Two Giants of Finance Will Release Diversity Data
At the behest of New York City’s public pension funds, two of the biggest financial companies with headquarters in the city, Goldman Sachs and MetLife, have agreed to publicly disclose information about the racial and gender breakdowns of their staffs.
The disclosures could lead to changes that would benefit shareholders of those companies, as well as their current and future employees, said the city’s comptroller, John C. Liu, who is to announce the agreement on Monday. The public pension funds, whose assets exceed $118 billion, have large stakes in Goldman and MetLife .
“Studies have shown the benefits of a diverse work force on company performance and long-term shareowner value, and many companies say they are making serious efforts to recruit, retain and promote women and minorities,” said Mr. Liu, who is a trustee of the pension funds. “But without quantitative disclosure, shareholders have no way to evaluate the effectiveness of these efforts.”
New York City has the highest concentration of high-paying jobs in finance and advertising of any city in the country and maybe in the world. But those industries have been slower than others to move minorities and women into their management ranks, studies have shown.
Big employers are required to report data to the federal government on their efforts to provide equal employment opportunities, but many do not make those numbers available to the public.
Managers of the city’s pension funds have been using their financial clout to demand disclosure from the biggest banks and advertising agencies they invest in, but not all have acceded.
As shareholders, the pension-fund managers can propose that resolutions on disclosure be put up for a vote at a company’s annual meeting. To maintain control and deflect the attention such a proposal might draw, Goldman and MetLife agreed to make the disclosures annually, beginning later this year.
But one of the largest American advertising companies, Omnicom Group , did not agree to the pension funds’ demands, so the matter is expected to be on the ballot when Omnicom’s shareholders meet in San Francisco on May 22.
The proposed resolution cites an academic study that found that “racial disparity is 38 percent worse in the advertising industry than in the overall U.S. labor market.”
Omnicom, whose ad agencies include BBDO Worldwide and DDB Worldwide, challenged the pension funds’ standing to propose that resolution. But the Securities and Exchange Commission rejected that argument.
In focusing on Wall Street firms, the pension funds cited federal data that showed that white men held 64 percent of the management-level jobs in the financial-services industry, while minorities held less than 10 percent of them. Those numbers did not change significantly during the 15-year period from 1993 to 2008, the United States Government Accountability Office found.
Several class-action lawsuits have been filed against big banks and brokerage firms on behalf of women and minorities who complained that sexual and racial discrimination had limited their chances of advancing and succeeding at those firms.
Jake Siewert, the chief spokesman for Goldman Sachs, the big investment bank based in Lower Manhattan, said in a statement: “We believe that Goldman has made significant strides on improving the diversity of our work force, and we are committed to doing even better going forward. Transparency will help external stakeholders make their own judgments about how well we are doing on that commitment.”
Frans Hijkoop, executive vice president for human resources at MetLife, said: “A diverse and inclusive work force has been an ongoing focus for MetLife, and we have made steady progress over the years. At the same time, we are continuing to make additional strides to promote diversity.”
The pension funds include the New York City Employees’ Retirement System, the Teachers’ Retirement System, the New York City Police Pension Fund, the New York City Fire Department Pension Fund and the Board of Education Retirement System.
Together, they own over 1.2 million shares of stock in Goldman Sachs, over 2.3 million shares of MetLife and about 709,000 shares of Omnicom.