Racial equity audits progress

Apparently, banks are doing enough to manage racial inequality and have told shareholders to vote down racial equity audit resolutions at their forthcoming AGMs.
While agreeing that Blacks Lives Matter and supporting demonstrations following the murder of unarmed black civilian George Floyd by a police officer last year, Citigroup, Wells Fargo, Bank of America, Goldman Sachs, JPMorgan do not agree that they need to demonstrate their commitment to equality in their own organisations.
The shareholder proposals – put forward by the Service Employees International Union and CtW Investment Group – call on banks to review their practices and policies and identify ways to ‘avoid adverse impacts on non-white stakeholders and communities of colour’. Yet curiously the banks say since they are throwing money at diversity and already give statements to shareholders detailing their policies in this area, they do not need to do anymore. PIRC is supporting the proposals.
The campaign is gathering steam. In a major breakthrough asset management behemoth BlackRock has chosen to not only embrace the policy but sees it as an opportunity to ‘provide useful feedback in assessing our progress and areas for future focus’.
It seems rather strange then for the banks to refuse to provide shareholders with more transparency if they really are committed to equality. If, like BlackRock, the refuseniks are so proud of their record on diversity and inclusion, then surely providing more evidence would be a doddle.
Or maybe it is because the number of these banks’ black employees remains stubbornly low. Just 13% of JPMorgan’s workforce is black; Citi has a target of 8% black employees by the end of this year, while Goldman Sachs aims to have a 7% black workforce by 2025. African Americans are the largest ethnic minority in the US and make up 13.4% of the population.
Financial institutions are making progress on diversity and inclusion but the banks’ latest opposition to providing shareholders with more transparency looks like a step backwards. Investors not only have every right to ask for such information it is in their interests to ensure companies pay more than lip services to this issue. Companies with a truly diverse workforce, particularly at board level, are more profitable and pioneering. PIRC will be supporting the resolution at the Bank of America AGM next week and we hope shareholders will keep pressing forward.

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