High Finance

Career bank executive Betsy Duke awaits action on Fed nomination

By Michelle M. Falck

If a glass ceiling exists within the banking and finance industry, Elizabeth “Betsy” Duke clearly didn’t get the memo. Or maybe she carries a hammer in her briefcase. Suffice it to say, she has not allowed any ceiling to impede her professional success, and powerful people have taken notice.

In May 2007, President Bush announced Duke as one of his nominees to the Board of Governors of the Federal Reserve System to fulfill the remainder of a 14-year term expiring in January 2012. If her nomination is approved, Duke, who holds an M.B. A. from Old Dominion University, will become the seventh female appointed to the board since its formation in 1913.

Since the early ’80s when the term “glass ceiling” was coined to describe the unofficial policy that prevents women and minorities from obtaining upper-level management positions, experts have debated the factors contributing to this barrier and even whether it exists. According to a 2006 “Diversity in the Finance Industry” report by the U.S. Equal Employment Opportunity Commission, the number of women who are officials and managers in the central banking, banking and credit sub-sectors averages about 48 percent. Unfortunately, the report does not segregate the data to show how many hold the most senior-level management positions, but other institutions have analyzed the situation.

A 2006 study sponsored by Financial Women International Foundation looked at the U.S. financial services industry, focusing on the 100 largest nationally chartered commercial banks, the top 100 community banks (state-chartered) and the 100 largest credit unions based on asset size. Its findings indicate that women have realized little upward career progress in this sector. Among the commercial and community banks surveyed, 29 percent had no women executives. For credit unions, the disparity was significantly higher, at nearly 43 percent. Using data from 2005, only four commercial banks had a female CEO, eight had a female CFO and a mere 17.9 percent of their executives were women.

Elizabeth Duke, however, has managed to defy these odds. From 1978 to 1984, she was the vice president and chief financial officer of the Bank of Virginia Beach. From there she went to work for the Bank of Tidewater, holding first the position of vice president and chief financial officer, then president, and later, chief executive officer. She also has served as both president and executive vice president at SouthTrust Bank, and executive vice president with Wachovia Bank, and currently serves as senior executive vice president and chief operating officer for TowneBank, based in Portsmouth.

Impressive accomplishments for a woman who began her professional career 30 years ago as a bank teller and whose academic pursuits started in a field far removed from banking and finance. Duke, a Portsmouth native who grew up in Virginia Beach, originally attended North Carolina State University as a physics major, and later transferred to the University of North Carolina at Chapel Hill where she graduated in 1974 with a bachelor of fine arts in drama.

Drama? Yes, life’s path often takes many unexpected twists and turns. The year after receiving her B.F.A., Duke started working in Virginia Beach at First & Merchants National Bank. Asked what led her from an interest in acting to a career in banking, she replied matter-of-factly, “I needed a job.”

That economic motivator proved to be a fortuitous event that introduced her to a new passion – banking – and led her to enroll in Old Dominion University’s M.B.A. program, from which she graduated in 1983.

“I had really become fascinated with the banking business and was taking on increasing responsibilities. I started to feel the lack of any formal business education. I went to ODU because I could complete the program on a part-time basis while continuing to work in the bank full time,” said Duke.

“I think the most positive thing for me throughout the program was the focus. At that time most of the M.B.A. students were either currently working or had experience working in real businesses. So all of our discussions had a very practical tone. We were all looking for ways to use the concepts learned the next day rather than sometime in the future. When we worked on projects, there was never a shortage of real-world problems for us to tackle.”

Bruce L. Rubin, the current director of Old Dominion’s M.B.A. program, has served on several committees with Duke, whom he has known for 20 years. “We in the M.B.A. program and the College of Business and Public Administration are extremely proud of the many successes Betsy Duke has had over the years in the local banking community and at the national and regional levels as chairman of the American Bankers Association and as a [board] member of the Federal Reserve Bank of Richmond,” he said. “Her nomination as a governor of the Federal Reserve board is further confirmation that Betsy is both an outstanding banking professional and a wonderful individual.”

Duke’s professional ascent has included roles that extend beyond that of bank executive. She has been an instructor of bank management and BankSim courses at several bank management schools, and serves on the board of directors of numerous local and regional organizations. She is a member of the executive advisory council for ODU’s business school, and is a former member of the university’s Educational Foundation board.

But it is within the national banking industry where Duke really has managed to wield the glass-shattering hammer. In 1999, the Virginia Bankers Association elected her its president, the first woman to be so honored since the association’s founding in 1893. She served on the board of directors of the Federal Reserve Bank of Richmond, and in 2004 achieved another first: the American Bankers Association elected her to be the first female chairman of the banking industry’s national trade association.

These achievements soon drew the attention of the Virginia General Assembly. In a House Joint Resolution offered in 2005, Duke was commended for reaching “the highest level in her chosen industry,” for breaking the “glass ceiling,” and “on her career achievements and for providing an exceptional role model for women in the banking industry, in Virginia, and nationwide. …”

That same year, US Banker, a banking trade magazine, named Duke as one of the 15 most powerful women in Washington.

Asked to recall her thoughts when she learned of this distinction, she replied, “I think it’s always great when someone shines a spotlight on the contributions women are making to the banking industry. My inclusion in the Washington list was really a reflection of the work done by the whole American Bankers Association. I was chairman of the ABA that year.”

Should Duke be approved for the Federal Reserve post, she would join six others on the Board of Governors, who are tasked with overseeing the country’s central bank. Founded by Congress nearly a century ago “to provide the nation with a safer, more flexible, and more stable monetary and financial system,” the Fed has seen its role in banking and the economy expanded over the years to include: conducting the nation’s monetary policy; supervising and regulating banking institutions; maintaining the stability of the financial system; and providing financial services to depository institutions, the U.S. government and foreign official institutions.

Addressing the U.S. Senate Committee on Banking, Housing and Urban Affairs at her Federal Reserve System nomination hearing on Aug. 2, 2007, Duke, in her prepared statement, assured the hearing committee of her “full appreciation of the responsibility entrusted to a Federal Reserve Governor.”

Citing her experience serving on the board of directors for the Federal Reserve Bank of Richmond, as a community bank officer and as an instructor, she noted, “The importance of safety and soundness in our banking system is part of my DNA. It is the most important experience I can bring to the Federal Reserve.”

According to Duke, the next step in the nomination process will be a vote by the Banking Committee and then a vote in the full Senate. She does not know when they will occur, but did remark, “I am anxious to complete the confirmation process and join the Federal Reserve board.”