What’s holding back Black advancement to leadership roles?
In June, Wells Fargo’s CEO Charlie Scharf set ambitious goals to expand Black leadership and tie executive pay to diversity goals. However, his claims that a minority talent shortage was impeding diversity progress eventually led to a backlash, an apology and broad introspection.
“While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from,” Mr. Scharf wrote in a memo reported at the time by Reuters and Bloomberg.
The uproar arrived on Sept. 22 after a Reuters report indicated Wells Fargo employees were “exacerbated” by the comments that he repeated in a Zoom call over the summer. The next day, Mr. Scharf apologized “for making an insensitive comment,” which he said reflected his own unconscious bias.
Critics feel a perceived lack of qualified candidates is a common excuse for diversity shortfalls and for failing to nurture an internal talent pipeline. While 22 percent of Black Americans have a bachelor’s degree or higher versus 37 percent of whites, just three percent of executive or senior-level roles across America’s top 500 companies are Black.
Articles exploring the barriers to Black advancement identified a few hurdles:
- Non-P&L roles: People of color are often steered toward marketing or human resources rather than roles with profit-generating responsibility, such as heading a division, that are often the path to C-suite level positions;
- Insular networks: Professional and social networks tend to facilitate mentoring white men and referring other white men;
- Focus on diverse hires: Diverse recruitment is often emphasized, while retention and advancement gets overlooked.
Mr. Scharf received some praise for being transparent about the challenges. Many hope the heightened discussions over race this year play a large role in supporting career advancement for minorities.
“We want to have realistic expectations. And we want to keep everyone engaged,” said General Motors’ CEO Mary Barra about her company’s inclusivity challenges at Fortune’s virtual Most Powerful Women Summit. “Part of this is being vulnerable, and sharing that, you know, we don’t have all the answers.”
On Wednesday, Starbucks became the latest company to elevate its diversity goals by mandating anti-bias training for executives and committing to tying compensation to increasing minority representation in its workforce.
- Exclusive: HSBC aims to double number of senior Black staff by 2025 – memo – Reuters
- Exclusive: Wells Fargo CEO ruffles feathers with comments about diverse talent – Reuters
- CEO Charlie Scharf Reinforces Commitment to Diversity and Inclusion – Wells Fargo
- Wells Fargo Ties Senior Executive Pay to Improving Diversity – Bloomberg
- Wells Fargo chief executive Charlie Scharf testifies before a House Financial Services – NBC News
- When You Say There’s a Limited Pool of Black Talent, Here’s What You’re Revealing About Yourself – Entrepreneur
- Why Are There Still So Few Black CEOs? – The Wall Street Journal
- Want diversity? Move beyond your closed network – American Banker
- Voices: Don’t blame the pipeline for your white male workforce blaming-the-pipeline-for-a-white-male-workforce – Financial Planning
- Was Wells Fargo’s CEO wrong about the pipeline of Black talent? – Quartz
- Starbucks announces new commitments to advance racial and social equity – Starbucks
DISCUSSION QUESTIONS: What glass ceiling challenges must Black employees deal with that may be different from those facing women or other minorities? What solutions do you see?