Alison Rose’s elevation to the top job at RBS, where she will succeed Ross McEwan as chief executive, is cause for celebration.
Never before has the UK had a woman running one of its big four banks. Rose’s achievement is all the more remarkable for her journey through the bank, not so much for being one of the survivors after its near-demise in the 2008 financial crash, but for gaining experience in most key departments over a career spanning 27 years.
The case of Stacey Macken epitomises behaviour across the City, if not the entire financial services sector, where constant sniping, usually under the guise of “banter”, can eat away at women’s confidence.
Macken sued the London office of BNP Paribas for £4m on two counts. The first was on the basis of unequal pay, claiming she was discriminated against because of her gender and paid significantly less than a male co-worker with the same job title. A further claim related to harassment was dismissed. She complained that her colleagues adopted and relentlessly repeated the standard response of “not now Stacey” used by a manager to many of her queries.
The Chartered Management Institute has welcomed Rose’s appointment, but laments how the Macken case shows that after each step forward in the finance industry, there is usually also a step back. McKinsey research has shown that companies with the greatest gender diversity in the boardroom are 21% more likely to be more profitable than their peers and 27% more likely to create superior value.
These figures are quoted in a recent report for the government by Rose, who was asked to review how banks could better serve women who want to start a new business. To illustrate how sexism is endemic in the finance industry, she pointed out how only 1% of all-female startup companies are backed by venture capital funds.
It will be interesting to see whether Rose, now she is the boss at RBS, carries through some of her recommendations, one of which was to “review existing and create new banking products aimed at entrepreneurs with family care responsibilities”.
If Rose is serious about making changes, she will be part of a broader trend. The UK has seen progress in its top 350 companies over the past eight years. In 2011 there were 152 all-male boards. By last year this had fallen to five. Also, FTSE 100 companies are on track to meet the target of having 30% of board positions occupied by women by 2020.
But as former RBS chairman Sir Philip Hampton is well aware, the vast majority of women on boards are non-executives. There are few chief executives, finance directors, company secretaries or heads of operations. Even among non-executives, few hold the position of chair. That at least may be about to change. The Financial Reporting Council wants chairmen and chairwomen to step down after nine years. Given the age of many of them, there could be as many as 120 vacancies across the FTSE 350 in the next couple of years.
Companies should grab this opportunity and end the tokenism that has blinkered their previous actions. Before long they will probably raise their productivity, or the amount of money generated per worker. This means higher wages for all – women included.
Frustrated by Powell’s determination to play a measured, almost anonymous role as central bank chief, the US president has taken to calling him names and accusing the Fed of negligence to provoke him into policy action. In August, he wrote on Twitter: “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”
Trump’s mission is to force through a dramatic reduction in interest rates to boost borrowing and consumer spending before his re-election campaign next year. With the economy expected to slow in 2020, the president wants to give it an amphetamine shot courtesy of an interest rate cut to zero.
Last week, Powell gave a nod to Trump when he sanctioned slicing a quarter of a percentage point off the base rate, leaving the target range at 1.75% to 2%. The Fed committee verdict was split, leaving it unclear where rates would go next. Without hesitation, Trump tweeted: “Jay Powell and the Federal Reserve Fail Again. No ‘guts,’ no sense, no vision! A terrible communicator!”
Trump has a point when he accuses Powell of poor communication. The former lawyer appears to believe that he looks strong, snipping away gently at interest rates in the face of markets and the president baying for cheap credit. The opposite is true: it only allows his critics to shout louder.
Yet Powell should stand his ground. It is Trump’s trade war with China that lies behind the slowing global economy and the declining growth in the US and China in particular. If Trump could stop flip-flopping in his battle to reduce China’s trade barriers, there would be a stronger recovery than anything interest rates could offer.
So Debenhams limps on after successfully fending off a legal challenge bankrolled by arch-rival Mike Ashley – owner of rival department store chain House of Fraser – that threatened to push it into administration.
Ashley, bitter after losing a £150m bet on the struggling department store’s shares, is now out of ammunition for the time being. So Debenhams can get back to attempting to rise from the ashes in the wake of the April rescue deal that saw it taken over by its lenders.
First on the to-do list for Stefaan Vansteenkiste, the new chief executive, is the company voluntary arrangement (a popular insolvency tool used by retailers to close unwanted stores and cut its rent bill) announced earlier this year. That plan will see at least 22 of its 166 UK stores close in January, but beyond that the outlook for a business operating in one of UK retail’s least-loved sectors remains uncertain.
There is also a grim read from the rival John Lewis department store chain, which a fortnight ago revealed that it had made a £26m loss in the first six months of its financial year as the moribund housing market and Brexit-related uncertainty hit demand for expensive home furnishings.
There is not much encouragement to be found from House of Fraser either. A year after its rescue by Sports Direct, it is losing more than £1m a week and Ashley reckons the problems could be “terminal”.
Shutting a few shops simply won’t solve Debenhams’ biggest problem, which is that its retail offer is hideously outdated. Its stores are very old-fashioned and some of its in-house clothing brands – linked to designers that few shoppers under 40 will remember from the catwalk – can barely be described as fashion any more. It ne a total reinvention. According to accountant PwC, about half of retailers who opt for a CVA still go on to fail, and there is no reason so far to think Debenhams will be in the successful half.