Podcast: Investing in Racial Equity with Goldman Sachs

In this edition of SIFMA’s Diversity, Equity & Inclusion (DEI) podcast series, SIFMA’s Amena Ross, Managing Director of Advocacy, sat down with Erika Brown, Chief Diversity Officer at Goldman Sachs, about Goldman Sachs’ commitment to diversity and inclusion, and the efforts they are making towards achieving racial equity.

Explore this podcast to learn more about:

  • Goldman Sachs’ diversity, equity and inclusion programs, trainings and initiatives related to recruiting and retaining diverse talent and developing diverse leaders.
  • The long history of Goldman Sachs investing in black communities and black businesses.
  • Current initiatives to help clients diversify their boards and connect them with diverse board candidates.
  • And more!

For more information on fostering and expanding workforce, client, and supplier diversity equity and inclusion, please visit www.sifma.org/diversity.

edited for clarity

Amena Ross: Thanks for joining us for the latest episode in SIFMA’s D&I podcast series. I’m Amena Ross, Managing Director of Advocacy at SIFMA. I’m here today to talk with Erika Brown, Chief Diversity Officer at Goldman Sachs about Goldman’s commitment to diversity and inclusion, and the efforts they’re making towards achieving racial equity. Welcome, Erica.

Erika Brown: Thanks, Amena. Great to be here.

Amena Ross: So, Erika, let’s begin with Goldman’s current work on D&I. Can you walk me through the programs and trainings the firm offers to foster diversity and inclusion? Which have been the most effective and why is that?

Erika Brown: Sure, thanks. As you can imagine, Goldman Sachs has many programs whether or not it’s diversity recruiting programs, programs to retain and develop our diverse talent, and programs that are training to ensure that we have inclusive leaders at the firm. And effective managers at the firm that bring out the best in our diverse teams.

I think I’d like to take this opportunity to share with you some of the work that we’ve most recently done in the space of racial equity. So, we already had initiatives in place around the development and coaching of our black analysts and associates. We also already had initiatives around retaining our black MDs and developing a strong partner pipeline.

But in the age of racial equity and having to build greater understanding of the lived black experience of our colleagues we put new programs in place to make sure that our leaders understood race and identity in the workplace. That there were reverse mentoring programs in place for our senior-most leaders to be mentored by our diverse black MDs and their lived experiences.

A nine-month curriculum that goes through systemic racism at its core. The history of black people in this country and all the way through to the experience of black people in the corporate workplace whether or not it’s micro-aggressions or otherwise.

So, we’ve put a lot of work in to the trainings that are there, and we’ve also advanced the concept of ally-ship. We’ve developed the guide for “Allies for Racial Equity,” and we’ve developed a conversation around racial equity that are facilitated in each of the divisions and led by divisional leaders so that not only can our leaders be informed on the background and the experience of their black colleagues, but have the opportunity to have a dialogue on it as well.
Amena Ross: That is so important. It’s definitely something that our SIFMA D&I Council has been focused on. Looking at inclusivity and how to create an inclusive environment for employees who are from groups that have been historically disadvantaged so, that’s really awesome work.

I know that Goldman has been very vocal about investing in the power of black communities and supporting black business. In essence, committing capital towards creating change. What specifically has the firm been doing in this space?

Erika Brown: Goldman has a long history of investing in black communities. One of the things I would point people to is the Urban Investment Group. Their work over the years have focused on several key areas. Investing in community infrastructure whether or not that’s housing or schools. Providing capital to black-led companies whether or not they’re real estate sponsors or not for profits as well as financing small and minority-owned businesses.

The Urban Investment Group has invested around $10 billion to date and nearly $8 billion of those $10 billion have been in minority communities. That’s something we’re very proud of at the firm. We also have a program called 10,000 Small Businesses. It’s an education program that’s served over 10,000 entrepreneurs across the country to grow and create jobs.

Nearly 40 percent of those businesses are businesses of color. Sixteen percent are black business owners, and we work very closely with organizations like the National Urban League, local community colleges and other resources to develop resources and thought leadership for small, and black, and minority, and women-owned businesses.

Amena Ross: It’s really great to hear about all of those initiatives. I’ve heard a little bit about Goldman’s work with your clients to diversify their boards. Could you talk a little bit about that?

