Wednesday, July 14, 2010

BE's View: The Best 40 in Diversity

In its July, 2010, issue, Black Enterprise magazine once again announces its 40 best companies for diversity. Granted, the list reflects its view, based on its criteria, and likely based on contacts it has with companies and the information it has retrieved from them. One magazine's perspective. (See

However, as in years before, BE strives to take an objective approach. It presents a list based on four primary criteria. It doesn't rank the 40, but highlights the companies that present diversity-related strengths on four fronts: employees, senior management, board of directors, and supplier diversity.

The list in 2010 hardly changed from last year. That's expected, because firms not on the list would have to take big steps in diversity initiatives to bump off companies on the list, many of whom are mainstays and have diversity programs that are working.

Financial institutions on the list, too, reflect minor changes, but some big names are conspicuously missing. That's not surprising, given the rocky road many firms endured the past two years. As we know, many financial institutions had to focus on other matters or financial institutions on the list have stepped up aggressively in the past year or so to maintain their reputations for diversity.

Eleven financial institutions made the list last year; 10 are included this year. Citigroup, long time regarded for setting a diversity standard, didn't make the list in 2010 and was pushed off by non-financial institution.

Companies that have historically been Consortium sponsors, as we'd expect, make the list regularly--including financial institutions American Express and Bank of America. Other financial institutions on the list include many insurance companies (Aflac, Aetna, TIAA-Cref, and State Farm) and some regional banks (Comerica and Northern Trust).

It certainly helps that American Express, TIAA-Cref, and Aetna have had blacks in CEO positions or in other top roles. And Ron Williams, African-American CEO of Aetna, is on the board of American Express, which is headed by African-American CEO Kenneth Chenault. TIAA-Cref's CEO is Roger Ferguson, also an African-American.

Although they have had to battle through the mortgage crisis and manage public opinion about their roles in it, Fannie Mae and Freddie Mac seem to have remain focused on diversity, despite all. They made the list again in 2010, partly because of minorities in senior roles (in management and on the board of directors).

For financial institutions in general, this year's list is notable for who didn't make it. The big investment and corporate banks--beyond BoA--didn't make the cut: Goldman Sachs, JPMorganChase, Wells Fargo, and Morgan Stanley.

The reasons might differ as much as the cultures and identities of these firms differ. Some might have made progress, just not enough to warrant a spot on the list (or not yet enough to get BE's attention). Others might have been so focused on other crises issues (raising capital, addressing TARP issues, or lobbying for or against financial reform) that they may not have done enough to keep up with the top 40. (BE notes many companies don't bother to return the surveys it sends out to get information it uses for the list. If a company doesn't return the survey, it isn't eligible to appear on the list.)

In the end, BE's is one of many such lists or surveys. Another magazine or website's list will likely have overlaps with the BE 40 or may use an entirely different set of criteria. All financial institutions, however, ought to know that if the lists are fair and informative, talented MBA's in finance will pay attention to them if they see them and use them as a factor in decided to accept an offer.

Tracy Williams

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