Keeping the focus on diversity, equity and inclusion
Diversity, equity and inclusion in financial services is an issue that’s been around for more than four decades. While progress has been made over the years, diversity has yet to be achieved in terms of having a wider range of people at the table. Equity, from the standpoint of pay opportunities, has yet to be broadly achieved. And as for inclusion, it’s not enough to have people from underrepresented communities in an organization if these people don’t have meaningful roles and a growth path.
A renewed interest in DEI in financial services has emerged as part of the current focus on long-standing factors that reinforce injustice and inequality within our society. Individual banks have expressed solidarity with those seeking change, made some commitments to underserved areas and allocated some resources, but there needs to be an industrywide approach that elevates DEI to critical-issue status.
It falls on the C-suite – and more specifically, the bank CEOs – and the boards of directors to step up. It’s their job, as leaders overseeing of the corporate culture, to make clear the importance of DEI initiatives and to ensure the message cascades down through the organization.
And it’s not only just with a strategic plan. No one needs yet another comprehensive diversity report that becomes fodder for a series of general discussions and is eventually put on a shelf without action taken. What’s needed is a plan that forces banks to eliminate the issues causing the analysis paralysis that tends to impede progress.
I would advocate a plan that has built into it not only inclusion and structure, but also goals. It would include incentives for good behavior as measured in terms of progress toward those goals, and there would also be something that we hear less of in financial services – penalties for lack of good behavior. I think if corporations in financial services can put in place such a system of incentives and consequences, we’ll start to see progress relatively quickly.
As mentioned earlier, getting buy-in from the CEO and other senior executives is crucial. So how do you get them to truly become relentless advocates for change within their organizations?
One way is to position DEI as a core business issue that stands to increase in importance in coming years. For example, demographic trends point to a future U.S. workforce that is increasingly multicultural – recent reports by the Brookings Institution and the Pew Research Center found that 44 percent of millennials and just under half of Generation Z were minorities. Effective business leaders have to be attuned to such changes.
I think there also needs to be more education. We need to have real conversations about both explicit and unconscious bias because bias is something that exists for everyone. Disparate opportunity is also an issue for workers and for minority- and women-owned contractors as well. Many institutions fail to recognize this, which I think is a big problem in terms of the bias conversation and institutional responsibilities to their customers and communities.
People at the senior levels of financial institutions are going to have to lean in to the discomfort of having these discussions. Most organizations don’t really want to have a conversation around race, gender or other identities. But if they want to have an in-depth understanding of DEI, they have to invest some time listening to what employees see as their challenges and what they see as the impediments within the organization.
Part of what they will likely discover are employees with enormous potential that are hiding in plain sight. Those with a non-traditional background or those who have followed an unconventional career path are often underappreciated – a deeper dive to try to understand where these employees are from and what they have done can reveal valuable skills and abilities not discovered in a typical interview process.
As moderator for BAI’s new executive roundtable focusing on DEI issues, I am helping to facilitate these vital conversations. Together we are creating a set of tools, recommendations and best practices that can be shared across the industry to the benefit of all. In doing so, we are building a community of professionals to serve as mentors and resources for each other with the common cause of making the clear case for DEI’s contributions.
For 40-plus years, DEI has been talked about – now we’re seeing a heightened commitment to put more action behind the words.
Diane T. Ashley is CEO of DTA Diversity Counts and moderator of the BAI Executive Roundtable on diversity, equity and inclusion. She is a former chief diversity officer at the Federal Reserve Bank of New York.
Hear Diane T. Ashley discuss diversity, equity and inclusion on the BAI Banking Strategies podcast.
Get access to the BAI on-demand webinar “The state of diversity, equity and inclusion in financial services.”