Erika Brown: Thanks for asking that question. We’ve been very excited about our initiatives to drive board diversity. If you recall, a year ago in January our CEO, David Solomon, made an announcement that Goldman Sachs would not take companies public without at least one diverse board member. That was effective last July.

This July that number will go up to two so, companies going public with Goldman Sachs will have to have two diverse board members. Now, in everything that we do in the diversity and inclusion space at Goldman Sachs we don’t just set the policy. We try to make sure that whether or not it’s our clients or our internal leaders that they have the tools to be successful in advancing and implementing that policy.

So, we have built a database of qualified diverse board candidates that’s over 500 people that have talked to Goldman leaders that have expressed an interest, shared their qualifications, shared their core competencies. Companies that could be of interest to them, types of boards that are of interest to them, and we are leveraging this database to ensure not only the companies that we take public, but all of our client firms have access to potential diverse board candidates.

We’ve made several placements to date. Many of the placements are women of color. It is across all dimensions so, whether or not it’s diversity of sexual orientation, gender identity, race and ethnicity we have partnered with many of our strategic diversity partners that we’ve leveraged over the years, and we think that we can really make our mark in this space.

Amena Ross: It’s so good to hear that as an industry leader you’re using that ability to push the industry forward in really positive ways so, thank you for that. Based on these activities there’s much the industry can learn from your leadership. In that vein what are the challenges that Goldman has faced in moving the ball forward for diversity and inclusion in financial services, and how have you overcome them?

Erika Brown: We don’t claim to have it right, and I think that there are a lot of efforts within financial services to move the ball forward for diversity and inclusion. At the same time, I think we have some key pillars that have helped us to be successful in achieving some of the goals that we’ve set for ourselves.
The first thing I would say is we have the senior leadership. Our CEO, David Solomon, has made diversity and inclusion one of his top priorities. He’s leading by example. He is showing that leadership from the top and sponsoring D&I as a business imperative.

Without that it’s very hard to drive change throughout the organization so, I think all senior leaders need to be able to role-model certain behavior and set the standard for diversity and inclusion at their own firms.

I think we have taken it one step further with things like our board diversity policy as well as our stewardship efforts in terms of how we, as investors have voted during the proxy season when it’s come to nominating committees that have put forward all-male boards, for example.

I think we can also lead the industry through our actions, and at the same time make sure our own actions are reflective of that which we are trying to influence the industry. Whether or not it’s the diversity of our own boards when it comes to portfolio companies in our merchant bank, for example.

I think we have put a lot of programs in place. We’ve set aspirational goals. We do believe that that which gets measured gets done. That is one of the tools that our board and our CEO have enabled us to employ in driving diversity not only in terms of our aspirational goals for entry-level hires, but also, our goals for vice president representation which we just set last year. And over the next five years will be working hard to achieve, but change takes time, and it takes real intention.

That’s what we really have to work on to make sure that everybody feels that diversity and inclusion is part of their job. It doesn’t matter what level you are. Whether or not you’re a senior executive, a mid-level manager, or an entry-level individual contributor.

Everybody has a role to play, and we have to make sure that everybody feels that they have a role to play. That they have accountability in moving the needle on diversity and inclusion. Most people experience inclusion day in and day out with their peers. Not even with their senior leaders or their managers.

It’s very important that that accountability is at all levels. People are clear on what the objectives are. What diversity and inclusion means at their firms. What it is, and what it isn’t, and that this is a core value of the firm. And to be successful at the firm you have to drive forward to achieve diversity and inclusion goals as much as an individual contributor as the CEO is.

Amena Ross: That’s such a good point. I want to keep going down that vein so, looking towards the future what goals would you like to see achieved for diversity and inclusion in financial services in the industry? Because you talked a little bit about what your goals are at Goldman, but what are they for the industry as a whole?

Erika Brown: Sure, so, I think last summer a lot of companies in our industry set public goals around black representation at different levels where hiring of black interns or hiring of HBCU grads. I know we also set a public goal of doubling the number of HBCU grads that we hire over the next five years in the entry-level class of campus hires. A lot of commitments have been made especially, to the black community over the last year.

