FDIC extending diversity and inclusion goals to financial institutions it oversees

The Federal Deposit Insurance Corporation wants its new diversity and inclusion plan to extend beyond the agency itself to the financial institutions it manages...

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The Federal Deposit Insurance Corporation wants its new diversity and inclusion plan to extend beyond the agency itself to the financial institutions it oversees. For details on the plan and how the agency will carry it out, Federal Drive with Tom Temin turned to the director of the FDIC, Office of Minority and Women Inclusion, Nikita Pearson.

Interview transcript:

Tom Temin: Miss Pearson, good to have you on.

Nikita Pearson: Hi, Tom, happy to be here.

Tom Temin: Tell us about this new plan. What does it encompass? And what are you trying to accomplish here at FDIC?

Nikita Pearson: So this new plan is something like we’ve never done before. And we’re really trying to do three things. One, we’re trying to promote diversity, equity, inclusion in our workforce. We’re also trying to make sure that we foster inclusive prosperity by including minority and women owned businesses and our business operations. And then lastly, we want to promote diversity, equity, inclusion within the banking system itself. And so what we’ve done in this plan is we’ve looked at a couple of things. We’ve, one, made diversity, equity, inclusion an organizational priority. In addition to that we’ve incorporated concepts of equity into our plan, something we haven’t done before. In addition to that, we’ve made sure that we provided opportunities for everyone within our workforce to be engaged in this effort. So it’s not just a bunch of words on the page, but it’s actually real action steps that everyone can be involved in.

Tom Temin: All right, and what are the measures of diversity and inclusion? How do you know you’re making progress?

Nikita Pearson: You know, it’s really a lot of different ways. You can look at quantitative and qualitative factors, right. But before I actually get into more of the measures, I would like to talk a little bit about like, why this is such a critical part of our mission. And I’ll give you a little bit of a personal story that FDIC recruited me from Savannah State University, which is a HBCU, historically black university in Georgia. And I clearly remember the recruiters coming to my accounting class. And they talked about the mission of the FDIC. And they talked about how the FDIC made sure banks operate safe and sound, that they comply with consumer protection laws, comply with anti-discrimination laws and community reinvestment laws. During the course of that conversation, like my mind flashback to watching my granny. I call her granny. She’s my great grandmother. And she used to carry all of her money in her pocket because she didn’t trust banks. And she grew up during the Great Depression. And then I had more hurtful memories that came to mind, like watching my mom get denied a loan application when I was sitting in a bank with her. And I just remember the way that the loan officer spoke to my mom and, and even as a child, I knew that was wrong. And so probably comes to no surprise to you that when FDIC offered me an opportunity to be a bank examiner, that I jumped at it to make a difference. And so really, what happened was, being a bank examiner allowed me to take my lived experience, and bring that perspective into rooms where decisions were being made. And what we’re trying to do is bring in more perspectives, so that we can have everyone feel included in a banking system. You know, Tom, we did a study about maybe a year or so ago. And we found that there are seven million households that are unbanked. That means there’s like seven million people who don’t have a banking relationship to deposit their checks to save for unexpected expenses. And then for the people who do have banking relationships, like a lot of folks from where I grew up, in Thompson, Georgia, it’s rural Georgia, they become increasingly frustrated, because they don’t see good financial options to support their hopes and dreams, like starting a business or home. And so we need a workforce that can help us close those gaps. And part of doing that is making sure that our workforce is diverse, because that helps us better understand the communities that we serve.

Tom Temin: The question then what is your measure of the diversity of the, again, the FDIC workforce primarily?

Nikita Pearson: That’s where I’m heading to, I want to lay the backdrop. And so now we looked at both data, and then we listen to our employees. So we look at the demographic data compared to the civilian labor force, basically, does our workforce look like the country? And so we do an analysis of that. And then we look at other data points. A common data point in federal government is the Federal Employee Viewpoint Survey and they have a measure that’s called the inclusion quotient. And the reason I like this is it tells us how employees feel when they come to work, do they feel like it’s an open and fair environment? So we have the demographic data that measures the same diversity, and lets us know whether or not our workforce looks like the country and then we have the unseen measures about how do employees feel? Those were the quantitative factors and then we had to look at more qualitative things to really capture the story that our data doesn’t tell us. And so one thing that we did last year is we had listening sessions because there are so many things that happened in 2020. And this provided employees an opportunity to not only talk about current events, but also to talk about our workplace diversity, equity and inclusion issues and help us better understand our similarities and differences. And then the other thing that we did is we engaged an independent consultant to conduct the barrier analysis. And the reason this is important, because part of that analysis included focus groups with different demographics and different groups within our workforce. And so that also helped us capture and better understand the story that our data wasn’t telling us. So that’s the way we’ve used data. And then we’ve listened to our employees and other stakeholders to really help us measure where we are in our workforce.

