Diversity on Wall Street

In the current issue of Bloomberg Magazine entitled the “Diversity Issue” the key overall question pleading for an answer from market pundits: Why have the finance industry’s diversity efforts failed?

The answers range from the boys-club mentality and network being still alive and well to recruitment policies. If this exclusive club of the boys’ network is still intact, it indeed points to recruiting policies geared toward hiring young people from a small, select group of schools, and exclusive personal networks. When people do not understand their own biases/perceptions in their interactions with each other, their biases seep into their dealings and comfort in forming connections, and that, in turn, can affect the atmosphere of a workplace.

Here’s and excerpt from the article by Wes Hall addressing the question of diversity. (Executive Director and Founder Kingsdale Advisors in Toronto):

Companies, for example, say, “I am going to put a diversity policy in place.”  And they put a woman in that position, and that’s great. But, I’m a Black man, and my civil rights were violated, and I’m coming to work in the morning. How would she understand my problem and what happened to me and the psychological trauma that I went through as a result of that experience as a Black man?  So, wouldn’t it be nice to have another person within that organization that shares the same role that I can now go to and talk to and can counsel me because I just experienced trauma?

                We have people who are putting things in place that don’t understand me. And they think they do by putting these systems in place. If we’re there, then when they are making policies we can say, “No, that doesn’t apply.”

Another approach to Diversity was tying compensation to initiatives. “Compensation drives behavior; behavior drives performance.” I would have to say that is especially true in the finance industry.

Another excerpt from Lauren Cochran (Managing Director Blue Haven Initiative in Washington):

The industry echo chamber focuses on the question. “Did we make more money than last year?” – confirming the system in a vicious cycle even as traditional banking businesses are less and less lucrative.  When bonuses become dependent on the question, “Are you making money and have you taken advantage of the skills that come with hiring a group of people that don’t all think alike and have different worldviews?” then things will change, and people will probably make more money. There’s a mountain of data to back that up.

I think Bhavini “Bev’ Shah (Founder and CEO City Hive Network in London) sums it up the best:

The solution lies in not picking one diverse group to focus on but investing in real solutions to help build a diverse industry where everyone can thrive regardless of race, gender, sexuality, or anything else.  Only then will we truly have the best talent.