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Bill Singer Replies to SEC Commissioner Aguilar's Call For Boardroom Diversity
Written: May 6, 2011

Official portrait of Securities and Exchange C...

Securities and Exchange Commissioner Luis A. Aguilar

The Securities and Exchange Commission (“SEC”) just published the text of a recent speech by Commissioner Luis A. Aguilar that I republish verbatim:

Statement by SEC Commissioner:
The Abysmal Lack of Diversity in Corporate Boardrooms is Growing Worse

by Commissioner Luis A. Aguilar
U.S. Securities and Exchange Commission
Washington, D.C.
May 2, 2011

Today, the Alliance for Board Diversity released a report, Missing Pieces: Women and Minorities on Fortune 500 Boards — 2010 Alliance for Board Diversity Census, that confirmed what many of us have known for some time. The abysmal statistics regarding the lack of diversity in Corporate America are growing worse. This report found that women and minorities lost ground in America’s corporate boardroom between 2004 and 2010.

Specifically, the report finds that in the Fortune 100, between 2004 and 2010, white men increased their share of board seats in corporate America from 71.2% to 72.9%. Minorities and women shared the remainder with very few seats occupied by Asian Pacific Islanders, Hispanics or minority women in particular.

Thus, even though there are more qualified diverse candidates for corporate board seats than ever before, fewer of these candidates are being chosen for corporate board seats. Even though our nation has grown more diverse, the corporate boardroom is proving resistant to change.

I find this status quo unacceptable and question why at a time when there are more qualified diverse board candidates, we have less diverse board members.

Bill Singer’s Reply

If I have one quibble with Commissioner Aguilar, it would be to ask him a simple question: Where have you been ? Let me refer the Commissioner to excerpts from three articles that I wrote on the very topic of diversity that he now belatedly raises.

Why Is the NYSE and NASD Soft on Racism and Sexism
(, March 9, 2006)

[N]ot that I would ever suggest that there’s one set of rules for the major broker-dealers, and another set of rules for smaller BDs and their employees, BUT, gee . . . odd, isn’t it — the NYSE and NASD just don’t seem that bothered by discrimination and harassment in their own industry. Please, show me the cases those regulators brought in the past 50 years in which member firms were charged with permitting racial or sexual discrimination/harassment.

And what’s the message? The regulators unwittingly encourage intolerant behavior by not deeming these practices to be conduct that offends basic notions of “high principles” and “honor.” Do the SROs see such conduct as nothing more than an indiscretion?

Wall Street is no longer a quaint road between a church, on one end, and a river, on the other. It is a metaphor for the entire capitalist world. And that world, which we all live in, is populated with minorities and women. Try as Wall Street has for generations to marginalize those two groups, the fact is now inescapable. The securities markets in the United States are in a battle with international markets. If we don’t re-tool our industry to include more minorities and women in meaningful roles, we will inevitably lose out to more enlightened competitors. The NYSE may well become a luxury residential condominium. NASD may well become an off-shore gambling site.

I can think of nothing more disgusting than to know that you are capable of doing a job but are denied employment solely based upon conditions of your birth. I hear these heart-rending stories virtually every day when I am contacted by potential clients. If this cancer is tolerated by Wall Street’s regulators, how will we ever destroy it? If the NYSE and NASD see fit to bar folks from the brokerage industry because they have had felony convictions for drunk driving, then it’s high time we roll out the same artillery to combat illegal discrimination.

Women and Minorities on Wall Street: New Ad Campaign
( November 14, 2008)

Equal Opportunity

[C]lick on the television spot entitled “BrokerCheck?” Watch it. After you’re done, continue reading.

First off, this “Brokercheck?” spot urges investors to “check to see if a broker makes sense for you” at FINRA’s online Brokercheck service. Maybe it’s me (yeah, again, I know, I’m an oddball) but the implication I think the regulator is trying to send (or at least the logical inference that I am drawing) is that the five guys depicted in the broadcast spot are not all on the up-and-up. The regulator is saying that you just can’t tell who you’re dealing with these days. Lots of shady characters on Wall Street. Lots of crooks. That’s the point of the spot, as I see it. Use FINRA’s Brokercheck service and we’ll let you know if your broker is a crook. Am I right?

Now, let me make one last point. Remember the scene of the five apparent brokers? Three seem to be Caucasian, one is African-American, and one appears to be of South Asian ethnicity (I would swear it is Aasif Mandvi of the Daily Show, you tell me).

