A Better Path to Boosting Diversity in Financial Services
DEIDiversityFinancial ServicesFinanceDiversity, Equity, and Inclusion Advisory
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September 09, 2021
DEIDiversityFinancial ServicesFinanceDiversity, Equity, and Inclusion Advisory
Executive Summary
Getting to the C-suite is tougher for women and underrepresented minorities throughout financial services than for their white and male counterparts?
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Excerpt from the article originally published by Hunt Scanlon Media

The Hunt Scanlon Media article, "A Better Path to Boosting Diversity in Financial Services," was based on the Russell Reynolds Associates paper, "Opening Eyes and Efforts to Diverse Recruiting in Financial Services." The article is excerpted below.

In many ways, the racial awakenings of 2020 opened the eyes of banking executives and their boards to a reality that diverse employees have known and experienced for decades: Getting to the C-suite is tougher for women and underrepresented minorities throughout financial services than for their white and male counterparts, according the report by Russell Reynolds Associates’ Robert Voth, Fawad Bajwa and Art Hopkins. The authors say that a recent search for a chief risk officer at a Fortune 100 diversified financial services company is a prime example. 

“Extensive research identified hundreds of potential executives within risk, compliance and ancillary roles who potentially met the minimal technical competences and experiences defined as necessary by U.S. regulatory bodies, human resources and the risk committee of the board,” the report said. Of this target environment, more than 25 percent identified as female or non-white male. When all research was assessed and layered over the minimum career skills, technical qualifications and experiences required by the client and regulators, the number dropped to 10 percent. 

The solution is not to lower qualifications, according to Russell Reynolds Associates. “Even if the regulators relaxed their qualifications to consider executives from companies one-eighth the size, or for a line of business credit risk executive to be promoted three steps at once, the chances of failure for that executive, the financial institution and their customers, would be substantial,” the firm said. 

This is not atypical. Data from the Women in the Workplace study shows the rapid drop-off of non-white males at every point of career progression in American companies. White men represent just 36 percent of entry-level employees, but 68 percent of C-level executives. Men of color (who drop from 16 percent to 10 percent) and white women (31 percent to 19 percent) lose out as their careers move forward – but neither so badly as women of color, who represent 17 percent of entry-level employees, but only three percent of C-level leaders. 

“Virtually every major employer throughout banking has targeted minority candidates in the recruiting process, hired diversity, equity and inclusion professionals to try and improve inclusion and belonging in the workplace, and had senior executives make public commitments to the value of a diverse workforce,” the Russell Reynolds report said. “Despite these efforts, the challenges facing women and professionals of color on the way to the C-suite continues to be significant enough to get them to switch banks or drop out of the workforce all together. Companies throughout financial services have solutions to diversity and inclusion in their hands, yet fail to successfully train, retain and accelerate the development and retention of diverse executives who sit in their very ranks.” 

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