Women at the helm of Israel's financial institutions

From the Governor of the Bank of Israel to three bank CEOs, women dominate the top echelons of Israel's financial system.

By VERED RAMON-RIVLIN/GLOBES
July 11, 2016 08:47
Karnit Flug at her office on February 3, 2015

Karnit Flug at her office on February 3, 2015. (photo credit: MARC ISRAEL SELLEM)

 
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 People familiar with Israel's banks and financial institutions can only look on in wonder at the number of women at the top in this country. The Governor of the Bank of Israel is Dr. Karnit Flug, the Deputy Governor is Dr. Nadine Baudot-Trajtenberg and the Supervisor of Banks is Dr. Hedva Ber.

And that's just the start. Dr. Ber's recent decision to accept to separate banks and credit card companies and the ensuing clash between the banking system and the regulatory authorities was something of an all-female affair.

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Three of the CEOs of Israel's big five banks are women Rakefet Russak-Aminoach at Bank Leumi, Lilach Asher-Topilsky at Israel Discount Bank and Smadar Barber-Tsadik at First International Bank. Furthermore, the controlling shareholder of a fourth bank Bank Hapoalim - is Shari Arison. Many of the top government regulatory positions are also in the hands of women including Accountant-General Michal Abadi-Boiangiu, Israel Antitrust Authority Head Michal Halperin and Supervisor of the Capital Market, Insurance and Savings Dorit Salinger.

It is not as if this is anything close to the norm elsewhere in the world. Save for US Federal Reserve chair Janet Yellen and IMF head Christine Lagarde, very few executives at the top of global financial institutions are women. At a recent international banking conference in Singapore, for example, only two of the 60 CEOs present were women one from India and Bank Leumi's Russak-Aminoach.

"Lady Globes" set out to discover how this unique financial female ecosystem came about.

The first reason, according to those involved, are the salaries. Recent legislation reduced the salary cap for a senior executive in Israel's financial system to NIS 2.5 million annually. One CEO told "Globes," "In all these positions, in the government and the regulatory authorities, you don't earn money here in Israel and that's what brings women to these jobs. Then there is the new legislation prohibiting higher salaries for bank executives. This law has only been able to get through because this is a female sector, otherwise they wouldn't dare to do such a thing."

Another bank CEO expresses similar sentiments. "This is a law motivated by hatred, although hatred of banks is not because of women. It's a slap in the face. It's a very extreme law that Israel is applauding but it will only bring mediocrity. I see my own executives and the light has gone out of their eyes."

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A second reason is that women tend to bring in more women. Although women are seen as more competitive and hostile towards each other, the reality is that women in senior positions lean more towards hiring talented and highly capable women for key posts.

Galia Maor, who served as Bank Leumi CEO from 1995 until 2012, nurtured Russak-Aminoach, Ber and Tamar Yasour, the CEO of Bank Leumi's credit card company Leumi Card. Yael Andorn, who served as director general of the Ministry of Finance under Finance Minister Yair Lapid in the previous government appointed Salinger and at the Bank of Israel, Flug appointed Baudot-Trajtenberg and Ber. She relies on them professionally, feel at ease with them on a personal level. In most cases women understand the outstanding advantages of other women in management positions. One bank CEO said, "When I appoint a person to a senior position, it makes me happier if it's a woman, and it gladdens me to see this strengthening trend."

A senior regulator said, "There is something that flows better, to my mind, between women than between men. Senior executives always have a lot of ego, but women spend less time looking to be at the front of the stage, and like being interviewed less and talking at conferences."

Is there anything special or different about a female management style? A senior Ministry of Finance official said, "Women are very responsible. If a woman doesn't think that she is good enough, then she won't take a job, while a man would. I always felt that with the female director general that I worked with, the channel was more open and direct, and very often lacked ego. There is a tendency to feel that women are manipulative but that is a result of their need to be more effective. They don't want to fall short. They reach their target with less twists and turns. I have very direct relations with female bankers."

Research finds that women are wired up with higher empathy than men. But does this help them in senior management positions and contribute to their success. After all regulators hardly need an excess of empathy. One CEO said, "Empathy. I don't think that regulators have any at all. They don't conduct business that way."

A third reason might be political correctness. A senior figure in the Israeli economy said, "It's certainly a contemporary trend. When Yair Lapid was Minister of Finance, he said that he would only appoint women. Maybe it looks like something that sells well. When a man appoints a woman it goes down well in the media. Many decisions that are taken are because they look good in the media and that plays out for the benefit of women."

Flug was not Prime Minister Benjamin Netanyahu's first choice as Governor of the Bank of Israel or even his second choice. She had been Deputy Governor and her boss Stanley Fischer recommender that she be his successor. Flug's elegant restraint in the face of Netanyahu's behavior was seen as a sign of weakness. Why wasn't such a senior woman banging her hands on the table? In light of the general vulgarity and aggressiveness in Israel's public dialogue, such an ethic does not help women. One female executive said, "You would never hear an aggressive female regulator behave like Minister of Finance Moshe Kahlon did when he spoke about Raya Strauss. Women do not have an abrasive style."

Relations between the three women at the top of the Bank of Israel are believed to be very harmonious. One senior bank executive said, "I feel more comfortable with female CEOs than with men. It is less formal, more sincere, comfortable and open."

"There is female camaraderie among the female bankers but there is also competition but with less ego and more mutual support. People talk about catfights but I always know that if I need something or need to consult over some furor with the employees, the other women will rally around me. If the rival bank was headed by a bitch then I wouldn't be able to talk to her but that's not the situation. The dialogue is one of helping each other and that's different from the dialogue with men."

However, this female collegiality does not necessarily extend to relations between the female bankers and female regulators. "The fabric of relations between the business sector and the regulators is very difficult and eclipses any common ground such as gender. Sisterhood could make the relationships much better but this is such a complicated time that there is nothing there for relations between women."

"Sisterhood," asks one senior female official at the Ministry of Finance. "At present there is such a deep and fundamental hostility that no sisterhood could cover that up."

Will the prevalence of women at the top of Israel's financial pyramid strengthen? One senior female bank executive said, "I'm not certain that this trend of female leadership will sustain itself. It's a coincidence. Maybe in the future they'll talk about women at the top during this period."

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