BlackRock, SSGA tout diversity efforts at House subcommittee hearing

December 9, 2021

Stakeholders from two of the nation's largest money managers on Thursday discussed with lawmakers the benefits of diversity and inclusion initiatives for the investment industry and the need to do more.

The House Financial Services Subcommittee on Diversity and Inclusion hosted a hearing in which representatives from BlackRock, State Street Global Advisors testified. The hearing followed the Monday release by Rep. Maxine Waters, D-Calif., chairwoman of the House Financial Services Committee, and Rep. Joyce Beatty, D-Ohio, the subcommittee chairwoman, of a report examining diversity and inclusion at the nation's largest investment firms. The report offered a series of recommendations, including that firms should collect disaggregated data regularly on workforce, executive and board diversity; consider at least one diverse candidate for all executive positions and board positions when there are openings; and develop pipeline programs for diverse asset managers to manage increasingly larger portfolios.

"While this report and hearing will not transform the industry overnight, we seek to bend the arc of progress and expand business and employment opportunities for both men and women and minorities by opening our eyes and drawing attention to the glaring inequities in this corner of our society," Ms. Beatty said at Thursday's hearing, which also included representatives from the Investment Company Institute, the National Association of Securities Professionals and Government Accountability Office.

Michelle Gadsden-Williams, managing director of human resources and global head of diversity, equity and inclusion at BlackRock, testified that the firm last year committed to increasing its overall representation of Black and Latinx employees by 30%, to double the number of Black and Latinx senior leaders, and to increase its senior female representation to 32.5% by 2024. "We are on track to meet these goals," she said.

Moreover, 48% of BlackRock's new hires so far this year were women, 15.3% of its U.S. hires identify as Black, 8.9% identify as Latinx and 28.5% identify as Asian, Ms. Gadsden-Williams said.

Cyrus Taraporevala, State Street Global Advisors president and CEO, said his firm has increased the racial diversity of its corporate board to 25% from 9% since July 2020, adopted a global diverse candidate slate requirement for middle management and is undertaking "a full civil rights audit."

"Sustainable, meaningful advancements in diversity and inclusion require enduring changes to the way we all operate, and State Street — and I personally — are committed to staying that course," Mr. Taraporevala said.

Subcommittee members asked pointed questions to the witness panel, mostly addressed to Mr. Taraporevala and Ms. Gadsden-Williams, including ones on diversity promotion and contracting figures, but specifics were tough to come by in several instances.

"I'm concerned that BlackRock and State Street have not done enough to ensure actual diversity in business, specifically contracting with diverse asset managers and related businesses," Ms. Waters said during her line of questioning.

Both Mr. Taraporevala and Ms. Gadsden-Williams said diversity and inclusion are important areas for their firms. "It's an area of opportunity for us, but we certainly recognize that we have a lot of work to do there," Ms. Gadsden-Williams said.

Moreover, 48% of BlackRock's new hires so far this year were women, 15.3% of its U.S. hires identify as Black, 8.9% identify as Latinx and 28.5% identify as Asian, Ms. Gadsden-Williams said.

This article was originally published by Pensions and Investments on December 9, 2021.