Complex financial instruments, lax regulation and greed typically get the most blame for causing the financial crisis. But former Bank of America executive Sallie Krawcheck sees another cause: a lack of diverse viewpoints on Wall Street.
“One of the biggest causes no one talks about is ‘groupthink,’” Krawcheck told the Observer this week. “The way to break groupthink is greater diversity. Gender diversity has gone sideways in Corporate America and backwards on Wall Street.”
Since losing her Bank of America post in a 2011 restructuring, Krawcheck is trying to reverse that trend.
In 2013, she bought a women’s networking group called 85 Broads, renamed it Ellevate Network, and is adding new chapters. On April 30, she will be Charlotte for the official kickoff of the new local chapter.
“The research I’ve seen points to networking being the No. 1 unwritten rule of success in business,” says Krawcheck, 50. “This is a way for women to access that to advance themselves in business.”
Ellevate is a private company that hosts educational events and webinars for its more than 34,000 members. Krawcheck says member dues cover expenses, but any profits are being reinvested. Ellevate doesn’t disclose financial information.
Krawcheck came to Bank of America in 2009 as one of the Charlotte-based bank’s highest-profile outside hires. The former bank analyst and Citigroup executive was given the challenging task of leading the wealth and investment management unit as the bank was absorbing brokers from its Merrill Lynch acquisition.
Soon after her arrival, CEO Ken Lewis, under fire for the Merrill deal, announced his retirement, and two years later new CEO Brian Moynihan eliminated her position as part of a massive cost-cutting program.
Krawcheck declined to talk about her time at the Charlotte bank, but in a 2013 post on the networking site LinkedIn she said she never felt part of the company’s inner circle.
“I was based in New York, the company’s headquarters were in Charlotte, the real center of power was in Boston and other senior managers were based in California,” she wrote. Moynihan, who joined Bank of America in the 2004 FleetBoston Financial acquisition, still lives in the Boston area.
After much speculation about what she would do next, Krawcheck bought 85 Broads, which was started in 1997 by former Goldman Sachs executives. The name refers to the address of the former Goldman headquarters.
Krawcheck and her team have since renamed the company, launched a new website and partnered with Pax World Investments on a mutual fund that invests in companies rated highly for advancing women. A portion of the network’s revenues are invested in the fund, and members can invest at a lower fee rate than nonmembers.
Charlotte chapter president Joanne Verkuilen said she was shocked when she found out cities such as Phoenix and Charleston had groups, but not Charlotte. She decided to launch the chapter in November, and it now has about 100 members.
“Charlotte is a prime location to build a vibrant women’s community that will benefit not only our members, but will have ripple effects across our local economy,” says Verkuilen, who is director of marketing and digital strategy at Charlotte investment bank BlackArch Partners.
Of the group’s more than 40 chapters worldwide, New York, Boston and London are the largest, but the Southern groups are fast growing, said Krawcheck, a Charleston native and UNC Chapel Hill graduate who lives in New York.
“There’s a special place in my heart,” she says, “for my Southern chapters.”
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Want to go?
Ellevate Network will hold its kickoff event April 30 at the Duke Mansion. To register, go to www.ellevatenetwork.com/events/4043.