Here’s Why the Wells Fargo CEO Is Wrong About Black Talent

Wells Fargo employees got a rude awakening in a 90-minute Zoom call this summer in which CEO Charles Scharf claimed that the company’s failure to meet diversity goals is because of a lack of qualified minority talent. In a company-wide memo on June 18, he said: “While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from.”

Some employees called the meeting “constructive” and appreciated how “sincere” he was, while others were incensed — so much so that a handful of employees spoke out anonymously about the issue. Banks have not made enough progress in elevating Black employees to leadership roles, but to say it’s because of a lack of talent is a misleading distortion of the facts. 

Institutional bias in the financial industry 

Despite evidence that shows diverse and inclusive companies are more successful, the financial services leadership is mostly white. According to a Mckinsey & Company study, companies who add diversity to their leadership are 21% more likely to outperform in profitability than competitors. 

[ Read: The Best Banks in 2020 ]

But the reality is, Black and Latino employees make up less than 4% of the industry’s executive and senior-level positions. Executives may choose to point to the lack of qualified candidates as the main diversity barrier, but it’s more likely that bias and closed social networks are the main culprits.

In the U.S., in 2019 alone, 4.5 million Black students received a bachelor’s degree. 2.1 million earned their masters and 485,000 earned doctoral degrees. Meaning there is a significant pool of qualified Black candidates that could easily rise to executive positions. Surely many of them applied to Wells Fargo.  

The talent is there, the access and opportunities are not

“There is more than enough Black talent out there,” says Keith Corbett, Executive Vice President at the Center for Responsible Lending

“What is missing is access and opportunity. Comments like these reflect the institutional racism embedded at all levels of our society. We encourage all financial institutions to take real, concrete steps to diversify their staff from top to bottom and to support more future Black finance professionals going forward,” Corbett adds. 

[ Read: 19 Black-Owned Banks and How to Support Them ]

All of this is not to say there hasn’t been any progress made. Many organizations are promoting accessibility and networking for underrepresented groups through mentorships and internships, to avoid challenges in the hiring process. These organizations include: 

And companies like BlackRock, the world’s largest asset manager, have openly declared their purpose to hire more Black employees by 2024. Yet the rise to the top is nearly nonexistent for Black employees with enough experience under their sleeves — and qualifications to land executive roles. 

For the small number of Black executives, cultivating diversity is not easy. According to a Bloomberg News report, these leaders have witnessed their presence in the industry stall at 8% over the past 15 years. Although the push for diversity in leadership roles is crucial, looking at other sectors within the field can spark more conversations around hiring and retaining people of color.

For example, financial jobs that require direct work with clients are mostly white, according to data from the Bureau of Labor Statistics that focused on 551,000 personal finance advisers in 2019.

  • 82.2% were white
  • 8.6% were Asian
  • 6.9% were Black
  • 6.3% were Hispanic

In the same report, of 2 million accountants and auditors, 77% were white and 8.5% Black, while Black tax preparers only accounted for 16% of 97,000 registered in the country.

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Image Credit: Win McNamee/Getty Images

Taylor Leamey

Personal Finance Reporter

Taylor Leamey is a personal finance reporter at The Simple Dollar who covers banking, savings, mortgages, loans and credit cards. Her writing has also been featured at Reviews.com, Interest.com and ISP.com.