Wells Fargo CEO Works to Repair Damage from His Comments About Lack of Black Talent

Wells Fargo CEO Charlie Scharf has apologized after offensive and inaccurate comments he made about diverse talent pipelines on a Zoom call this summer were made public.

Reuters broke the news on Sept. 22 after uncovering details of the Zoom meeting in which Scharf lamented a lack of Black talent at the company. “While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from,” Scharf reiterated in a follow-up memo which Reuters also gained access to.

On Sept. 23, Scharf expressed regret, saying, “I apologize for making an insensitive comment reflecting my own unconscious bias. There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise.”

In his statement, Scharf harkened back to companywide comments he made in June 2020 following the death of George Floyd and protests against systemic racism. He has pledged to double the number of Black leaders within the company over the next five years and also announced a plan to tie executive compensation to reaching diversity goals.

“As I said in June, I have committed that this time must be different,” Scharf said in his apology.

After Reuters broke the story of Scharf’s initial comments, the CEO faced widespread criticism.

“As a DiversityInc Top 50 Company, Wells Fargo participates in a rigorous survey submission process where they are required to provide detailed data and information on their organization that focuses on 6 key areas including: Human Capital Metrics, Leadership Accountability, Talent Programs, Workplace Practices, Supplier Diversity and Philanthropy. Wells Fargo’s Top 50 application shows that they have historically done better than most companies in recruiting Black talent,” DiversityInc CEO Carolynn Johnson said.

Johnson said that based on the Top 50 survey data, Wells Fargo has been historically strong at recruiting Black talent — which makes Scharf’s comments more unfounded.

Wells Fargo has ranked on the DiversityInc Top 50 companies for Diversity list since 2001. The 2020 DiversityInc Top 50 and Hall of Fame have an average of 35.6% of people of color in senior management, while the national average according to the Equal Employment Opportunity Commission is 31.1%. The 2020 Top 50 and Hall of Fame board seats are 30.6% filled by people of color, while for the 2018 Fortune 500, that number drops to 22.5%.

“Perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit Black workers,” U.S. Democratic Representative Alexandria Ocasio-Cortez tweeted.

Wells Fargo has earned the No. 11 spot on DiversityInc’s 2020 Top 50 Companies for Diversity. DiversityInc’s survey focuses mainly on numbers of historically underrepresented groups within various levels of the companies, as well as programs and procedures in place to support them.

The controversy surrounding Scharf’s statement is just the latest in a long line of scandals showing that corporate commitment to diversity and inclusion is crucial and needs to exist at all levels within an organization’s leadership team. In a recent DiversityInc Best Practices webinar focusing on reducing bias in the workplace, Wells Fargo’s Vice President of Diversity, Inclusion, Talent Development & Organization Effectiveness, Peter Kouzmov spoke about the importance of leadership buy-in on diversity and inclusion programs.

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“We make sure that the diversity and inclusion and monitoring for bias is the responsibility of the entire company all the way up to the top,” he said during the Sept. 9 webinar. Whether Wells Fargo actually has that support from Scharf is unclear based on his comments.

“People leaders must ensure there are clear goals and strategies that require recruiters, both internal and external, to source and present diverse candidate slates for hires at all levels in the organization. In addition, there should also be accountability measures in place that require hiring managers to take ownership as well and play an important role in filling key roles,” Johnson said.

The idea that enough talent does not exist within Black, Indigenous, Latinx and other communities of color is not only based in racist and colonialist ideas about people of color being inferior, but it is also inaccurate. It’s well-known that diverse teams outperform their non-diverse counterparts; a 2017 McKinsey study asserts that diverse teams outperform non-diverse competitors by more than 30%.

“There is Black skilled, educated, ready-right-now talent for critical, revenue-generating, high visibility roles in various industries. The erroneous thought of a ‘limited pool of Black talent to recruit from’ exasperates several inequalities,” Johnson said.

The truth about diversity recruiting is that if a company claims it cannot find diverse talent, it simply is not looking hard enough or reaching out to the right places.

“I’m sure a lack of talent is an concern for corporations and large employers, I would want to know what are they doing about it?” Johnson said. “Is their philanthropy aligned with their talent needs? Is the corporation communicating effectively and has positioned themselves as a worthy corporate citizen to the people they want to recruit. It’s not effective to say you “want” somebody, the critical question is do they want you?


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