Diversity correction

I'm seeing a thread abt diversity once a month. At what point will an MD or 5 get fed up w having to hire 'too many diversities' (I am by no means endorsing this mindset and have no clue wether or not these people are qualified or not)? Wouldn't they just make their own firm/bank with their own principles?

Comments (21)

  • Prospect in IB - Gen
May 6, 2022 - 4:08am

We need more diversity at the higher levels of banking. Force 60-70% of new MDs to be diverse candidates and see how they like it

May 6, 2022 - 7:39am
dealkuro, what's your opinion? Comment below:

While your comment isn't wrong, this is the true litmus test for which banks actually care about diversity. Banks with more diversity at MD level actually care and are building a pipeline.

Most Helpful
May 6, 2022 - 11:11am
capex fairy, what's your opinion? Comment below:

I'm sorry to burst your bubble but the idea that diversity candidates do a worse job once they hit the desk FT is a complete myth. After going through whatever training program the bank has set up, 85% of first years are within 1 SD of the mean in terms of ability, with the remaining 15% being split between the top and bottom analysts. 

This is a job that requires no technical skills, no real intelligence or mental analysis, and no differentiating traits other than being hardworking and willing to grind. You provide no value other than your ability to get worked to the bone. 

And in the long run, diversity hires actually add more value because at this point, many clients actually do take diversity pretty seriously. It's extremely unlikely that a beauty brand is going to take on a strategic advisory team that's 100% men vs. a more well-rounded bank. The goal of these programs other than positive PR is to eventually have a more diverse senior management team that will continue to attract and retain clients in the future. 

  • Prospect in IB-M&A
May 8, 2022 - 12:29am

but the idea that diversity candidates do a worse job once they hit the desk FT is a complete myth. After going through whatever training program the bank has set up, 85% of first years are within 1 SD of the mean in terms of ability, with the remaining 15% being split between the top and bottom analysts. 

Source: trust me bro

I find it laughable that everybody is taking this seriously and assuming that there is a way to quantitatively measure the performance of an analyst (much less to precise enough data to use "standard deviations"). This guy is just pulling words out of his ass to defend the DEI pipeline that he broke in with.

  • VP in IB - Cov
May 8, 2022 - 8:53am

My group has 10-12 analysts. 4 bottom ones are as non-diversity as they get. Not only they are dysfunctional, they don't seem to accept or have any awareness of how bad they are (unlike 5th worst), let alone try to improve. We don't need a scorecard - we just know they suck. Wish we could fire at least two of them (and maybe we will) but for now I just have to keep telling the staffer to not put them on my deals. 
 

The lack of awareness and unwillingness to improve is in line with people trying to fake their diversity. 

May 8, 2022 - 12:17pm
teamryan15, what's your opinion? Comment below:

CapEx Fairy speaks the truth and alot of the usuals wont like it lmao

  • Prospect in IB - Gen
May 8, 2022 - 7:44pm

By that logic why don't banks just have classes that are 100% diversity? If there is no difference between such hires like you say, I don't think that would dilute the talent pool, since there is no such thing as "talent" anyway (any idiot can do this job) why don't banks just hire 100% diversity to balance out their lack of diversity in the past? Would that be problematic then? At what % of diversity hires does it become problematic even if such hires are more value add?

I agree with your premise that diversity hires are more value add, but I'm sure there are many discriminatory things that companies can do that are more value add. Should discrimination be allowed just because it gives companies more value?

May 9, 2022 - 12:57am
IncomingIBDreject, what's your opinion? Comment below:

Companies aren't choosing which bank to lead on a deal based on the diversity of the analyst class. A combination of having connections to the MD, and previous bank track record in the space are the biggest factors. 
Corporations are always seeking out ways to make the most money and only portray the DEI angle through advertising and messaging but it becomes largely irrelevant behind the scenes. Are any of this corporations opening up factories in Baltimore to give poor black people jobs? No they outsourced everything abroad to increase the bottom line. Similarly, investment banking is largely out of the public eye and hence companies will pick the bank they are most familiar with that will get the best share price for them.

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  • 2
May 9, 2022 - 2:46pm
capex fairy, what's your opinion? Comment below:

The point isn't to attract clients now through a diverse analyst class (although clients absolutely care more than you think - diversity initiatives are positive PR for a reason), but to set up a diverse leadership in 5-10 years that will continue to retain and attract clients. 

Investment banking services are also largely commodified - "track record" in the space means literally nothing. Every bank will reach out to the same people and run the same process - most of the execution risk in a banked process comes from the client / management side, not the bank. Diversity initiatives are just another way for the banks to generate positive and differentiating PR against their competitors. 

Also you seem to have a pretty limited understanding of the banking process (large, public corporations). Plenty of startups, tech companies, growth companies that absolutely care about DEI both on a professional and personal level. Picking a 100% white male advisory team for a sellside of a cosmetics company when the bankers will likely be interfacing with an outsized number of female counterparts is simply a sub-optimal business decision. 

May 9, 2022 - 12:59am
IncomingIBDreject, what's your opinion? Comment below:

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