Everything is “exceptional” and “extraordinary” at JPMorgan Chase, according to CEO Jamie Dimon’s annual letter to shareholders. But the firm has “simply not met the standards set for [itself]” on one initiative: hiring black talent.
That will hardly come as a surprise to an industry that’s resolutely lacking in diversity. According to the US Census Bureau, 79% of financial advisors are white, 8% are African American, 7% are Hispanic/Latino, and just 5.7% are Asian.
By some measures, JPMorgan’s diversity record is better than its peers. According to its website, among its professional US workforce, 20% is Asian and 8.7% is Hispanic/Latino. It’s also making progress on gender diversity. 40.5% of US employees are women. It promotes women to leadership positions too. Within global financial services, 30% of Dimon’s direct reports and 30% of its leadership are women.
But when it comes to African Americans among its ranks, JPMorgan barely tracks better than its peers. African Americans comprise 9.4% of employees, and just 3% of executive or senior-level managers.
For Dimon, this is unacceptable. He writes:
“While we think our effort to attract and retain black talent is as good as at most other companies, it simply is not good enough. Therefore, in 2016, we introduced a new ﬁrm-wide initiative called Advancing Black Leaders. This initiative is dedicated to helping us better attract and recruit external black talent while retaining and developing the talent within the company.”
Nearly every top US bank—Goldman Sachs, Bank of America, Morgan Stanley, Citi Group—promotes diversity initiatives. But Dimon’s explicit condemnation of this specific diversity challenge appears to be a first among top Wall Street execs. What’s more, by addressing insufficient African American talent in his coveted annual letter—deemed management gold by the likes of Warren Buffett—Dimon is assuming responsibility for the issue and its resolution.
“What’s most encouraging about Dimon’s statement,” says John Rice, Founder and CEO of Management Leadership for Tomorrow, a non-profit helping underrepresented minorities become corporate and entrepreneurial leaders, “is that it appears JPMorgan is focusing on a multi-faceted approach to African American diversity; he addresses recruitment, retention, and advancement. Not all organizations will publicly communicate the importance of all three levels, as historically Wall Street has prioritized recruitment over helping ethnically diverse employees advance.”
The real question, says Rice, is whether JPMorgan has the strategies in place to move the needle on all three issues; such strategies must include a clear, metrics-based definition of success, including benchmarks for how many African American employees JPMorgan hopes to employ at all organizational levels in the next three to five years, and promotion rates of African American analysts be relative to white analysts.
The jump from executive director to managing director is the toughest on Wall Street, and has been particularly troubling for black and Hispanic employees. To support minority employees’ success at this notorious choke point, JPMorgan is formalizing the developmental coaching white men have long-received informally, and doing so in more creative and aggressive ways than its competitors, says Rice. This focus is undeniably strategic as the trickle-down impact of having more ethnically diverse executives on minority advancement and retention is powerful.
Yet, in light of JPMorgan’s equally troubling percentages of Hispanic/Latino and Asian executives (4.1% and 6.5%, respectfully), Dimon’s explicit focus on black talent could raise concern. According to Rice, it shouldn’t.
“What’s important is that the CEO, the top executive, is talking about diversity issues within a particular segment of the employee population, African Americans, and saying that they are going to hold themselves accountable to moving the needle on this segment,” says Rice. “The strategies that prove successful, as relevant, will undoubtedly broaden to other ethnic minority employee populations.”
Valerie Rainford, JPMorgan’s ABL leader, reinforces this point: “When we see an opportunity where we want to do better, we’re bold enough to make the change,” she says. “Advancing Black Leaders is that kind of strategy, and we’re not stopping there. We’ll continually look at ways to help other communities within the company.”
Dimon’s commitment is set. Now he’s got to deliver.