The City of London Lost Its Way on the Path to Racial Equity

Black workers say the momentum for change has waned.

(Bloomberg) — In 2020, just after George Floyd’s murder in the US, one of the most senior Black professionals in the City of London, KPMG UK Partner and Vice-Chair Richard Iferenta,  appealed to CEOs and chairpeople of the business community “to stamp out racism of all forms.” Three years later, he has yet to see the change and ambition he asked for.

“Do I think we’re doing enough? No,” Iferenta, who chairs Business in the Community’s Race Equality Leadership Team, said. “We need much more radical change — we need much more radical inclusion.”

The months after Floyd’s murder bore witness to a tidal wave of apologies across the financial services industry and pledges — from increasing representation to improving career progression — as shockwaves and protests rippled across to the UK. 

KPMG was one of a number of companies to sign an open letter to corporate Britain saying “we have failed black people,” with promises such as introducing targets to recruit diverse talent more aggressively. Leading financial institutions from the Bank of England to Lloyd’s of London expressed regret for their historic ties to the transatlantic slave trade.

Iferenta said the period was one of the hardest of his life.  “I cried so many times,” he said. “It’s still painful and I think it’s a psychological trauma,” he said.

Today, leading Black professionals speak of a waning momentum, as attention is diverted elsewhere amid a series of crises, including the soaring cost of living. For its part, KPMG boosted the number of Black partners through the use of targets while an allyship program between senior leaders and Black heritage employees helped facilitate communication, Iferenta said. When it comes to recruiting more diverse talent, a “laser focus” that existed among C-suites and executive committees in 2020 has gone, he said.

An avalanche of reports and studies into racial inequality in 2020 revealed the scale of disparities in the finance industry. Those published over the following years give a mixed picture on progress, particularly for Black employees rising to the highest ranks of their professions in companies across different sectors. Although Black people make up 22% of the ethnic minority population in England and Wales, one report found that, as of the end of 2022, they only accounted for 13% of ethnic minority director positions in the FTSE 250.

A number of the City’s leading employers signed the Black Talent Charter when it was launched in 2020 aiming to boost Black representation. As of 2021, the latest dataset available, none of the FTSE 100 companies had a Black CEO, CFO or Chair.

Although many of the UK’s largest banks now voluntarily publish their ethnicity pay gaps — the government decided against making it mandatory — the latest figures reveal that Black employees face larger disparities in pay than for ethnic minorities overall, with the gap widening in several cases with Black employees largely working in more junior positions, rather than higher-paying roles.

Among the biggest banks that disclose the data, there is still sparse representation at the upper echelons of the companies. One study of ethnic minority employees in finance spoke to a lack of sensitivity around race in the profession, which can veer into discrimination.

One senior Black professional, with more than 30 years of experience in the finance industry, said momentum toward creating inclusive workplaces has not only slowed but that a backlash has emerged in some quarters, with questions emerging around the value of focusing so much on one demographic. A narrow window where minds were focused on the issue has closed without addressing the lack of Black people in senior levels and workers seeing meaningful progression in their careers, she said.

The professionals who spoke to Bloomberg suggested a range of solutions. Many pointed to the need for the C-suite to put its weight behind the issue, citing visible Black representation among senior leadership as of particular importance. Research last year by the Financial Conduct Authority looking at firms across a range of sectors showed that representation at senior levels is only marginally lower than at middle levels, shrinking the number of those potentially rising higher in the company. Other people said targets were needed to make representation at all seniorities a reality.

Despite the sluggish rate of progress overall, professionals were optimistic that the events of 2020 had at least increased awareness around the need to address racial disparities in the workplace.

“Three years ago, it was uncommon to see or hear explicit reference to the ‘Black’ community and there was a discomfort across sectors in talking about matters related to race and ethnicity,” said Chika Aghadiuno, who chairs the Institute and Faculty of Actuaries’ Diversity Action Group and sits on the advisory board of the Race Action Through Leadership initiative. “With this level of discomfort even in deploying relevant language, it is easy to see how ill-equipped organizations were to educate themselves and properly explore the issues, let alone take any actions.”

The FCA research said that there are a number of initiatives underway — but in many cases, DEI efforts largely failed to consider their long-term positive impact. “Only one firm had made a clear connection with diversity of thought or recognised the potential benefits that this could bring to its business,” the report said. 

Nevertheless, more companies have put racial equality on their agendas: around 85 organizations had signed Business in the Community’s Race at Work Charter when it launched in 2018, committing them to improving opportunities among their workforces. Today, that number has leapt to almost 1,000, said Sandra Kerr, the Race Equality Director at the BITC. “Is there progress? Yes, but not as fast as we would like,” she said.

Syreeta Brown, Chief People and Communications Officer for Virgin Money agrees. “I personally am not a big fan of initiatives. It’s not an initiative, it is a core part of whatever you’re doing in your business,” she said, which includes changing the company culture to ensure that Black recruits don’t enter companies, only to swiftly leave again. According to research from US think tank Coqual in 2022 (Bloomberg LP, the parent company of Bloomberg News, was one of the sponsors for the research), almost half of Black professionals intend to leave their jobs in the next two years, compared to around a third of White employees. 

“Contrary to the myth of scarce talent, I have a huge network of Black professionals, but a lot of them check out at a certain level of their career and decide, ‘you know what, I don’t actually need to work in this way,’” often preferring to go down an entrepreneurial route than remain as an employee, she said.

“If you’d asked me, would I have been in HR and certainly in financial services for as long as I have been when I started, I would have laughed,” she said. “But I thought, if I check out, then there’s going to be nobody left.” 

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