Diversity in Finance: Attack of the Abstract Nouns
Looked at any big bank diversity websites lately? They are all heavy with abstract nouns, a sure sign of Bankspeak: inclusion, respect, tolerance, integration, empowerment, leadership, transparency, accountability. Call me a disciple of idealism, but many on Wall Street are still looking for more action words.
Despite all the diversity programs and initiatives and forums, the banking world looks pretty much the same to me as it has for the last couple of decades (in the memorable words of one diversity expert: Pale, Male and Stale).
There is still no female president, chairman or chief executive of a big Wall Street firm, although last year Sallie Krawcheck sundered one glass ceiling with her appointment to CFO at Citigroup as did Suzanne Nora Johnson as a Vice Chair(wo)man at Goldman Sachs. Zoe Cruz at Morgan Stanley perhaps comes closest to actively running a major house now that she's newly co-president. That's three, and I'm hard-pressed to name more.
The trouble is, there are managers out there who wouldn't bother with diversity if they weren't forced into it. Change isn't likely to come soon or fast, either. Diversity experts believe that it will take up to two generations before institutions can claim they are fully integrated and open to all at every level. Having top-down commitment to an effective diversity program is a good place to start but the numbers don't seem to show much in the way of improvement so far.
The Center for Work-Life Policy set up a private-sector task force in early 2004 to investigate 'The Hidden Brain Drain: Women and Minorities as Unrealized Assets.' Firms such as Ernst & Young, Lehman Brothers and Goldman Sachs are participating in an effort to stem the flow of good people leaving the Street, to find out how to attract them back, and to attract a more diverse crowd to try finance in the first place.
Goldman Sachs' Lance Lavergne, Vice President in Human Capital Management, Diversity Recruiting, says that diversity has become an increasingly important business consideration:
'There is greater awareness around issues of diversity, and a genuine effort among companies to try and address some of those issues. The value of diversity manifests itself in a variety of ways. When the goal of diversity efforts is to ensure that your people processes (performance evaluation, promotion, compensation, mentoring) are applied equitably, then the entire organization benefits.'
Those pesky abstract nouns keep creeping in, but Lavergne makes his case for spreading a diverse talent pool across sectors.
'Diversity also adds value from a talent perspective. An organization must first believe that no one group has a monopoly on talent, and that smart, capable people are evenly distributed across all demographic groups.'
So does Goldman Sachs think its diversity program is making a dent in changing corporate culture at the bank and beyond?
Lavergne says: 'We feel we are among the handful of firms that are making great strides in this arena. As you expand the scope to financial services broadly and business in general, we recognize that we still have work to do. We are constantly learning from those companies we admire and respect, and we are always looking to adopt best practices as we make every effort to try to become an employer of choice.'
Bankspeak is a hard habit to shake, but listening between the lines, I can tell Lavergne gets it. I just hope he's getting the buy-in from staff, and more importantly, upper management. Diversity may make good sense if it mirrors the marketplace in which firms operate, but if having a more diverse workforce means taking up managers' time away from the bottom line and adding to costs, you can see why some of the poor dears have to be dragged kicking and screaming into the modern world.
Difficulties arise in translating words into action. As Laura Zubulake's $29 million sex discrimination case win from UBS last week proves, words alone can be dangerous-and expensive. Prejudice is a sneaky rascal of a fellow, lurking in unexpected corners. How do you go about banishing xenophobia and racism, religious, gender and sexual stereotyping and, most of all, fear of change?
You don't, of course, but I'd start by banishing abstract nouns such as those above. Some day we may even see the word diversity banished from Bankspeak because it has become a non-issue. But not just yet.
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