Tom Temin: We’re speaking with Nikita Pearson, she’s director of the office of minority and women inclusion at the FDIC. And the plan mentioned something about the culture of excellence. And tell us what you mean by that, and how you develop that metric.

Nikita Pearson: Yes, so you know, with a culture of excellence, have you ever heard the saying culture eats strategy for breakfast, Tom?

Tom Temin: I have, yeah, so I’ve probably been bitten by it a couple times too.

Nikita Pearson: Well, so have we the FDIC is no different. And so the one thing that we’ve determined is that if our culture isn’t strong, and you’ll notice that in our plan, that’s actually the very first aspect of our plan. If our culture isn’t strong, if we do not have a culture that strives for perfection, but settles for excellence, then we won’t be as effective as we can be. We want to make sure that our culture exemplifies teamwork, and that we embrace innovation, and that we value diversity, equity, inclusion, and that type of culture, every employee has equal opportunity to develop and excel in their career. And we actually value those contributions, and we reward our high performers.

Tom Temin: And I wanted to ask you about that word equity, because I hear that a lot. And it sounds like equity would result in as you put it a workforce that looks like America by meeting quota, as opposed to meeting the excellence goal with everyone having equality of the chance to achieve whatever rank and professional achievement they wish. So explain what equity means and why it’s different from equality.

Nikita Pearson: You know, that’s actually a very common perception about equity. And actually, I think about it this way, equal opportunity achieves a goal by treating everyone the same regardless of need. Equity, on the other hand, goes a step further and achieves its goals by treating people differently depending on need. So you and I, Tom are two different people. And we have two different needs to have equal opportunity. And I’ll give an example. So Tom, let’s say you and I work for a catering company. And we have a formal event that we are serving at and a part of our company provides us the uniform, and part of that uniform would be shoes. Would you agree with that?

Tom Temin: I like to wear shoes anytime I’m catering. Yes, I agree completely.

Nikita Pearson: Okay, so let’s say if the company decided to give you and I Tom, the exact same pair of shoes. They’re going to give us a size six, four inch stilettos. Now, Tom, I don’t know what size shoe you wear. And I don’t know how good you are and walking in stilettos. But if someone gave me a size six stiletto, I would be a very happy camper. And I’d be put in the best position to be the great server at this event. How would you do…

Tom Temin: I would be revealing one of my deepest, darkest secrets if I put those on. So now I’ll stick with the plain black flat.

Nikita Pearson: Right? So you and I need two different types of shoes, probably two different sizes, in order for us to have equal opportunity to be successful in that job assignment. And that’s really the difference when it comes to equality and equity. Does that make sense?

Tom Temin: It makes sense. But I’m going to just challenge you one little point there. Suppose you have two people from one is black, say one is white or one different races regardless, it doesn’t matter. And suppose they come from equally impoverished backgrounds. One comes say from an urban environment but is poor and didn’t have the right opportunities that they should have. Someone comes from a deeply impoverished rural area, equally comes without the same opportunities that we all should have. If they come together at FDIC or an agency like that, under equity, regardless of the race, they would get the same types of opportunities and the same types of shoes to fit their particular situation. Would that be also fair to say?

Nikita Pearson: Sort of. And so I would use myself as an example, I came from an impoverished rural area in Georgia. And I have friends who are from impoverished areas in New York. And so when we came to the FDIC, we had different needs. Although we were both the same race and both the same gender. To be competitive for me, part of it involved, I needed Toastmasters to help me prepare for speaking in board meetings and things of that nature. The other individual growing up in New York, that really wasn’t their challenge. Their challenge was that they needed more support as it relates to some of the technical skills. So even though we had similar backgrounds, and we were both same races, same genders, when it came to our work environment, we were still unique individuals that had different needs. And really, it’s really about providing variety of different resources to be able to support employees.

