Wells Fargo CEO blames shortage of Black talent for lack of diversity in the bank

The San Francisco-based bank, Wells Fargo has struggled to rebuild its reputation over the past few days after it blamed its lack of diversity on a shortage of Black talent.

The bank’s chief executive Charlie Scharf apologized Wednesday for the inappropriate statement made against Black employees and customers at the bank.

“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 said in a company memo in June. In addition, the two-months-old memo and similar statements made recently by Scharf during a Zoom meeting further buttressed the point, according to Reuters.

The statement has since sparked mixed reactions from the public and has put the bank’s reputation at stake, especially in such a time when racial disparities and systemic racism are being strongly fought against. This controversy also comes at a time when Wells Fargo is struggling to restore its reputation after a series of customer abuse and scandals, including opening millions of fake accounts customers didn’t request for.

Rep. Alexandria Ocasio-Cortez (D- N.Y.) says “perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit Black workers”, in a tweet.

“I know many highly talented Black lawyers who would have advised you against making such a statement,” said Sherrilyn Ifill, president of the NAACP Legal Defense and Educational Fund.

Scharf’s Wednesday apology in a memo stated that the CEO acted out of a personal “unconscious bias” and did not represent the overall interest of the company.

“There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise,” Scharf said in the memo. “It’s clear to me that, across the industry, we have not done enough to improve diversity, especially at senior leadership levels. And there is no question Wells Fargo has to make meaningful progress to increase diverse representation.”

In 2018, Wells Fargo had a Black representation of only 4.1% in its senior team, compared to the 8% of 2015.

While Wells Fargo CEO may be under fire for his inappropriate statement, this would not be the first time U.S. business leaders would blame lack of diversity on the shortage of Black talent. This is common among some recruitment managers and diversity experts as insufficient.

As the protest against Wells Fargo continues, the bank said a committee of senior executives has been set up and were meeting daily to find solutions and recommendations to address social inequalities against Black employees and customers.

“As a white man, as much as I can try to understand what others are feeling, I know I cannot really appreciate and understand what people of color experience and the impacts of discriminatory behavior others must live with,” Scharf said to employees.

Wells Fargo has a history of making discriminatory statements against people of color and women. This is also commonly found on Wall Street which has a historical record of being hostile to people of color and women.

In 2012, Wells Fargo paid more than $175 million to settle allegations from the Justice Department that it manipulated Black and Latino borrowers to take expensive loans and charged them with expensive fees. Although, the bank never admitted to doing any wrong but said it only wanted to avoid prolonged litigation.

Just last month, Wells Fargo settled another case related to its hiring practices. The bank agreed to pay $7.8 million in settlement of allegations made by the Labor Department that it discriminated against over 34,000 Black applicants and 300 female applicants.