Broker-Dealers Must Measure and Reward Diversity Goals
The broker-dealer industry must step up its level of commitment to diversity and inclusion by having goals measured and rewarded, insist panelists at Sifma's annual meeting, held in Washington, D.C. last week.
Jeffrey Brown, CEO of financial services firm Ally Financial, said the diversity and inclusion focus at his firm is “new and fresh,” starting when he became CEO three-and-a-half years ago. He said he wanted diversity and inclusion to become part of the company’s culture and believes it's important to “set the tone from the top.”
Now Brown believes his company has “moved beyond diversity” goals and is working on inclusion. For example, he said six of the 18 “top executive leaders” at Ally Financial are women and one-third of all employees have participated in employee resource groups, which are voluntary, employee-led groups fostering a diverse and inclusive corporate environment.
Stephen Steinour, chairman, president and CEO of Huntington Bancshares, said diversity and inclusion have had “several iterations” at the bank holding company. “Our tagline was ‘Welcome to All’ … but in 2011 we realized we weren’t welcome to all,” Steinour said, without elaborating.
Since then, the company has established diversity and inclusion goals, and worked toward achieving them. Diversity and inclusion are even included in the company’s Code of Conduct, Steinour said.
There’s a page devoted to diversity and inclusion in the About Us section of the company’s website, which lists the recognition the company has received for its efforts since 2015. Among its latest endorsements is being part of the “Forbes Best Employers for Diversity” inaugural list in 2018.
The Forbes list is a ranking of 250 employers across all industries in the U.S., based on surveying thousands of employees and examining employer diversity policies, as well as diversity in executive suites and on boards.
Huntington Bancshares says it increased diversity in its upper management to 42% in 2017 from 40.8% in 2016. The company says it has achieved a diversity rate of 67.5% across its entire workforce.
The company says it has extended its diversity and inclusion goals to its choice of suppliers. The company says its diversity spending rose to 16.9% in 2017, exceeding the 11% industry average. A supplier diversity program encourages the use of suppliers owned by minorities, women, veterans, LGBT individuals, service-disabled individuals, and veterans, among others.
Huntington Bancshares says it has further committed to inclusion by ensuring gender-neutral bathrooms in all its major employment centers. In 2017, the company received the Leading Disability Employer Seal and earned a perfect score of 100% on the 2017 Disability Equality Index. In the same year, it was recognized by the Human Rights Campaign Foundation as one of the Best Places to Work for LGBTQ Equality.
Meanwhile, at PwC, which provides support services to the brokerage industry, chief diversity and inclusion officer Mike Dillon reports directly to chairman and senior partner Tim Ryan, according to Neil Dhar, head of financial services and a partner at PwC. Ryan is considered a champion for the cause, especially after he encouraged others to take what is commonly referred to as the CEO Pledge to commit to diversity and inclusion in the workplace in 2017.
Dhar believes the financial services industry – which “lags” other industries in diversity and inclusion in a “meaningful way” – needs to do much more to support and advance diversity and inclusion goals.
Huntington Bancshares’ Steinour said some of the lagging can be traced to “legacy” issues, such as having top executives who haven’t fully embraced diversity and inclusion goals.
Steinour recalled that at the very first pride parade he attended, he “was not comfortable for the first 2.5 miles,” but then eased into it and now fully supports it.
Vanessa Cooksey, senior vice president for community relations at Wells Fargo, said people often forget that diversity and inclusion can also be profitable.
Citing an example, PwC’s Dhar said diverse teams tend to produce “more well-rounded points of view” that can help in the planning and execution of business strategies.
The jury is out, however, on whether the brokerage industry believes it’s a good idea to legislate diversity and inclusion. Stating his “personal opinion,” Ally Financial’s Brown believes it’s not a good idea, reacting to a question about California becoming the first state to require its publicly-held companies to include women on their boards.
The bill was signed into law by California Governor Jerry Brown last month. The law applies to companies with main offices in California, which are now required to have at least one woman on their boards by the end of 2019 and to have two or three women on their boards by 2021, depending on the size of the company.
Ally Financial’s Brown believes diversity and inclusion initiatives should originate from companies and be “spearheaded” by their top executives.
Diversity and inclusion “should not have to be mandated by the government or politics,” he said.