Tom Temin: Okay, good, interesting way to put it. I appreciate that. Let me ask you this. What happens next now? You’ve got this plan, it’s 14 pages, it’s some good degree of detail? Is this requiring work on the part of FDIC leadership line managers? Or does everybody kind of have to put their hands on the ore here and start pulling?

Nikita Pearson: Oh, it’s all hands on deck time, all hands on deck. One of the things that we’ve been trying to do, when we’ve made the plan actionable, we wanted every employee to be able to see the true steps and you know, not just be a bunch of words on the page, what’s corporate speak. The next thing for us to do is really communicate, making sure that people know, the office that I oversee is the Office of Minority and Women Inclusion, we want people to know it’s not, and we call it OMWE, it’s not an OMWE plan. This isn’t just a management plan. It’s an FDIC plan. And so we will be having a meeting with all FDIC employees, and talking through the plan to talk about where our successes have been, where we will focus for the year and how employees will have an opportunity to engage. We will then organize and have different assignments throughout the organization for everyone to support different aspects of the plan. We will have regular check-ins, and we will do an annual impact report so that we can measure our success as we go through it. So it’s not like a get the report out, get the plan out and put it on the shelf. It is everybody gets involved. Everybody can see where we are. Everyone plays a role in helping us progress. And we’re holding ourselves accountable for actually doing that. And we’re reporting on our success every year.

Tom Temin: And is there an employee training part on this because that was kind of controversial, let’s say at the end of the last administration, the nature and type of training that was given in this area. And now that policy, whatever it was, is done for the Trump administration policy. So what kind of training do you have in place for this?

Nikita Pearson: Our position on training is that we’re always looking to educate and not alienate. And so we have a very robust way that our training before it rolls out. We make sure that we are doing training that helps move the agency forward, and everybody needs training. And so some of the things that we’re looking at, we have empathy based training that applies to all employees. And, you know, I heard a coworker said, we’re going to teach people how to be nice to each other? And I said, something like that. In addition to that, we have training to support making sure that we put our managers in a position to be successful, so that we have training on how to implement our bonus system that we have for employees, we have training for our employee resource groups and other affinity groups that are going to support us with the plan, training about how to have an effective diversity programming. We also have training for managers and employees who might be engaged with hiring individuals with disabilities, that we have training on how to make sure that we are doing that effectively. And we also have like diverse interview panel guidance. So it’s a lot of different training opportunities that we’re providing out throughout the organization to help give everyone the tools that they need to be successful in implementing this plan.

Tom Temin: And in the couple of minutes we have left I just wanted to get back to the issue of the industry that the FDIC oversees the banking, the finance industry, the regulated entities, how can you encourage them to be more diverse and inclusive? I mean, FDIC’s statutory mission is to protect depositors. So how can you really get to the internals I guess, of that nature into the banks that you oversee?

Nikita Pearson: Right. You know, part of protecting depositors Tom is implementing our consumer protection and consumer protection includes things like fair lending. And you know, I mentioned previously that the opportunity to have a diverse workforce and diverse perspectives put you in the best position to be successful in that area. We can do this, help banks with this in a few different ways. One, we can make it easier for them to provide us with data. And then once they provide us with data, we can actually be resourceful with them to help them identify best practices when it relates to diversity, equity, inclusion. And then in addition to that, the last thing we can do is serve as a partner in it. This isn’t a gotchu situation. This is a situation where we are all working for the best interests of our people. And some of the things that we’ve done at the FDIC, we recently rolled out our automated system. So we’re asking banks with more than 100 employees to provide us with their diversity data. And we have a new automated tool to make it easier for them to do so. We also have a resources page for financial institutions, where they can go out to see where we’ve identified best practices, and a variety of the resources for financial institutions. And then later today, I’ll be on an open forum with the American Bankers Association, we’re chatting with them, answering their questions, you know, banks want to do the right thing. And we’re partners and helping them to do so. So those are some of the ways that we are looking to engage financial institutions, and I have to say that, you know, they’ve been more than willing to be involved as a part of this process.

Tom Temin: Well, I’ve got the feeling if anybody can get it done, you can. Nikita Pearson is director of the Office of Minority and Women Inclusion at the FDIC. Thanks so much for joining me.

Nikita Pearson: Thank you, Tom.

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