Just days after anointing four white men as the most likely contenders to succeed CEO James Gorman...
...Morgan Stanley has settled a lawsuit filed by the bank's former chief diversity officer alleging that the bank discriminated against black women. The terms of the settlement (including the dollar amount) weren't immediately disclosed.
Morgan Stanley, which was sued last year by its former head of diversity for discriminating against Black female employees, has reached a deal to end the lawsuit: BBG— zerohedge (@zerohedge) May 24, 2021
$ > diversity
It wasn't immediately clear how much Morgan paid to settle the lawsuit, which was filed against the bank and two top executives by Marilyn Booker, the former diversity chief who claimed she was fired in December of 2019 after pushing for a plan that she said would help promote career advancement for Morgan Stanley's Black employees.
The suit, filed roughly one year ago, alleged that Booker's firing reflects a pattern of widespread discrimination against Black and female employees at the investment bank.
"Clearly, Black lives did not matter at Morgan Stanley," the suit stated.
The original complaint included allegations about instances where Booker was allegedly discriminated against during her 26 years at the firm, including one time when she and another black employee brought in a deal, only for white colleagues to get the credit.
The suit notes that, until recently, just three of Morgan Stanley's operating committee are women, and none are Black. As for its board of directors, the suit says that 10 of 14 board members are men, while only one is Black.
The settlement likely won't go unnoticed by the financial press, just as Morgan Stanley's recent personnel shift notably bucked the trend at American megabanks to promote women to take over as the next generation of CEOs. Citi's Jane Fraser took the reins earlier this year becoming the first female CEO of a Wall Street megabank. And JPM's latest shakeup suggests that a woman will likely succeed CEO Jamie Dimon.
In an editorial published Monday afternoon, shortly before news of the Morgan diversity settlement hit, Bloomberg excoriated Morgan for being too white and too male, asserting it was "not a good look" while declaring that improving diversity should be "an urgent task."
But in an era in which executives are being judged not just for their ability to turn a profit but also for their firm’s role in society, a lack of diversity among senior managers in a position to lead the firm in the future is not a good look. Contrast Morgan Stanley’s top CEO candidates with JPMorgan’s, where two women are competing head to head for the No. 1 job. While the potentially combative setup isn’t ideal, at least there has been a concerted effort to groom a CEO beyond the usual suspects.
Improving diversity is an urgent task Gorman needs to tackle well before his successor takes over, if the data is anything to go by. As of 2018, the firm’s most recent numbers, of about 1,700 executives, just 23 were Black men and 14 were Black women. Women held about 18% of those jobs. And the firm’s operating committee is still dominated by White men, as is the next level of management, where 60% are White men.
To be sure, Morgan's recent slate of promotions didn't completely neglect women: Sharon Yeshaya, the head of investor relations, will become Morgan's new CFO. But her photo wasn't included with the four men who are likely to succeed Gorman, because she's very clearly not in the running.
That doesn't mean she won't ever be CEO of Morgan Stanley. But definitely expect to see more of Yeshaya as the bank rolls out the next wave of its diversity PR response.