, was in a Philadelphia hotel ballroom last month for a Barclays Plc (BARC) recruiting reception. A friend pointed out a banker from their fraternity. Hails, 20, approached with a secret handshake.
“We exchanged a grip, and he said, ‘Every Sigma Chi gets a business card,’” Hails recalled. “We’re trying to create Sigma Chi on Wall Street, a little fraternity on Wall Street.”
As students vie for 2014 internships in an industry where 22-year-olds can make more than $100,000 a year, interviews with three dozen fraternity members showed a network whose Wall Street alumni guide resumes to the tops of stacks, reveal interview questions with recommended answers, offer applicants secret mottoes and support chapters facing crackdowns.
That’s one reason men continue to dominate on Wall Street, where no woman has run a big bank. General Motors Co. (GM) announced Dec. 10 it would make Mary Barra the auto industry’s first female chief executive officer, the same day research firm Catalyst Inc. showed women holding about one in eight executive roles in US finance.
The fraternity pipeline helps undergraduates beat odds three times steeper than Princeton University’s record-low acceptance rate, with Goldman Sachs Group Inc. (GS) choosing 350 investment-banking interns this year from 17,000 applicants.
Penn’s Alpha Epsilon Pi, which gave up its charter in 2012 to escape sanctions for hazing, got a member into Morgan Stanley for the fourth year in a row. Dartmouth College’s Alpha Delta, an inspiration for the 1978 comedy “Animal House,” sent someone to the New York-based firm from the fifth consecutive class days after a New Hampshire court reprimanded the chapter for providing alcohol to someone underage, filings show.
Fraternities retain influence in the face of scrutiny by parents, politicians and police for binge drinking, hazing and at least 60 deaths in the US since 2005. A freshman at Baruch College in New York died this month after suffering a blow to the head during a Pi Delta Psi hazing ritual, according to Monroe County, Pennsylvania, District Attorney David Christine.
The largest U.S. banks say they are meritocracies and run diversity programs to shift an industry that once only let women onto the New York Stock Exchange floor as clerks during wartime shortages. Goldman Sachs added 10 women last year to a partnership that had one when CEO Lloyd C. Blankfein was elected to it in 1988.
“There obviously has been much progress since 20 years ago,” said Siegfried von Bonin, head of Dartmouth’s Alpha Delta chapter. “But the reality is that it’s still very much a male-dominated culture.”