Advancing Racial Justice For Frontline Bank Workers
Opening the next chapter of its Better Banks Accountability Project, the Committee for Better Banks’ new racial justice scorecard and report finds Black, Latino workers face particularly tough odds of getting higher paid positions at leading U.S. banks. Building on the success of CBB’s Covid Relief Bank Scorecard, this analysis captures the scale and depth of the diversity, equity and inclusion crisis in the U.S. banking industry. As bank executives wrestle with racial bias and discrimination within their own ranks, the findings indicate that while Black and Latino employees are concentrated at lower levels of employment, they have a substantially lesser chance of holding executive or other higher levels of employment compared to their white counterparts.
The racial justice scorecard grades thirteen leading retail banks in three areas: (1) Data Disclosure: The strength of disclosure related to workforce demographics, (2) Representation: The level of diverse representation within job classifications, and (3) Advancement: Measurements of disparities in advancement and promotion opportunities for Black, Latino, and Asian employees compared to white counterparts.
The banking sector needs robust disclosure to advance racial equity and economic justice. Seven out of the 13 banks failed to disclose sufficient employment demographic information to measure and grade their likelihood of providing advancement opportunities for Black, Latino and Asian employees. Two banks - Bank of the West (BNP Paribas) and Santander - refused to disclose any employment demographic data.
Racial bias runs deep: combating bias and providing diverse opportunities requires expansive policies. Odds of holding executive positions at the six banks that disclosed full data were as low as 8% for Black employees, 12% for Latino employees, compared to white employees. Black and Latino employees are much more likely to be in an entry level position than their white colleagues. For example, the odds of a Black employee being in an entry-level position were as high as 650% higher compared to their white colleagues.
Overview of recommendations:
Bank regulators and policy makers should require banks to disclose detailed data to hold banks accountable for their efforts to become more diverse and inclusive.
Implement enhanced Rooney Rule and disclose progress on advancement initiatives.
Widen talent pipeline and increase training opportunities for diverse employees.
Tie executive pay to diversity metrics — with transparent enforcement.