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Conservative Backlash Leads to DEI Retreat on Wall Street

DEI | March 4, 2024

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Wall Street Pulls Back on DEI Initiatives Due to Growing Conservative Backlash and Internal Pressures

Wall Street has begun to quietly pull back from its Diversity, Equity, and Inclusion (DEI) commitments, marking a corporate shift in America's approach to diversity. This retreat is attributed to a growing conservative backlash and internal pressures, leading to a reevaluation of DEI strategies across major financial institutions.

  • Goldman Sachs has notably opened its "Possibilities Summit" for Black college students to White students, reflecting a broader trend of inclusivity. Similarly, Bank of America and Bank of New York Mellon are rethinking their DEI-focused programs and diversity metrics, respectively, under legal advisories to avoid accusations of reverse discrimination.
  • The retreat is partly in response to legal challenges and the potential for lawsuits alleging reverse discrimination. This cautious approach follows the U.S. Supreme Court's rejection of affirmative action in colleges, fueling concerns over corporate diversity initiatives' legality. There's an undercurrent of resentment among some White employees, contributing to the reassessment of DEI efforts. This internal pushback is a quiet yet significant force influencing corporate decisions.

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  • Despite efforts to improve diversity, the representation of Black senior executives in major banks like Goldman Sachs (3.7%), JPMorgan Chase (5%), and Citigroup (8.7%) remains low compared to their overall U.S. population percentage (about 14%).
  • While public declarations remain supportive of DEI, internal adjustments suggest that companies are reworking recruitment programs and reviewing diversity targets to address the evolving legal and social landscape.

Why It Matters

This shift in Wall Street's DEI approach signals a broader reevaluation of corporate diversity strategies amidst changing legal interpretations and societal attitudes. The retreat from previously ambitious DEI commitments reflects the complex interplay between legal risks, internal dynamics, and external pressures.

See:  McKinsey Report: Diversity in Global Private Markets 2022 and Institutional Investors as Catalysts for Change

The future of workplace diversity and inclusion efforts remains uncertain.  There's a need for a balanced approach that addresses legal concerns while striving for genuine inclusivity.

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