On July 12, the House Financial Services Subcommittee on Oversight and Investigations held a hearing on the Government Accountability Office’s (GAO) study of management-level diversity within the financial services industry. The study was conducted in response to a 2004 congressional request and used data collected by the Equal Employment Opportunity Commission from 1993 to 2004 to determine employment trends in the financial services industry.
In her opening statement, Chair Sue Kelly (R-NY) said that the study’s findings “show that intentions and results in diversity programs are no longer tracking each other,” and that “while there is no question that every company in the financial services industry is committed to providing opportunities,” the study “showed that the overall level of diversity within the industry has barely changed.”
Rep. Maxine Waters (D-CA) said, “We should be witnessing comprehensive proactive efforts across the board in this country’s financial services industry designed to increase the number of minorities and women in industry, as well as the promotion of persons of color and gender, particularly African Americans and Latinos. Indeed, the numbers tell us a different story.”
Orice M. Williams, director of the financial markets and community investment team at the GAO, testified that from 1993 to 2004, “overall diversity at the management level in the financial services industry did not change substantially” and that “representation by white women remained constant at slightly more than one-third during this period.” In 2004, white women held 37.4 percent of “official or manager” positions; minority women held 8.4 percent. Ms. Williams cautioned that these numbers “may actually overstate representation for minorities and white women in the most senior-level positions, such as chief executive officers of large investment firms or commercial banks, because the category that captures these positions ‘official or manager’ covers all management positions.”
Ms. Williams said that financial services firms “agreed that retaining minority and women employees represented one of the biggest challenges to promoting workforce diversity. One reason they cited is that the industry…lacks a critical mass of minority men and women, particularly in senior levels to serve as role models.” She also described efforts to recruit underrepresented populations, including developing scholarships and internships, wider recruitment and increased retention efforts, partnering with groups that represent minorities, creating performance indicators, and tying managers’ compensation to meeting diversity goals.
Also testifying were Marc E. Lackritz, Security Industry Association; Donna Sims Wilson, National Association of Securities Professionals; Carlos Loumiet, New American Alliance; and Manuel Fernandez, KPMG, LLP.
