Racial and Ethnic Representation
and Investment FrameworkÂ
A Research Report and Recommendations
for Beneficial State FoundationÂ
— OVERVIEW
Key steps to improve a bank’s racial and ethnic demographics within their internal workforce, and methods to improve a commitment to diversity, equity and inclusion.
— Key Takeaways
Although African Americans comprise over 13% of the national population, and Latinos 18%, executive banking positions are only 3% Black and 4% Latino.
Black and Latino bank workers are concentrated in entry-level, low wage and semi-skilled positions instead of management or executive positions, which are not sufficient wealth generating opportunities of employment.
The financial industry must take on a stronger, more explicit commitment to Racial and Ethnic Representation and Investment (RERI). This framework outlines multiple ways to strengthen this commitment to RERI.
The framework includes best and promising practices for banks to improve Racial and Ethnic Representation within the internal workforce:
- Recognize racial and ethnic economic inequality as a social issue banks are committed to addressing.
- Collect and publicize racial and ethnic demographic data which includes a gender analysis, demographics of new hires and turnover, and supplier diversity metrics.
- Create and publish racial and ethnic representation goals.
- Evaluate managers’ and executive leaders based on an assessment of their efforts and dedication to advancing racial and ethnic representation, as well as their efforts to strengthen Racial and Ethnic Representation and Investment standards and practices.
It also includes best and promising practices to strengthen Racial and Ethnic Representation and Investment within the hiring process:
- Implement a strong Rooney Rule.
- Participate in job fairs, recruiting events, conferences and other events where the participants are majority-minority.
- Offer paid mentorship and intern programs specifically to racial and ethnic populations that are under-represented in the bank.
- Sponsor financial clubs, student organizations and civic organizations that are majority-minority.
- Partner with and sponsor minority-led policy institutes, community coalitions and nonprofits in their work to address racial economic inequality.
- Advocate for larger change within the financial industry geared towards better serving LMI communities and communities of color.Â
NCRC developed the Racial and Ethnic Representation and Investment (RERI) framework, which outlines benchmarks for racial and ethnic representation in all job levels of the banking industry. Based on Equal Employment Opportunity Commission (EEOC) national industry averages, our RERI framework includes a four-tiered grading system for banks to analyze their internal diversity progress across all job levels.Â
This RERI framework was developed with the support of Beneficial State Foundation. Recommended standards are separate, but in tandem, to internal standards created by Beneficial State Foundation.
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