The CEO of America’s biggest bank employer has angered staff after saying the bank has trouble reaching diversity goals because there is not enough qualified minority talent.
Wells Fargo Chief Executive Charles Scharf defended the company’s record on diversity in a Zoom call over the summer and shifted the blame to a lack of black talent in the industry, according to two employees who were on the call.
Scharf also made the claims in a company-wide memo on June 18 that announced the bank’s diversity initiatives.
His comments come as companies face mounting calls to improve the diversity of their organizational make-up amid nationwide protests demanding an end to systemic racism following the killings of multiple black men and women by cops across America.
The two staff members said attendees on the call were offended by Scharf’s comments and dismissed his claims of a lack of black talent.
‘I can get them 10 to 15 resumes today,’ one of the employees said.
Scharf spent more time listening than speaking during the 90-minute Zoom call which he initiated, they told Reuters on the condition of anonymity because they feared repercussions.
The memo, seen by Reuters, also reinforced the stance of the top boss.
‘While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from,’ Scharf said in the memo.
Black senior executives across corporate America hit back at Scharf’s comments saying the excuse is a major reason why companies have struggled to add enough racial and ethnic diversity to their leadership ranks.
‘There is an amazing amount of Black talent out there,’ said Ken Bacon, a former mortgage industry executive who is on the boards of Comcast Corp, Ally Financial Inc and Welltower Inc.
‘If people say they can’t find the talent, they either aren’t looking hard enough or don’t want to find it.’
Bacon said he was ‘shocked and puzzled’ by Scharf’s comments.
Lauren Holland, who chairs a word-of-mouth professional network called Wall Street Friends, said she has 8,000 members in minority communities, and sent out more job posts to them in the last two months than in the last five years.
‘I literally get emails every single day from people asking to be added to our list,’ she said.
‘The talent is there. It’s just a matter of the firm accessing it and connecting with it.’
Wells Fargo defended the CEO and pointed to the diversity efforts that have happened under his watch.
The bank has pledged to double the number of black leaders at the firm over five years and has tied executive compensation to reaching diversity goals.
Scharf is also requiring hiring managers to consider diverse candidates for high-paying roles that are vacant and ensure diversity on interview teams.
Wells Fargo’s latest proxy disclosed more diversity data than those of many other companies, with two of 12 directors black and one Latino or Hispanic.
Scharf ‘is committed to deep and systemic change to increase diversity and has held several forums where there has been candid conversation and unfiltered feedback,’ Wells Fargo spokeswoman Beth Richek said in a statement.
Scharf was not available for an interview, she said.
One attendee on the Zoom call said they weren’t offended by Scharf’s comments and praised their boss as ‘genuine and sincere’.
‘The meeting was incredibly constructive… I walked away being incredibly surprised at how genuine and sincere he is,’ said Alex David, president of the Black/African American Connection Team Member Network.
The lack of diversity and equal opportunities across corporate America has been put under the spotlight in recent months, in the wake of the Memorial Day ‘murder’ of unarmed black man George Floyd.
Stark data from executive recruiting firm Heidrick & Struggles reveals African-Americans made up just 10 percent of new director appointments in the Fortune 500 last year despite making up 13 percent of the US population.
New Hispanic directors were even more scarce, the study found.
Only 7.3 percent of the five highest-paid executives at financial companies in the Russell 3000 were racial or ethnic minorities, ISS ESG data shows.
That number has risen in recent years, yet remains far below the percentage of minority groups in the general US population.
Some black directors and executives said they were not happy with the lack of progress in improving diversity.
‘Unless I practically get on a soapbox about it and ask about it every meeting, it gets pushed out,’ said Mary Winston, director at companies including Chipotle, about some of her past work on boards.
‘It’s just not as robust a conversation as it should be, and no progress has been made.’
Winston, adding that she is often the only person of color in boardrooms, disagreed with the notion of a talent shortage.
Senior executives said the notion of a shallow minority talent pool is frequently cited as a hurdle to improving diversity but probably reflects insular professional and social networks.
Experts said one reason boardrooms and C-suites lack diversity is that such jobs are often filled by people who have managed businesses, while many people of color have tended to be stuck in roles that lack a direct connection to profits.
‘As women and minorities started to gain traction in corporate America, they were trapped in certain jobs companies felt comfortable placing them in, like human resources, administrative-support type functions,’ said Teri McClure, former general counsel and chief human resources officer at UPS, who now sits on several boards, including JetBlue Airways Corp.
McClure said she frequently hears comments like Scharf’s when companies have not tried hard enough to find diverse candidates or give them the experience to qualify for senior roles.
[via Daily Mail]