04.01.22
The Impact of Diversity in the Workplace and Beyond
by: Derek Penn, Author of "Diary of a Black Man on Wall Street;" and Tonia Bottoms, BNY Mellon | Pershing
Diversity has a tremendous impact in the workplace, but it also has a tremendous impact in the industry as a whole. Creating an environment that allows your employees to be seen and heard is the key to efficiency, productivity and success.
In this interview with Derek Penn, author of "Diary of a Black Man on Wall Street", consultant and independent board trustee, and Tonia Bottoms, managing director and senior managing counsel at BNY Mellon | Pershing, they discuss the importance of diversity and what it can do for the workplace, the industry and beyond.
Derek’s Answers
1a. Since the start of your careers, what kinds of changes have you seen in terms of diversity in the industry?
I don’t have the empirical data to support the following, but I’ll bet I’m not too far off. I think the industry has done a very good job with gender diversity in the last 10-15 years. My first 10 years on Wall Street, women were a rarity, certainly in sales and trading. In other areas like investment banking, M & A and financial services in general, I think it was slightly better than the rough and tumble world of sales and trading, which was my vantage point, but the numbers overall in the industry in the 80’s and 90’s were poor.
However, the last 10-15 years women have populated these areas very well. I don’t have the data on where, but where I think I’m spot on is, racial diversity is worse now than it was when I started 34 years ago—certainly from a percentage standpoint. I would bet dollars to donuts that, percentage-wise, the people of color community on the Street is smaller than it was 35 years ago. I remember when municipal banking and associated sales and trading positions—where a number of people of color got their feet wet on the Street—were eliminated as the muni-banking business imploded. That implosion probably wiped out a whole generation of black and brown people.
These days, people of color—and everyone else for that matter—have a lot more job options, and Wall Street doesn’t hold the nearly singular attraction it had in the 80’s and 90’s. Nonetheless, I believe that racial diversity took a back seat, over my 34-year career, to gender diversity. One would have hoped that these two important diversity efforts, gender and race, would have been able to be executed in parallel, but I believe people of color were sacrificed and shoved to the back burner when the gender box was promoted, uplifted and filled. I’ll add that many more women need to be in senior management, but I have seen that happening in the last few years. Unfortunately, I don’t see a similar ascension in the ranks for people of color. Nevertheless, I’m hopeful that this industry is waking up.
1b. What do you see as the biggest opportunity for change?
It’s not that hard in my view. It wasn’t hard for the women-hiring spigot to be turned on. The effort needs to be intentional, just like it was for getting more women into the industry. If firms really want to get a hiring manager’s attention, tie their diversity effort to their compensation. That will wake up a lot of people asleep at the diversity wheel. Money talks, and it talks loudly in this industry.
2. What can leaders in this industry do to create a more inclusive environment?
Like I mentioned above, tie diversity to compensation and watch the numbers pile up. I should also say that I believe most executives at the top of the firm believe in diversity and understand the power and benefits of a diverse employee base. However, from my experience, as the diversity effort funnels down the organization to middle management, it loses much of its power and commitment. I also think there needs to be some education as to why diversity is important and how the lack of it negatively affects the company in so many ways. Whether it’s simple public relations, lack of diverse thought and creativity to problem solving, attractiveness by diverse talent, clients that believe in diversity embracing your firm or not, profitability because your firm tackled a client’s problem that required a different strategy because someone from a different ethnic and/or cultural background came up with an out-of-the-box solution, there are several benefits to having diversity in your company.
3. What advice do you have for young newcomers who have their own racial struggles in this industry?
First, realize that there is always life after the firm you work at. Just because things aren’t going well at this firm, you may be valuable elsewhere. Secondly, learn as much as you can, regardless of how you are treated. Learn the skills that will allow you to pick up and go elsewhere. Third, don’t accept outward, blatant racism (e.g., name calling, blatant slights, etc.) Let the offender know that this doesn’t fly in your camp. It may be hard to do this as a youngster or a rookie, but I’ve learned that if you give an inch to a racist, they will take a mile. Stop it in its tracks, even if that requires a trip to human resources. Keep your eye on the prize. That prize may exist at another firm, but don’t let a racist determine your future. Most of the racism will be subtle. Just learn your craft as much as you can and bounce when you have another opportunity. Their loss.
4. What has been the triumph you have been most proud of in your life—personally or professionally.
Personally, I am most proud of providing my children with outstanding educations. Education is the great equalizer, to some degree. There are other components to being equal where people of color are lacking, but I’d start with education as a pillar.
Professionally, I’m proud of two things. The first achievement is my unblemished regulatory record over my 34-year career. I could have cut some corners or done things to maximize revenue, but I always stayed true to my personal morals and ethics. Secondly, I am supremely proud of all the people of color, as well as the people of the majority that I have hired, mentored and nurtured to this day. I feel I’ve done my part of reaching back and bringing others along and giving them hope and guidance. That will continue to be one of my efforts until they turn the lights out.
Tonia’s Answers
1. Since the start of your careers, what kinds of changes have you seen in terms of diversity in the industry? What do you see as the biggest opportunity for change?
I’m encouraged by the concerted efforts in the industry. I’m seeing both grassroots-driven change and real support at leadership levels that recognizes the culture and employee base that is more reflective of the world we live in. I used to be the only one that looked like me in the room. That’s starting to change. And while we’re making progress, in order to be a truly inclusive industry, we need to focus on attracting and retaining talent of different backgrounds. That means that middle management and those that are hiring for open positions need to be intentional and held accountable. There’s also a great opportunity to prime the talent pipeline by engaging with students, teachers, administrators and communities to promote opportunities available in the industry and to educate young people about what careers are available, how many broad and transferrable skills are needed in financial services and so on. There are many careers in the industry. You don’t have to be a finance major to have a fruitful career in financial services.
2. What can leaders in this industry do to create a more inclusive environment?
Consider who has a seat at the table. Do those in the room all look like you? Is there an opportunity to invite someone new to a meeting, a task force or project? Ask for and truly listen to their input. Pose the challenging and difficult questions. Be open to understanding other’s experiences and recognize that none of us have all the answers and everyone’s experiences and points of view are important. Be open to meeting everyone where they are in their journey. Provide education, mentoring and other opportunities for more junior, diverse talent. Every step we take makes a difference, and we can all contribute to ensuring inclusivity.
3. What advice do you have for young newcomers who have their own racial struggles in this industry?
Don’t let someone else’s treatment of you define you. Your contributions, perspective and experience are critical. In order to become more inclusive and improve representation in the industry and across the board, this industry needs you and your ideas. When there’s more representation, things really change. You have great opportunity for success and a fruitful career in financial services and your voice matters. Never tolerate or accept poor treatment. Find an ally or a sponsor to help navigate the waters and to address concerns. Make connections. Use your voice in ways that help create a culture where everyone belongs and influences and shapes the industry and impacts peers. Have the courage to lead and to demonstrate that there is strength in diversity.
4. What has been the triumph you have been most proud of in your life – personally or professionally?
By far my proudest achievement in raising a daughter that is smart, kind, empathetic and a leader. I am doing my best to ensure an equitable world for her and others in her generation and generations to come. They are the future.
Derek Penn and Tonia Bottoms held a keynote session at the 2022 BISA Annual Convention. Thank you to all who were able to attend and participate!