How nice it is of FINRA (and Wall Street as a whole) to finally recognize the existence of minorities within its ranks. Wonderful! Twenty percent of Wall Street’s brokers are African American and another twenty percent are South Asian. What a proud record of minority rights. Forty percent of Wall Street’s brokers are African-American and South Asian males. Maybe someone can check those statistics out? I mean, you know, the FINRA commercial shows five guys, and only three are white–that’s 60%; and by deduction, that leaves 20% as black and 20% as South Asian. I don’t think FINRA would have misrepresented the make-up of Wall Street’s stockbrokerage ranks. Certainly, not in the context of a commercial suggesting that some brokers are crooks. Then again, how nice that we’ve come such a long way that FINRA was comfortable even exposing itself to the criticism that it unfairly depicted minorities as representing 40% of Wall Street’s brokers.

Then there is this one, last aspect of FINRA’s ad. Not a single woman is portrayed!

True, let’s be fair. When Wall Street hires women it’s more likely than not to be as a secretary, a receptionist, or in some behind the scenes role with reduced opportunities to make the really big bucks. I mean, come on now, walk into a branch office (no, not those that recently shuttered close–go to some that are still in business) and do a boy-girl head count. You probably won’t find that many women stockbrokers. But, that is not to say that the good folks at FINRA don’t have a role for women in mind. If you look at the regulator’s “Bear Market”television commercial, you will see that they have a woman pushing a shopping cart in a supermarket–and she’s bedecked in such a nice sweater set too.

In retrospect, maybe FINRA’s Brokercheck? spot is sending a fair message–after all, perhaps it’s only the males you need to worry about as being unethical brokers, or maybe just the Caucasian, African-American, and South Asian ones. What a fine outcome for Latino and non-South Asian male brokers, and all those women too.

Women and Minorities on Wall Street: Part Two
( November 17, 2008)

[S]urely, women are about more than pushing a shopping cart. It’s not that the scene is unflattering as much as it perpetuates an image, particularly within the context of the three-part campaign, that men are the professionals on Wall Street and women are, at best, shoppers. Similarly, given how few minorities and women make up the corps of stockbrokers on Wall Street, I’m not sure that this is the time and place to highlight the allegedly ethnic and sexual mosaic of the FINRA regulated community–particularly when the actual statistics are not remotely on point.

If you still want to take issue with my point, here’s what I would ask you to consider. How many female, African-American, and South Asian CEOs and Chairpersons are there at the top 50 FINRA member firms? Excluding, say, Stan O’Neal and Vikram Pandit, how many recent or current CEOs or Chairs with those same attributes can you even name?

We now have Barack Obama set to enter the White House. We have Mary Schapiro at the helm of FINRA. About 13% of the U.S. population is described as African-American. About 4% is described as Asian (a far more expansive category than South Asian). About 51% is female. I’d love to see the actual statistics, but I’ll bet you that I’m right about the following:

51% of FINRA member firm stockbrokers are not women;

14% of FINRA member firm stockbrokers are not African-American; and

4% of FINRA member firm stockbrokers are not Asian.

Finally, yeah, I concede the point, our society as a whole doesn’t measure up. That includes law firms. That includes accounting firms. That includes every aspect of our workforce when in comes to the built-in discrimination between higher and lower paying jobs. However, as to Wall Street, until we begin to approach the reality of our population mirroring our employee population, let’s be a tad more sensitive about showing minorities in ads suggesting that some brokers are not honest, and let’s be a tad more sensitive in presenting advertising campaigns that are one-third devoted to dogs rolling over and one-third devoted to women pushing shopping carts.

Final Thoughts

Commissioner Aguilar’s official SEC biography presents a remarkable career that includes service as a high-profile dealmaker and Wall Street legal counsel. Rather than a mere academic or political crony, Aguilar had the chops for his role at the SEC. However, in these challenging times, he must do more than mount the bully pulpit provided by the SEC, especially when he sees the congregation dozing off or the spirit is not moving them. The present SEC is chaired by a woman (Mary Schapiro), two of the four commissioners are women (Kathleen L. Casey and Elisse B. Walter), and Aguilar was named by Hispanic Business Magazine in 2006 as one of the “100 Influential” Hispanics in the United States. Given the commendable diversity on the SEC, what more motivation is needed for its commissioners and Chair to get behind Aguilar’s initiative?

Having failed the investing public time and time again while it dilly dallied amidst signs of widespread market fraud and corruption, the least that we should expect from the five individuals that compose the SEC is some effort to transform Aguilar’s legitimate call for corporate-board diversity into action.


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