“Let me begin by stating that as the CEO of JPMorgan, I am a passionate, proud, patriotic, socially aware, capitalist CEO,” Jamie Dimon, CEO of JPMorgan, stated with a chuckle at an event organized by the Female Quotient during the World Economic Forum. This forum took place last week.”Thank you for reading this post, don't forget to subscribe!
“I am not blind to anything,” he stressed.
Despite that, the bank, which has achieved its highest-ever yearly profit of $50 billion this week, and is nearing a market capitalization of $500 billion, is confronting “absurd ESG, DEI groups that are confronting us.” Nevertheless, it is not retreating from its diversity endeavors.” Dimon stated.
While acknowledging the Supreme Court’s annulment of affirmative action as a binding decree, saying, “They said, we’re going to salute, we’re going to follow the law,” the company found itself sidelined. There is a need to adjust its practices concerning racial and gender quotas to adhere to regulations.
Dimon mentioned that there would be minimal changes to DEI programs, emphasizing that some diversity initiatives are effective, while some are not. “The unique aspect of these initiatives is that some are effective, and some are not. Some companies merely put on a show.”
The approach of JPMorgan towards DEI mirrors that of any other aspect of business, necessitating that its leaders be zealous about details, facts, and analysis, Dimon underscored, emphasizing a point that has been reiterated in previous RaceAhead newsletters. “Your intentions may be right, but if you don’t carefully consider the implementation, you will fail.”
The CEO, who has helmed the world’s most valuable bank for 18 years, recalled an incident from his early days. He reminded the human resources department of JPMorgan that a few years ago, it was boasting about the company’s diversity progress, encompassing underrepresented groups like women, black, LGBTQ, and Muslim individuals. “Don’t group them together,” he objected. He insisted on the breakdown of the numbers provided by VPs, EDs [executive directors], MDs [managing directors], and recruitment and retention.”
They did. Women? Excellent. Hispanic? Excellent. LGBT? Excellent. Asian American? Excellent. Black? Average. Furthermore, the bank had been recruiting from historically black colleges and universities (HBCUs) for years. “I said, ‘That’s not JPMorgan. We don’t want to be average.’
This marked a pivotal moment for the company, which embarked on a concerted effort focusing on black employees, which became more essential after the departure of the two individuals he had recruited to the bank.
The first tipping point occurred when he was overlooked for promotion from ED to MD for the third time. The second was a managing director who was passed over for a promotion to middle markets – but was later reassigned.
Regarding the first instance, Dimon raised questions about why the ED was not promoted to MD and was informed that she did not have the necessary influence. “I said, ‘What does that even mean?’” As it turned out, it meant that the ED’s role was not significant—she did not have enough direct reports to justify a higher position. “I had never heard the term ‘influence’ used except when we were advocating for a black individual,” Dimon remarked. This sparked a change. He requested the company to track whether all approximately 500 EDs at the bank had influence and were on track for promotion according to their superiors and their superiors’ superiors.
However, Dimon clarified that he is not compelling managers to promote Black EDs. “I am not doing that. [Instead], are we transparent? Do we have open discussions about it? And if they lack the necessary influence, we have to inform them.” Presently, the bank monitors the method through which all employees are hired and who and how they are bringing new personnel into the company externally.
Dimon admitted that there has been a learning curve for him, disclosing that he had been recruited by Spelman, Howard, and Clark Atlanta University for roughly 35 years without realizing it. There are 107 HBCUs. The bank is currently recruiting from approximately 26 HBCUs.
“You learn, and you grow,” Dimon stated. “We’re hiring exceptional individuals from these institutions who are eager to work, are committed, seek employment, are industrious, and desire advancement. They will have an opportunity at JPMorgan, irrespective of their ethnicity.”
The Decline of the Big Four, Accounting firm PwC has revised its diversity targets in the US and removed the racial and ethnic minority criteria for certain student internship scholarships following pressure from opponents of DEI initiatives. foot
Unnoticed Changes. Despite the apprehensions around DEI, it appears that some companies have scaled back their initiatives, while others are intensifying them. However, many are adopting a less direct approach. NYT
Funding Reduction. There has been a yearly decrease in funding for Black entrepreneurs in the US since 2020, with only 0.48% of venture capital dollars ($661 million out of $136 billion) being allocated to this demographic last year. This marks a decline of less than 1% from two years ago. techcrunch
As lawsuits against DEI become increasingly prevalent, what role does the board play in safeguarding their company from legal challenges? writes, “From a purely practical standpoint, it may be wise to stay out of the political crosshairs.” LuckLila McClellan. Lawsuits consume time and resources and can jeopardize a company’s reputation.
However, Jennifer Kennedy Park, a partner at the law firm Cleary Gottlieb, makes a compelling point: “Now we’re concerned about a single lawsuit by a cisgender white individual… when there are likely 20 others that we’re not aware of.”
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