What DE&I Means to Me

Last March, I partnered with members of 美国道富银行 ’s Black Professional Group and Black Leadership Cohort to assist us with a business challenge. Namely, to discuss issues around the recruiting and hiring, and professional development and retention of Black talent, particularly at the firm’s most senior levels. During our half-day session, the feedback was candid and detailed, humbling and revelatory, raw and poignant. I spent most of the half-day session listening and learning so I could identify opportunities to drive change and deliver meaningful results—to turn our intentions into action. Earlier this month I hosted this group again, along with Malia Lazu , CEO and founder of the Lazu Group , to discuss our progress and the work that’s still ahead.

What does DE&I mean to me? Diversity, equity, and inclusion—or DE&I—is not a new topic to me or State Street, but over the last couple of years has become a growing concern and focus of activity across board rooms and hallways in corporate America and beyond. As State Street President and Head of Investment Services, I wanted to take a moment to share some thoughts about why I consider this work so important.

?To skeptics out there who might be thinking: “Why is a middle-aged white guy talking to me about social injustice and systemic racism?” I take up the challenge.

Diversity is a business imperative—full stop. If you don’t take my word for it, a wealth of empirical data demonstrates that diverse organizations out-perform. For example, a Harvard Business School study found that women brought to business boardrooms a different set of perspectives, experiences, and viewpoints than their male counterparts. Similarly, a McKinsey study found that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile. And, related to ethnic and cultural diversity, McKinsey found top quartile companies outperformed those in the fourth quartile by 36 percent in profitability.

Engaging head-on with DE&I issues helps us better understand and reflect our clients, stakeholders, and the communities in which we operate. Diversity is critical for innovation. It challenges groupthink, and ensures we have perspectives that produce more equitable solutions. As I discussed in my last column , State Street is an organization of firsts: without diversity, maintaining that ethos is not sustainable. By making DE&I a strategic pillar we send a powerful message that we are a welcoming organization and an industry employer of choice. After all, how can any institution contribute constructively to society if it does not first reflect the people of society? And, how might any individual succeed if he, she, or they feel uncomfortable with bringing their best and most authentic self to work without our first building an inclusive culture?

Diversity isn’t just a dialogue we’re having within State Street, it is part of the conversation we are having daily with clients, who ask us for our diversity data and DE&I initiatives as a key factor in their decision-making processes. We care about these issues not only because it’s the morally right thing to do, but because diversity is good for business.

I am extraordinarily proud of the work State Street has done these last several years to help drive diversity, equity, and inclusivity forward. When it comes to DE&I, we are not just talking the talk, but walking the walk, with initiatives and successes that include:

• The launch of our 10 Actions to Address Racism and Inequality , a strategic action plan to address systemic racism, to which the firm holds itself accountable through measurable progress.
• Related to our 10 Actions, I co-chair efforts for Action #1, “Improve Black and Latinx Employee Representation.” This action focuses on increasing our Black and Latinx leadership and staff, and extending the requirement to interview a diverse slate of candidates to positions at all levels.
• I am proud to say that as of June 2022, more than 41,500 employees worldwide completed unconscious bias and inclusive leadership training. We also made unconscious bias training a requirement for all new employees.
• Extending DE&I efforts to our entire ecosystem, which is essential in terms of addressing large societal issues at their root: For example, our supplier diversity program, which encourages our direct suppliers to procure from diverse businesses, increased total of direct supplier diversity spend by 43% year-over-year. In addition, our Global Treasury established underwriting relationships with nine minority-owned firms, issuing $3.15 billion of bonds YTD that were approximately 50% underwritten by Black -, Latinx -, women -, and veteran-owned firms.
• State Street’s Foundation commitment to Early College programs , an initiative that allows primarily low-income high school students of color to complement their studies with tailored college-level coursework that is offered at no cost to the student.
• State Street Foundation incorporated racial equity as a priority in our corporate philanthropic arm’s grantmaking criteria.
• And we launched our external Civil Rights Audit on our business practices, with results publication planned for early 2023, at which time we will implement the audit’s recommendations.

All of this represents real progress, but none of it marks an endpoint. DE&I work requires cultural buy-in, time, relentless persistence, and momentum. Real, sustainable change requires a multi-year approach, our best and most creative thinking, and our most compassionate and empathetic listening. It means inviting colleagues and stakeholders on a journey we recognize will not be an easy one, while believing and embracing that we are at turning point in our workplaces, our culture, and our history.

?As President of State Street, what does DE&I mean to me? Companies, particularly those with enormous resources, capital and influence have the opportunity to take up this worthy and necessary cause. It is a responsibility to exercise leadership on these issues, and to help drive true change—beginning by setting a positive example in one’s own workplace.?