Banks aim for diversity at the top. Can they do more?
Executives from the financial institutions who received TARP funds testify before the House Financial Services Committee February 11, 2009 in Washington.
The NAACP has issued a report card on diversity in the retail banking industry, and it doesn’t look good. The report is focused on the lack of minority suppliers as well as the lack of diversity in upper management positions in banking, and the highest grade, a C+, was scored both by Citibank and Bank of America. The lowest grade, a D+, was given to US Bank. While banks do have a lot of diversity programs, like recruitment and training, the NAACP says minorities don't stick around.
If you want to fix a problem like lack of diversity in the banking industry, Dedrick Muhammad, senior director of the Economic Department at the NAACP says just being not racist is not enough.
"If someone starts off with greater wealth in their families, with greater access to educational opportunities, have family members that are in a much broader array of well paying jobs, they’re starting off ahead," he says, adding that a lack of prejudice today doesn’t do enough to make up for bias of the past.
"The kind of more passive approach of 'we’ll just bring people in through the teller jobs or maybe through mid to lower management and they’ll just work their way up' -- they’re not working their way up," says Muhammad.
JP Morgan Chase had no comment on the study. The other banks cited in the study did release statements: Wells Fargo and Bank of America acknowledged they have work to do; USBank said it is disappointed in the results and is working to improve; Citibank notes diversity is a major
Fabiola Dieudonne, a senior associate with the Center for Talent Innovation, which consults with banks to help them work on issues of diversity, says a big problem is that minority workers don’t get the honest feedback they need. Their supervisors, she says, say they’re afraid they’ll be misunderstood.
"Are you going to think that I’m being prejudiced?" she says they ask themselves. "Are you going to think I’m treating you differently than the next person?"
Dieudonne says supervisors "don't want anyone that you’re providing feedback to to go away feeling that way, so people just tend to avoid it altogether,” she says.
In addition, Dieudonne says, minority workers don’t get enough sponsors. (A sponsor is like a mentor but much more aggressive on your behalf.)
“They’re not getting as many sponsors because the sponsors that are sponsoring others, are sponsoring people that may look like them," says Dieudonne, adding that this isn’t racism. We’re much more comfortable, she says, on a subconscious level, with people like ourselves.
Dieudonne says these are the kinds of problems which prevent minority workers from getting the support they need to develop executive presence -- the "it factor" that can carry them to the C-Suite.
Eveyln Tressitt, President of Grey Pearl Advisors, LLC , has that "it factor". She’s now a corporate consultant, but she used to work for big banks in human resources and as a COO. Banks, she says, need to get better at anticipating openings -- "and look at where you can build a pipeline for that opening. So it might mean you have to hire people in advance of when that opening is available."
Tressitt says that for diversity in banking to become a reality, it has to hit the top of the agenda everyday. In the meantime, Dieudonne says both corporations and multicultural workers continue to lose out.
"People see that you have the capability," she says. But something is missing. "You’ve spent all this time making sure you’re part of this culture, you’ve conformed to what we see, a white male standard at leadership, you’ve conformed to that. So when you get to the point where you can reach over this hump and get there, you’ve lost a little bit of yourself."
When Sally contacted the banks cited in the study, here's how five of them responded:
“We welcome the opportunity to receive feedback on our progress, and acknowledge that we have areas of opportunity for us to improve on our diversity and inclusion efforts. We have a strategic plan with measurable goals in place that intentionally focuses on these areas, and we are monitoring and measuring our progress.”
declined to comment
Bank of America
"Retaining top diverse talent has been and will continue to be a key priority for us. We are proud to have a culture that prioritizes diversity and inclusion at all levels, and while we’ve made significant progress in several areas, we understand there is more work to do. We will continue our efforts through targeted recruiting and internal programs to support and advance top diverse talent throughout our organization."
"At Citibank, fostering a dynamic and diverse workforce is a major priority. Having talent that reflects the diversity of our customer base is one of the keys to our success as a business, and we take active steps to recruit, train and promote accordingly. We take seriously and participate in numerous external reports and reviews, including the NAACP Opportunity and Diversity Report Card study, to benchmark our work and help identify opportunities for further strengthening our practices. We take pride in the gains achieved through our diversity initiatives, and we remain committed to prioritizing this important issue.
Further background: Priority workforce diverse objectives are defined annually and implemented through the Citi diversity operating committee, comprised of diversity and human resources professionals, as well as local business and regional diversity councils. The Citi Board of Directors reviews progress. Programs and initiatives are in place across our businesses to support and foster Citi’s diversity strategy. These include, among others, leadership development programs, employee networks and diversity-focused recruitment programs. Since 1999, we have communicated our progress through our Diversity Annual Report.
Citi has been widely recognized by external organizations and publications for its diversity initiatives. Calvert Investments which recognized Citi as the most inclusive company in the S&P 100 for women and minorities, and Working Mother Magazine, has named Citi to their “100 Best Companies” for 23 consecutive years and “Best Companies for Multicultural Women.” Diversity MBA Magazine recognized Citi as one of the Top 50 Best Places for Diverse Managers & Women and Exelon recognized Citi as one of the Top Banks, for Diversity and Inclusiveness. Citi was named the number one Diversified Financial Industry Sustainability Leader by the Dow Jones Sustainability Index (DJSI). Citi has been on the DJSI North America Index and DJSI World Index since 2001."
"We take the NAACP’s findings seriously. While we are pleased to have received the organization’s highest scores for our board diversity and our branch locations in African-American neighborhoods, we are disappointed in the overall result and are working to improve our performance. We have made significant progress in several areas since 2011, which was the timeframe when the data that was analyzed.
U.S. Bank strongly believes in the power of diversity – for our bank and in the communities we are proud to serve. We will study the recommendations from the NAACP, and we have committed to partnering with them on ways we can improve."