BOSTON Lehman Brothers' LEH.N ousting of its female CFO, who had been the most powerful woman on Wall Street, exacerbated concerns about why so few women survive in the financial world's executive suites.
Erin Callan, once considered a contender for Lehman's CEO job, is neither the first nor the last high-profile executive -- male or female -- to lose her job as financial firms suffer.
But news that Callan had been demoted prompted groans from several investment managers and researchers who have long bemoaned the small number of women working in finance's upper echelon. Her role as Lehman's public face as the investment bank struggled to cope with damage from the credit crisis only increased the impact.
"Someone had to be the fall guy and it is debatable whether she had to be it," said Matt McCormick, portfolio manager and banking analyst at Bahl & Gaynor Investment Council.
"But Callan was the most public figure to defend the firm, and management clearly wanted to take a prominent step to give a clear signal that change will happen," he added.
Because so few women work at the top of financial firms, analysts agree that whenever someone loses her job, it is inevitably a bigger story than when a man is cut.
"The attention Erin is getting is because she is a woman in a leadership position not for her work as a chief financial officer," said Lois Joy, director in research at Catalyst, a nonprofit organization focused on women in the workplace.
Phil Purcell was forced out at Morgan Stanley (MS.N) but many people remember the big splash when Zoe Cruz was fired by Purcell's successor, John Mack. Chuck Prince made big news by pushing Sallie Krawcheck out as Citigroup's (C.N) chief financial officer before he lost his own title as CEO last year.
Lehman's decision to send Callan, a lawyer, back to its investment banking division may be especially awkward because the company long tried to boost diversity, analysts said.
"For them to follow up on their policies with this sort of action is not a great statement," said Jeff Greene, a vice president at recruiting firm Battalia Winston.
Among the U.S. Fortune 500 companies, only 7 percent have a female chief financial officer, Catalyst's Joy said, adding that these numbers inevitably cast the spotlight on a woman's more feminine side.
"Because of gender-based stereotyping, we see men as being the better problem solvers and women in a more nurturing role," Joy said. Research proves men and women often lead in very similar ways, she added.
In Callan's case, some analysts detected mistakes.
"She jumped into a crisis," said Brad Hintz, analyst at Sanford C Bernstein and a former Lehman CFO.
"She knows the markets very well, and can describe what's happening in the marketplace very articulately. But she's not an accounting person. She made some misstatements regarding things like Level 3 assets," Hintz said in reference to hard-to-value assets.
Those mistakes came at a time when investors were no longer willing to give anyone the benefit of the doubt and Lehman's share price fell sharply.
"She has been doing an outstanding job standing up for the company, but at the end of the day a head had to roll and that was regardless of whether it was a woman or a man," said one large hedge fund manager, who owns Lehman shares and asked not to be identified.
But Callan was criticized for more than her professional actions. Her personal style and shopping habits described in a recent news story also drew fire, analysts said.
"The fact that her fashion sense was profiled so prominently probably did not help her. That kind of press never does anyone any good," said Battalia Winston's Greene.
Companies like Lehman might do better with more women on board and in the board room research shows.
Last year Catalyst released a report showing that big companies with the greatest number of female board members on average have significantly better financial performance than those with fewer women.
(with additional reporting by Christian Plumb and Martha Graybow in New York, editing by Leslie Gevirtz)