Banks making slow progress on diversity issues

Former Credit Suisse boss Tidjane Thiam apparently never felt at home in Switzerland. After losing a power struggle with Chairman Urs Rohner, he left the bank in February. © Keystone / Walter Bieri

A recent story from the New York Times implied that the resignation of Ivory Coast-born Tidjane Thiam at the helm of Credit Suisse earlier this year had racist undertones, and he was the only Black CEO among the world’s biggest banks. How does the banking world – especially Credit Suisse – address the issue of diversity among its ranks?

In their annual reports, most of the big banks point out the importance of diversity and of promoting minorities. (The reports define diversity as the equal treatment of employees regarding gender, ethnicity, sexual orientation, age, religion and so on).

But real change can be slow, according to Anina Cristina Hille, who researches corporate diversity at the Lucerne University of Applied Sciences. Despite commitments from Swiss employers, especially the big banks, Hille says action on diversity issues also requires buy-in from society as a whole and the political sphere.

Thiam’s controversial departure

In February, 2020, Tidjane Thiam stepped down as CEO of Credit Suisse bank in the wake of a damaging spying scandal. Almost exactly eight months later it made the headlines again. In a detailed articleExternal link, the New York Times asked whether racism played a part in Thiam’s resignation.

The US newspaper gave no clear answers but reading between the lines it left little doubt that Thiam’s skin color played a role. For example, the article refers to performances at Credit Suisse chairman Urs Rohner’s birthday party, which Thiam had apparently perceived as racist. The bank apologized for the incidentExternal link.

Focus on gender

The banks (and other business sectors) have so far focused heavily on the issue of gender equality. “When people talk about diversity today, most of them think of gender,” says Hille. “Probably because gender has been a big political issue in recent years and because it affects half of the population.”

It’s no wonder then that most progress on diversity has been recorded in this area. A study by the consulting firm Oliver WymanExternal link at the end of last year concluded that thanks to hard work and commitment, banks’ efforts regarding gender equality had finally yielded tangible results. Some 20% of executive board members in the financial services industry today are women. However, the report also concluded that women are still clearly underrepresented in management considering that more than half of the entire banking staff is female.

Minorities overshadowed

The promotion of minorities is overshadowed by the gender issue. Some 92% of Swiss firms surveyed by the Lucerne University of Applied Sciences and Arts stated that their diversity management included the issue of gender. Just under half – 49% – had strategies to address ethnic diversity.

The difference is even more extreme when it comes to tangible measures. Of the surveyed companies, 54% stated that they have special networks and groups for the advancement of women. Only 9% have comparable structures for promoting ethnic minorities.

Credit Suisse’s efforts

What about Credit Suisse in particular? When it comes to gender diversity, it does well in a sector comparison: three out of 13 people on its supervisory board are women. This corresponds exactly to the industry average. The management team has more female representation than average, with 27% women in management overall and 22% women in senior roles. According to a survey by the Skema Business School, less than 17% of managers across the entire industry are women.

Hille regularly examines diversity issues at various Swiss companies by conducting an online survey. It asks firms around 50 questions regarding their organisational structure, diversity in management and staff composition in terms of age, gender, nationality, religion and health/disability. The resulting Diversity Index was last published in 2018, and Credit Suisse took the top spot, ahead of IKEA and the Paul Scherrer Institute.

The other major Swiss bank, UBS, last took part in the survey in 2014 and did not make it into the top 10. On that occasion, Credit Suisse was in fourth place.

Incentivising diversity

For Hille, Credit Suisse’s good performance comes as no surprise. She knows from experience that large international companies tend to be more aware of diversity issues. “Equality alone does not drive economic success,” she says. “But if you point out the advantages of diversity – for example, that it allows you to better utilise your workforce – then companies respond well.”

At the end of the day Swiss banks are not accountable to anyone when it comes to diversity. The situation is different in the United States, which is front and centre in the diversity debate and where the Black Lives Matter movement first sprang up. Large US companies are obliged to submit workforce diversity data to the authorities. There is no comparable instrument in Switzerland.

Last year, the Washington Post evaluated this data and came to the unequivocal conclusion: “Banks are struggling to increase the number of blacks in management positions.”

A report by the Financial Services Committee of the US House of Representatives comes to a similar conclusion: the big banks are still firmly in the hands of white men. There is still a lot to be done, it says.