It is my hope that Goldman Sachs and all of our competitors achieve those commitments to drive racial equity at our firms. I think people are realizing that systemic racism is real. That it’s not a reflection of individuals at the firm or the greatness of the firm. The cultures and what they’ve achieved over the last 100, 150 years. At the same time, the system has to change. The net has to be broadened, and the playing field has to be leveled.

It is still meritocracy. I think people worry about lowering the bar when it comes to diversity and inclusion when frankly, it’s raising the bar. I think it’s increasing the pool of competition. Taking privilege out of the mix and creating true meritocracy in the system so, I’m encouraged by that.

I’m encouraged around the intention that all of our organizations will have to come with in order to achieve the goals that they’ve set publicly. I hope that the public will hold all of us accountable to the goals. I think we will see a lot occur over the next five years, and I think we should challenge and track the progress. I know at Goldman we intend to be transparent in sharing what our progress is year over year, and I hope that we will achieve our goals. That is my every intention.

Amena Ross: Okay, so, I’m going to pivot a little bit to something that all of us are dealing with right now, and that’s the Covid-19 pandemic. I’d like to ask you, how has that affected the industry and the larger globe? And how has it impacted the way that Goldman is approaching the D&I space?

Erika Brown: Well, it was just about this time last year when we all became aware of the coronavirus and had to relatively, immediately shelter in place. We were in the midst of, from a D&I perspective a well-planned Women’s History Month and International Women’s Day programming that we had to very quickly dismantle and pivot to a virtual forum.

I think a few positive things have come out of that virtual pivot. It was difficult at first, and at first, we thought, “This may be a much shorter, temporary period of time, and should we just postpone things? Push it back.”

We very quickly learned that it wasn’t about just postponing and pushing back, but rather our people needed the employee networks and connectivity all the more in the current environment that was very isolating for some and really challenging for others. So, the forums that we created, I think, were very meaningful, and we touched on really important topics of the time.

Whether or not it was the anti-Asian sentiment that was growing. Whether or not it was leading and managing through challenging times. Whether or not it was working flexibly and setting boundaries for work from home. Those were all topics that we took up.

Let alone black racial equity after Memorial Day weekend and the incidents of Ahmaud Arbery, George Floyd, Christian Cooper in Central Park, and the clear impact on the black community that these murders and injustices had.

And frankly, it wasn’t just an impact on the black community. It impacted people around the world. We had to bring people together to talk about it at different forums, and in different ways, and we did do that globally. Being virtual enabled us to do it globally, and they were instances that really affected people globally.

So, I actually think that the Covid-19 environment facilitated stronger global connectivity, and greater participation, and engagement in some of the conversations that we were having that were super important at that period of time.
Amena Ross: Right. Well, I try to keep up to date with everything that Goldman is doing in this space, but did you want to share with our audience any other initiatives that you all are very proud about or plan on putting forward in the near future?

Erika Brown: I think one of the things that we’re really excited about is the engagement that we have with our clients when it comes to diversity and inclusion. The partnership, whether or not it’s client events or whether or not it’s sharing our thought leadership, our content, some of the trainings that we’ve put together.

For example, I mentioned earlier our Allies for Racial Equity guide that is a guide and a workshop that we are sharing externally with our clients. We know that all of our clients don’t have Chief Diversity officers or large global D&I teams.

We have the resources and the intent to lead the industry and to be able to partner with our clients in doing that. And deepening relationships and developing thought leadership is something that’s very exciting for my team.

So, when we think about all the work that we do throughout the human capital management infrastructure we also have a completely separate body of work that we’re doing with the business leaders. With the Diversity & Inclusion Councils in the divisions with our most important clients that allow us to take an industry-led approach when it comes to driving diversity and inclusion within the financial services industry.

Amena Ross: Well, thank you so much again, Erika, for joining us today. It was a real pleasure chatting with you. To learn more about SIFMA and our work to promote diversity and inclusion please visit us at www.sifma.org, and you’ll see a link for diversity and inclusion on our home page.

And to learn more about Goldman Sachs’ impressive work in this space please visit www.goldmansachs.com/our-firm/people-and-culture. Thank you again.

Erika Brown: Thanks, Amena.