Mandate vs.

Business Strategy
By Mark S. Brantley, Esq. Chairman of the Board, Municipal Credit Union

A Case For Diversity:

In 2010, President Obama and Congress passed the Dodd-Frank Act to put in place safeguards for the prevention of another 2008 financial crisis in the future. To her credit, Congresswoman Maxine Waters included Section 342 that directs financial services regulatory agencies to establish an Office of Minority and Women Inclusion (OMWI) that shall be responsible for all matters of the agency relating to diversity in management, employment, and business activities. The agencies under this mandate include but are not limited to: the Treasury Department, Federal Reserve, Comptroller of the Currency, Securities and Exchange Commission (SEC), newly created Consumer Financial Protection Bureau (CFPB) and the National Credit Union Administration (NCUA). Each of these regulators must report to Congress on an annual basis their progress in developing diversity standards and assessing minority and women participation in the workforce of the entities they regulate. Later this year, an interagency working group made up of OMWI directors plans to publish for comment a Proposed Policy Statement outlining joint standards to assess diversity efforts. The scope of Section 342 is broad and affects banks, credit unions, publicly traded corporations and the companies that supply them. The SEC has already taken affirmative steps in implementing its assessment of diversity policies and practices of publicly traded companies and their boards. For example, the regulator approved a rule that would require disclosure of whether, and if so how, a boards nominating committee considers diversity in identifying candidates for directorships. Despite the small progress made, much more is needed to diversify boardrooms and the ranks of senior management. But, companies can take a more proactive approach and not wait for the mandates of the federal government. For instance, billionaire Robert L. Johnson, former owner of BET, recommended companies to follow the RLJ Rule. This voluntary policy was designed to encourage managers to identify and interview at least two qualified minority job candidates (at the director/ managerial level and above) before filling a position and to interview qualified minority-owned businesses prior to awarding a procurement contract. The bottom line is diversity must be embraced in order for companies to remain relevant and sustain growth. Whether by mandate or business strategy, it is time for corporations to fully utilize our nations human capital resource, which includes minorities and women.

s we commemorate the 50th Anniversary of the historic March on Washington, little is mentioned about the man who first conceived of the plan, labor and civil rights leader A. Philip Randolph. Nevertheless, history tells the story of the meeting in 1940 between Randolph and then President Franklin Delano Roosevelt who in response to his demand for greater diversity replied, I agree with everything you have said. Now, make me do it. Soon thereafter, Randolph began to organize what was to be the first March on Washington. His goal was to diversify the armed forces and open doors of economic opportunity for African Americans related to the business activities of World War II. In exchange for calling off the March, FDR issued Executive Order 8802 that stated, There shall be no discrimination in the employment of workers in defense industries or government because of race, creed, color, or national origin. Moreover, the order included a committee established to investigate reports of discrimination while providing a forum for legitimate complaints to be heard. Indeed, Randolph was successful in making [FDR] do it! Decades later the same case can be made; but now, studies also have shown diversity to be a good business strategy. A position paper entitled, Dodd Frank, Diversity and the Credit Union Movement (see www.aacuc. org) referenced a Forbes study that reported, [a] diverse and inclusive workforce is necessary to drive innovation, foster creativity, and guide business strategies. Not long ago, the National Association of Corporate Directors impaneled a blue ribbon commission that said, Boards must strive for diverse composition as a means of strengthening their own ability to make wise and informed decisions. In light of this, companies should no longer perceive diversity as a separate, remote business practice; rather it should be viewed as a crucial factor in staying competitive through the creation of new ideas. Diversity mitigates risk and promotes independent thinking to avoid moral hazards. Simply put a diverse workforce fosters good business!

Amserdam News Advertorial 8.26.13.indd 1

8/26/13 5:15 PM