Wells Fargo CEO Charlie Scharf apologized Wednesday after saying the financial services industry has “limited” Black talent to choose from when hiring senior management, and he reiterated his commitment to improving diversity amid a national reckoning on racial injustice sparked by the death of George Floyd.
“I apologize for making an insensitive comment reflecting my own unconscious bias,” Scharf said in a statement released Wednesday. “There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise."
His financial services experience has taught him that people in the industry have not done enough to improve diversity, especially in senior positions.
“And there is no question Wells Fargo has to make meaningful progress to increase diverse representation," he said. "As I said in June, I have committed that this time must be different.”
Scharf, who leads the largest U.S. bank by the number of employees, was under fire after Reuters published a report Tuesday referencing remarks Scharf made in a June 18 internal memo sent out to staff as protests, as well riots, broke out across the country. The memo was titled: “Our commitment to change.”
"While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from," Scharf, who is White, wrote in part of the memo, which was seen by Reuters.
He also received criticism during a more than 90-minute video conferencing meeting held with staff during the summer to discuss the challenges the company has faced in reaching diversity initiatives due to a lack of qualified minority candidates. While some participants said the call was constructive and noted Scharf’s sincerity, others said they took offense, according to Reuters.
The report caused a firestorm on Twitter. Among those criticizing Scharf was Rep. Alexandria Ocasio-Cortez who said: “Perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit Black workers.”
Scharf said Wells Fargo, which is headquartered in San Francisco, is now “requiring diverse candidate slates for key roles with compensation of more than $100,000 and increasing business with diverse suppliers.”
He also reiterated that the company has hired new diverse senior leaders over the past few months, including two members of the operating committee: Lester Owens, head of operations, and Ather Williams III, who joins in October as head of strategy, digital and innovation.
The company will hire a leader for the new diverse segments, representation and inclusion group, responsible for advancing the company’s diversity efforts in the marketplace and workplace. Scharf named Kristy Fercho, who was recently hired to lead home lending, and Gigi Dixon, an internal candidate promoted to head of external relations.
“Over the past several months, I have greatly enjoyed and benefited from many conversations with the Black/African American Connection and other Team Member Network affinity groups,” Scharf said. “I am committed to continuing to listen and learn and appreciate all of your help in driving meaningful change at our company."
Scharf also spoke of new initiatives to expand outreach and sourcing opportunities with diverse talent, and build engagement with historically Black colleges and universities and Hispanic-serving institutions. Wells Fargo is developing a new anti-racism training course and seeks to improve senior leader accountability.
Year-end executive compensation will be reevaluated based on their progress in improving diverse representation and inclusion in their area of responsibility.
Wednesday’s statement came after Scharf already apologized Tuesday through a shorter quote released on Twitter.
“I am sorry my comment has been misinterpreted,” he said. “The financial industry and our company do not reflect the diversity of our population. We, at Wells Fargo, are committed to driving change and improving diversity and inclusion.”