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Committee Finds More Work is Needed to Improve Diversity at Megabanks

Washington, DC, August 13, 2019

Following the March and April full Committee hearings to hold megabanks accountable, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, and Congresswoman Joyce Beatty (D-OH), Chairwoman of the House Financial Services Subcommittee on Diversity and Inclusion, sent requests to Bank of America Corporation, Bank of New York Mellon Corporation, Citigroup Inc., Goldman Sachs Group, Inc, JP Morgan Chase & Co., Morgan Stanley, State Street Corporation, and Wells Fargo & Company to obtain their diversity and inclusion data and policies from 2015 to the present.

The data requests were designed to inform Congress of the diversity levels, policies and practices of the country’s biggest banks.

This is part of a longstanding effort to hold financial institutions accountable and provide the American public with a complete picture of how large banks are meeting their commitments to diversity and inclusion.

See the Committee’s analysis of the data below.

Committee’s Findings
Boards of Directors

  • The U.S. population is over 50% women and 40% minorities, yet the boards of directors of the nation’s largest financial institutions are comprised of only 29% women and 17% minorities.

Senior Leadership
Senior leadership at the nation’s largest banks is still mostly white and male.

  • Not one megabank has a female or minority CEO at the helm.
  • There is no chief diversity officer currently reporting directly to the CEO of a megabank. 

Supplier Diversity

  • Only 4 out of 8 megabanks spent more than $1 billion on diverse suppliers in 2018.

$1.4 billion is the average spent on supplier diversity, but:

  • Less than 1% of megabank spending is devoted to diverse asset managers and suppliers.
  • Only 4% of externally managed assets go to diverse-owned firms.

Policies and Practices

  • Only 1 out of 25,000 employees on average is dedicated to diversity.
  • Diversity metrics are not tied to compensation and only half of megabanks tie it to performance.

Conclusions
Megabanks are making some progress in their diversity efforts but there is much more to do, including:

  • Increasing their focus on recruiting through affinity groups and minority colleges and universities;
  • Closing the pay equity gap for women and minorities; and
  • Increasing investment in leadership and development programs for building a pipeline of diverse talent.

 

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