The diversity question is hitting home for 37 major financial services firms in the U.S. in a new way.
Congresswoman Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, and Congresswoman Joyce Beatty (D-Ohio), chairwoman of the House Financial Services Subcommittee on Diversity and Inclusion, recently sent out letters asking these firms to quantify their diversity and inclusion policies from 2015 to the present.
The letters were sent to bank holding companies that have more than $50 billion in assets. “Unfortunately, a complete picture of diversity and inclusion in the financial services industry cannot be obtained until the financial services industry shares their diversity data and policies with the OMWIs [Offices of Minority and Women Inclusion], Congress, and the public,” according to the letter.
Apparently, the inquiry was prompted in part by data presented by the Government Accountability Office (GAO) in February at hearing of the subcommittee on diversity and inclusion. Essentially, the data showed that the financial services industry had “failed to significantly improve diversity in its management ranks.”
In particular, the GAO cited that “from 2007 to 2015, the overall representation of women among managers at financial services firms remained generally unchanged, while the overall representation of minorities among managers marginally increased, except for African-Americans whose representation decreased from 6.5 percent to 6.3 percent,” according to the committee.
Ultimately, Waters and Beatty want financial institutions “to prioritize diversity … By expanding the data request to all bank holding companies with over $50 billion in assets, the committee will be able to provide the American public with a complete picture of how large banks are meeting their commitments to diversity and inclusion.”
Specifically, the committee is asking for the following information about each institution’s policies from 2015 to the present, particularly demographics on:
- The total number of full- and part-time employees;
- Career level of employees (executive and manager versus employees in other roles);
- Gender, race and ethnic identity of your employees, as otherwise known or provided voluntarily;
- Employee compensation by gender, race and ethnicity;
- Number and dollar value invested with minority- and women-owned vendors and asset managers as compared to all vendor and asset manager investments;
- Title(s) and reporting structure for each institution’s lead diversity officer(s);
- Number of staff and budget dedicated to diversity initiatives;
- And a description of performance measures and compensation tied to diversity initiatives.
The committee also wants company-wide diversity policies and practices such as recruitment strategies; outreach to diverse organizations, such as historically black colleges and universities and professional organizations; gender pay equity data; and efforts to close any identified gaps.
In addition, the committee wants corporate board demographic data such as the total number of board members; the gender, race and ethnic identity of board members, as otherwise known or provided voluntarily; the board position title, as well as any leadership and subcommittee assignments; the institution’s diversity policies and practices; and any challenges the institution faces in implementing its diversity goals and initiatives.
Some of the major firms with investment banking arms that have been sent the letter are: American Express Co.; Bank of America Corp.; Bank of New York Mellon Corp.; Barclays US LLC; BMO Financial Corp.; BNP Paribas USA, Inc.; Citigroup Inc.; Credit Suisse Holdings, Inc.; The Goldman Sachs Group, Inc.; HSBC North America Holdings Inc.; JP Morgan Chase & Co.; Morgan Stanley; MUFG Americas Holdings Corp.; Northern Trust Corp.; RBC US Corp.; State Street Corp.; TD Group US Holdings LLC; UBS Americas Holding LLC; and Wells Fargo & Company.
The full announcement about the letter can be found here.
The report to come from this outreach should be an interesting read.