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Citigroup CEO faces 'glass cliff' as she embarks on major turnaround

When women get the top job, it's often at companies that are in crisis

Citigroup CEO faces ‘glass cliff’ as she embarks on major turnaround

Citigroup is in the midst of a turnaround, and all eyes are on CEO Jane Fraser. Photo by Scott Webb on Unsplash

What you probably already know: Jane Fraser stepped into the role job at Citigroup in March 2021 and knew it was very much a turnaround job. After 20 years of underinvestment and strategic missteps, the bank was struggling. It’s stock price was stagnant, stuck 80% below its high from 15 years previous. The Wall Street Journal this week took a look at Fraser’s plan and what to expect as she pushes forward.

Why? While rivals such as JPMorgan Chase and Wells Fargo have overcome the financial challenges (self-inflicted or not) of the last decade, Citigroup has struggled. That has increased calls to break up the bank to maximize its strongest business lines, while regulators push for better internal controls. That issue was put in the spotlight in August 2020 when an employee accidentally wired $900 million to creditors of Revlon.

What it means: When women break the glass ceiling, it’s often so they can stand at the edge of the so-called glass cliff. The term was coined years ago by researchers at the University of Exeter to describe when women are appointed to roles to fix companies in crisis, generally because of what’s called “status quo bias.” Basically, leadership needs a change, and gender is seen as that change. It also means women are often placed in more precarious situations than their male colleagues, with farther to fall when things go wrong.

What happens now: The WSJ’s piece on Fraser is well worth a read. Fraser comes from the consulting world but then joined Citi 20 years ago, so understands the internal issues as well as anyone. She’s cut about 20,000 jobs and spun out some poor-performing business lines. She’s also promising transparency and laying out her plans for all the stakeholders to see, which can be well-received and also risky. She also seems to have a sense of humor about it all and even pulls pranks on her team. She has a serious challenge ahead but if she can pull back from that cliff, hers could be one of those success stories that ends up being taught in classrooms the world over.

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