NEW YORK – Wells Fargo’s chief executive apologised today over remarks that blamed the bank’s mostly-white operating leadership on a lack of available black talent as the embattled lender sought to quell a public uproar.
Charles Scharf, who was installed about a year ago as CEO to turn around the bank following a fake accounts scandal, told employees he was sorry following news reports spotlighting his statements in June in the wake of US racial justice protests.
“I apologise for making an insensitive comment reflecting my own unconscious bias,” Scharf said in a statement.
“There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise.”
But the comments – which were not publicly aired until this week – touched a nerve with politicians and other commentators, some of whom alluded to earlier lending discrimination settlements and other scandals.
“The CEO of #WellsFargo says there’s no diversity because there’s a very limited pool of black talent to draw from! However, there’s an unlimited pool of black people to steal from!” said comedian DL Hughley on Twitter.
An ‘unfortunate reality’?
In the June 16 staff memo that sparked the controversy, Scharf pledged to fortify efforts to make the bank’s leadership more diverse, writing “This time it must be different.”
The statement came as leaders throughout Corporate America were coming forward to condemn systemic racism in policing and pledge steps to diversify their companies and support black-owned suppliers.
But Scharf also alluded to “unique” challenges as the bank tries to turn itself around and return to the good graces of regulators.
The Federal Reserve in 2018 imposed an asset cap on the bank following the fake accounts settlement and other scandals, an unprecedented penalty.
Pointing to this dynamic, Scharf said it was “imperative” to find staff for its operating committee who had dealt with similar issues elsewhere.
“While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from with this specific experience as our industry does not have enough diversity in most senior roles,” Scharf wrote in the memo.
The formulation was roundly mocked on social media.
“The unfortunate reality is that Wells Fargo paid $175 million to settle claims that it systematically discriminated against Black and Latino home buyers,” said the Public Citizen non-profit group on Twitter.
“Perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit black workers,” tweeted Representative Alexandria Ocasio-Cortez, a New York Democrat.
“There’s plenty of Black talent,” said Ohio Democratic Senator Sherrod Brown. “They just don’t have the talent for fraud and abuse you’re looking for.”
Committing to change
Scharf said he was committed to addressing the problem, pointing to the recent appointment of black executives to prominent roles and unveiling a new anti-racism training programme and measures to emphasise diversity and inclusion in hiring.
“I’ve worked in the financial services industry for many years, and it’s clear to me that, across the industry, we have not done enough to improve diversity, especially at senior leadership levels.”
Large American companies have again been under scrutiny over lack of diversity at the senior levels amid this year’s racial justice protests.
Earlier this month, Citigroup became the first large bank to name a woman to lead a major Wall Street bank.
Shares of Wells Fargo fell 3.5% to US$22.83. – AFP, September 24, 2020
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