New Data Finds Financial Institutions Need to Improve Diversity Efforts
WASHINGTON, D.C.—Today, Chair of the House Financial Services Subcommittee on Diversity and Inclusion Joyce Beatty (OH-03) and Chairwoman of the House Financial Services Committee Maxine Waters (CA-43) released findings on diversity and inclusion data and policies from eight of the largest U.S. banks. Receiving formal requests from Beatty and Waters were the Bank of America Corporation, Bank of New York Mellon Corporation, Citigroup, Inc., Goldman Sachs Group, Inc., JP Morgan Chase & Co., Morgan Stanley, State Street Corporation, and Wells Fargo & Company. The data requests were designed to inform Congress of the diversity levels, policies, and practices of the country’s largest financial institutions.
“This data is extremely important because diversity in the boardroom and among leadership results in better jobs, increased wages, and a stronger economy that benefits all consumers—whether that be women, African-Americans, homebuyers, millennials, seniors, rural or urban communities, and the list goes on,” Beatty said. “Based on these initial findings, it is clear that our nation’s financial institutions can do a better job hiring, promoting, and fostering more diverse talent at all levels of leadership.” Beatty continued, “That is why the work of the Diversity and Inclusion Subcommittee, of which I have the extreme honor to chair, is so important. When the financial industry is more reflective of America’s rich diversity, our country and economy succeed.”
Highlights from Beatty and Waters’ data requests are as follows:
- There are no female or minority CEOs.
- Less than 25 percent of senior leadership is comprised of women and/or minorities.
- There is no chief diversity officer currently reporting directly to the CEO.
- 50 percent of the financial institutions spent more than $1 billion on diverse suppliers in 2018.
- Less than 1 percent of total spending went to diverse asset managers and suppliers.
- Only 4 percent of externally managed assets go to diverse-owned firms.
Policies and Practices
- Diversity metrics are not tied to compensation and only half of the banks tie it to performance.
Banks are making progress in diversity and inclusion but there is much more work to do, including:
- Increasing focus on recruiting through affinity groups and minority colleges and universities;
- closing the pay equity gap for women and minorities; and
- increasing investment in leadership and development programs for building a pipeline of diverse talent.
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