Progress toward Increasing Diversity Stalls
Contact: Bruce Mirken, Greenlining Institute Media Relations Director, 415-846-7758 (cell)
OAKLAND, CALIFORNIA – The boards of directors of California’s leading banks still lack diversity, with women and people of color seriously underrepresented, a new analysis released today by The Greenlining Institute finds. Banks had been making slow progress in improving diversity over the years, but now that progress appears to have stalled.
“In a state that’s 64% people of color, and projected to be 70% by 2040, the leadership of our most important financial institutions should reflect that diversity – and right now it doesn’t,” said report co-author De’Zhon Grace. “This isn’t an academic question. Our recent analysis of mortgage data found Black, Latino and Native American borrowers still lagging behind. More diverse bank leadership could push these institutions to work more cooperatively with California’s diverse population communities.”
Greenlining examined the racial and gender makeup of the boards of the top 15 banks in California, as measured by deposit size. Key findings include:
- On average, 22% of board members in 2020 were people of color, a decline from 30% in 2019.
- Only two of 15 banks had more than one third people of color on their boards.
- On average women comprised 29% of board members, unchanged from 2019.
- Women of color were severely underrepresented, averaging just nine percent of board members. One fifth of banks studied had no women of color on their boards.
The business world is increasingly recognizing the need for diverse boards. This week NASDAQ announced a new board diversity requirement for listed stocks.
Greenlining’s report urges greater transparency and increased attention to diversity from financial regulators. “Banks, nonbank lenders and fintech companies should be required to disclose data on their boards and staff, broken down by race and ethnicity, as well as what they have done to increase diversity,” said Rawan Elhalaby, the report’s other co-author. “This problem won’t solve itself. It requires focused effort and a push from regulators.”
To learn more about The Greenlining Institute, visit www.greenlining.org.