An Update on Diversity Programs

The Securities and Exchange Commission has published an analysis of diversity and inclusion programs at broker-dealers, investment advisers, and other financial firms, providing yet another reference point for other businesses about how you might structure your own D&I efforts and what regulators would like to see from them.

The report was released Monday by the SEC’s Office of Minority and Women Inclusion. It examined data supplied by 118 registrants on a voluntary basis, and measured those responses against five criteria for assessing D&I programs that have been defined by the SEC and other financial regulators. 

If this all sounds familiar, that’s because financial regulators are obligated to assess the diversity policies and practices of the businesses they oversee, per Section 342 of the Dodd-Frank Act. Financial regulators are supposed to publish these reports annually, although I’m not sure how diligently every regulator has followed that rule. The Consumer Financial Protection Bureau did publish its own D&I report in January

The SEC report offers some interesting findings, both heartening and not. Moreover, regardless of the specific numbers here, the five D&I standards and the more detailed principles under each one are excellent fodder for other businesses that might be wondering, “Are we implementing D&I efforts as well as we could be?”

The five standards are:

  • Organizational commitment to diversity and inclusion 
  • Implementing employment practices to promote workforce diversity and inclusion 
  • Considering supplier diversity in procurement and business practices
  • Practices to promote transparency of organizational diversity and inclusion
  • Evaluation of diversity policies and practices

Before we get to the specifics, we should also note that this was a voluntary survey of financial firms. We can’t assume that the 118 firms that shared their D&I information are representative of the whole. On the contrary, these 118 may well be doing more on diversity and inclusion than most firms, and they participated in the SEC report because they don’t mind sharing. 

Now let’s get to the details.

What Diversity & Inclusion Efforts Look Like

Among those 118 firms, the SEC flagged five notable findings:

  • 98 percent include diversity and inclusion considerations as part of strategic plans for recruiting, hiring, retaining, and promoting employees; 
  • 70 percent take steps to promote a diverse pool of candidates when selecting members of their board of directors;
  • 88 percent publish information about their diversity and inclusion efforts on their website; 
  • 62 percent include the progress they’ve made toward achieving diversity and inclusion in their workforce;
  • 55 percent maintain a list of qualified minority-owned and women-owned businesses that may compete for upcoming contracting opportunities.

The numbers above do point to a larger trend I saw in the SEC report, which I suspect is true for many businesses. Namely, lots of companies go through the motions of D&I programs, especially for steps that are easy to take — but considerably fewer follow through with real work to put D&I programs into practice on a daily basis. 

For example, look at that 98 percent from above who say they consider D&I issues in strategic planning. That’s great, but what does “include D&I considerations” actually mean? Because I don’t know a large corporation these days that doesn’t consider D&I as part of its manpower or customer outreach plans. 

On the other hand, only 62 percent of firms talk about the actual progress they’ve made toward achieving D&I goals. Thinking and talking are easy; actual work is hard, and showing your work is even harder. 


Another example of that trend came from the reports’s analysis of how companies promote transparency of their D&I efforts. The report included numerous, more specific ways of how a firm might do that, along with the results from the 118 respondents. The results are below.

Source: SEC

Again, notice the large number (88 percent) that publish something about their D&I efforts on the corporate website — but only 45 percent disclose how D&I issues fit into their strategic plan, and only 35 percent talk about how they promote diversity in their supply chain and procurement activities. 

I’m not necessarily faulting any of these firms; any bit of attention paid to diversity and inclusion is better than no attention paid. My point is simply that D&I programs are easy to think about, and easy to start. They’re much harder to push forward on a daily basis and embed into broad business operations. 

That’s probably the most important takeaway from this report for most compliance officers, HR directors, and other aficionados of corporate culture: that we still have a lot of work to do building the mechanics of D&I programs. The report itself has several more tables like the one above, and they offer some great specific examples of objectives your D&I program could achieve. 

Then comes the challenge of building the procedures to get those objectives done. 

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