Wells Fargo CEO Charles Scharf has apologized for suggesting earlier this Summer that there’s a lack of Black talent for financial services jobs after backlash from inside and outside the firm.

"Some of you may have seen media stories referencing a comment on diverse talent from my June 'Our commitment to change' memo," Scharf said in a new memo sent to employees on Wednesday and published on Wells Fargo's website.

“I apologize for making an insensitive comment reflecting my own unconscious bias. There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise. I’ve worked in the financial services industry for many years, and it’s clear to me that, across the industry, we have not done enough to improve diversity, especially at senior leadership levels. And there is no question Wells Fargo has to make meaningful progress to increase diverse representation. As I said in June, I have committed that this time must be different.”

The June memo and Summer Zoom meeting

In a June memo announcing how Wells Fargo would tie executives’ pay to how much they’re increasing diversity in their departments, Scharf said that the firm must double the number of Black executives, who at the time made up just 6% of senior management. Scharf also pledged to create a new position on diversity and inclusion, reporting directly to the CEO, as well as bring on more African Americans to the firm’s operation committee, Bloomberg reported at the time.

But Scharf’s comment in that memo on the availability of qualified Black candidates had drawn ire.

“The unfortunate reality is that there is a very limited pool of Black talent to recruit from with this specific experience as our industry does not have enough diversity in most senior roles,” Scharf wrote in the June 18 memo, according to Bloomberg.

Scharf then reiterated that Wells Fargo faced challenges in becoming more diverse because of a lack of qualified minority talent during a 90-minute Zoom meeting with employees this Summer, which exasperated some Black employees, two participants in the call who asked to remain anonymous told Reuters, which first reported the story on Tuesday.

Scharf’s comments about the lack of Black talent drew criticism from outside the firm as well, the newswire writes. Ken Bacon, a former mortgage industry executive on the boards of Comcast Corp, Ally Financial and Welltower, said he was “shocked and puzzled” by Scharf’s comments, according to Reuters. 

Others took to Twitter to slam Scharf.

“Perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit Black workers,” Rep. Alexandria Ocasio-Cortez, D-N.Y., wrote in a tweet.

What Wells Fargo is doing now

Scharf used the apology to employees as an opportunity to reiterate Wells Fargo’s diversity efforts.

He listed how Wells Fargo welcomed “new diverse senior leaders who have deeply impressive resumes.” These include members of the Operating Committee: Lester Owens, head of operations, and Ather Williams III, who joins in October as head of strategy, digital and innovation.

Wells Fargo is close to hiring a leader for a new diverse segments, representation and inclusion group, who will report to Scharf and be responsible for advancing the company’s diversity efforts in the marketplace and workplace, according to the new memo. And Scharf said Kristy Fercho recently joined the company to lead home lending, while Gigi Dixon has been promoted to head of external relations.

Other recent initiatives cited by Scharf include: A recently launched “returnship” program focused on diverse talent who have been out of the workforce for an extended period to support their return to the industry. And a requirement for diverse candidates for key roles with compensation of more than $100,000 and increasing business with diverse suppliers.

Other efforts underway, Scharf said in the new memo, include:

  • Reaching out to diverse talent: To help expand our outreach and sourcing opportunities with diverse talent, our University Programs team has been working closely with our Operating Committee leaders to help build engagement with historically Black colleges and universities, or HBCUs, and Hispanic-serving institutions, or HSIs.
  • Anti-racism training course: A new live anti-racism training course is being developed — we’ll share more information as details come together.
  • Senior leader accountability: Operating Committee leaders have been working with their Diversity & Inclusion consultants and HR business partners to integrate D&I into their business plans and reviews, and each Operating Committee member is an executive sponsor for at least one of our Team Member Networks.
  • Executive compensation: As part of the year-end evaluation process, Operating Committee members will be evaluated based upon their progress in improving diverse representation and inclusion in their area of responsibility. These evaluations will have a direct impact on year-end compensation decisions.

“Over the past several months, I have greatly enjoyed and benefited from many conversations with the Black/African American Connection and other Team Member Network affinity groups,” Scharf said in the new memo. “I am committed to continuing to listen and learn and appreciate all of your help in driving meaningful change at our company.”

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