Diversity, equity and inclusion is all over the news. One of the first moves by the Trump administration was to dismantle DEI initiatives throughout government. In a perverse twist on “me too,” many high-profile corporations, including a number of large banks, also scaled back their DEI programs.
For Bank On Women, a nonprofit founded in 2019 to develop and promote female leaders in community banking — and increase the number of qualified women who serve on boards — this pushback on DEI might seem a reckoning.
Not necessarily, says Jenn Docherty, chair and co-founder of Bank On Women. “I hate the fact that people are now concerned about even having a conversation about the differences in recruiting and retention practices,” Docherty says.
When people hear DEI, they think “quotas,” Docherty explained, which is inconsistent with the ideal of hiring or promoting on merit. “Ultimately, I think this will allow us to have a more tangible conversation about what’s important to banks, including: ‘Who’s in my market? How am I going to capture my market? What services and products do they need? Who’s in my leadership? Am I getting the best risk management? Am I thinking about novel ideas because I have different people sitting at the table because I recognized the value of differing expertise?’”
For community banks that have traditionally looked at board composition as a way to source loans and deposits, these lines of inquiry reflect the increasing complexity of the business. “The needs of a bank board require technological, regulatory and financial expertise,” Docherty says.
Diversification addresses group think. “If everybody on the board has been together for a long time, it can lead to really isolated thinking as opposed to more novel thinking. “Banks are drawn to diverse leadership teams [and boards] because it serves the business of banking,” Docherty says. “It’s what it takes to be successful.”
The interconnectedness of the modern economy has also complicated governance for community banks, says Virginia Varela, head of community banking at SoFi, who serves Bank On Women as a director. (Docherty, general counsel at Performance Trust, and Varela were featured on a recent episode of the ABA Banking Journal Podcast.)
“You’ve got cybersecurity and data privacy concerns,” Varela says. “You have issues like, ‘What will the AI world look like to a community banker today? What’s your strategy around crypto?’”
Diversifying executive leadership at community banks is also about responding to the changing demographics of one’s community where the numbers, courtesy of S&P Global, tell a distinct story:
- Women start businesses at a rate of two to one over men.
- Women are sole, primary or equal earners in 45 percent of households.
- Women make 80 percent of their household’s buying decisions, yet …
- 73 percent of women report being dissatisfied with their bank’s products and services.
- By 2030, it’s projected that $30 trillion in assets will be controlled by women.
“We hear a lot of discussion about DEI being inconsistent with finding the best person for the job,” Docherty says. “The reality is, we historically haven’t been recruiting the best person for a job. We’ve been recruiting from the pool of somebody we know.”
Since its inception, Bank On Women has doubled its database of qualified bank directors each year, and has in the last three years contributed candidates to 30 companies. (Visit BankOnWomen.org to learn more.)
Last year, Bank On Women partnered with the American Bankers Association to create two peer groups, one for general counsels and one for female CEOs. It hosts other networking initiatives to help female bankers build their networks and resources. All of this activity takes money for the donation-based nonprofit.
“Ultimately, if we can help connect the dots so that more senior women in banking can provide mentorship and sponsorship to younger women, that would be a wonderful thing, and help solve that pipeline problem,” Docherty says.