New benchmarks for racial and ethnic representation from NCRC and Beneficial State Foundation set goals and metrics for banks to evaluate their performance
Banks are past due to make good on their racial and gender equity and inclusion commitments.
A new report, from the National Community Reinvestment Coalition (NCRC) and Beneficial State Foundation, introduced a Racial and Ethnic Representation and Investment (RERI) framework for banks to set goals, measure progress and evaluate performance of managers and executives. It emphasizes accountability through transparent reporting and goal-setting that banks must do on behalf of their public depositors. The report was commissioned by Beneficial State Foundation, a nonprofit and owner of a community development bank, whose mission is to change the banking system for good. NCRC and Beneficial State Foundation have a shared goal to restore fairness and equity to the US banking system.
“Banks can and must do better at hiring, promoting and retaining African Americans and Latinos at the mid and executive level positions,” said Dedrick Asante-Muhammad, NCRC’s Chief of Race, Wealth and Community. “As well-resourced and well-established institutions, banks have no excuse for having such low levels of representation of African Americans and Latinos in leadership. As the NAACP Opportunity and Diversity Scorecard Report Card on the Consumer Banking Industry points out, the banking industry has failed to increase its representation of Blacks and Latinos in higher management positions despite increases in higher education attainment. Banks need to hold themselves accountable to strengthen Black and Latino representation, and our report gives them metrics and best practices to help them with their efforts.”
NCRC’s RERI framework includes a four-tiered grading system for banks to analyze their internal diversity progress. The framework also includes a review of hiring, recruitment, retention, sponsorship programs and other best practices to improve racial and ethnic representation across all job levels, while also strengthening the bank’s commitment to diversity, equity and inclusion.
“This research and the RERI framework are extremely helpful to Beneficial State Foundation to help us inform our Equitable Bank Standards in development, as well as to our partner bank, Beneficial State Bank, to think about its pathway toward our shared vision of a racially- and gender-just society,” said Erin Kilmer Neel, Beneficial State Foundation’s Executive Director and Chief Impact Officer.
The report, which analyzed 2018 data from the Equal Employment Opportunity Commission (EEOC) on racial and ethnic diversity across different job levels, found that at the executive/senior level, compared to the overall population:
- 3% were Black (13.4% overall)
- 4% were Latino (18.3% overall)
- 6% were Asian (6% overall)
- 30% were women (50.8% overall)
The release of the analysis and RERI benchmarks also closely followed a Reuters report about remarks in a company-wide memo from Wells Fargo & Co <WFC.N> Chief Executive Charles Scharf about the alleged difficulty of recruiting Black employees.
View the full report and RERI:
For more about how to use RERI in your bank, contact:
Beneficial State Foundation