JPMorgan Chase is tackling structural racism through a set of strategies that pursue equality for Black and Latinx employees, business owners, suppliers, and communities of operation. The strategies are thoughtful, actionable, and designed to drive measurable progress.
— By Debra Jenkins
When Brian Lamb became the Global Head of Diversity & Inclusion at JPMorgan Chase & Co. on May 4, 2020, he stepped into a position filled with challenges. The newly created position reports to the company’s co-presidents, demonstrating the strong commitment JPMorgan Chase has to developing products and services, supporting employees, and serving clients through a diversity lens. He is responsible for integrating new strategies that build on the firm’s solid existing foundation of supporting underserved and disadvantaged communities while leveraging existing diversity and inclusion (D&I) initiatives.
Lamb plays a large role in strengthening the company’s culture, an effort that became even larger with JPMorgan Chase's Oct. 8, 2020, commitment to spend $30 billion over the next five years for advancing racial equality and eliminating structural racism in the banking and housing industries and significantly increasing spend with Black and Latinx suppliers.
Publicly Committed to Change
The $30 billion commitment contains many components dedicated to the Black and Latinx population. They include $8 billion in mortgages for 40,000 home purchases; $4 billion to refinance 20,000 mortgages; finance 100,000 affordable rental units with $14 billion in new loans; $2 billion for 15,000 loans to small businesses; and $750 million spend with diverse suppliers.
Other components include helping 1 million people open low-cost checking or saving accounts and investing up to $50 million in the form of capital and deposits in Black and Latinx-led Minority Depository Institutions (MDI) and Community Development Financial Institutions (CDFI). To accelerate progress, executives are held accountable through performance evaluations and compensation decisions. Even the already generous current philanthropic five-year capital investment of $1.75 billion is increased to $2 billion.
The strong financial commitment is the result of thoughtful and intentional strategizing to drive economic inclusion for Black and Latinx employees, entrepreneurs, businesses, community members, and suppliers. It is a massive effort to bring change.
Brian Lamb is poised for the challenge, bringing to his position extensive experience in financial services, investment banking, and retail and commercial banking where he led most lines of business, including brokers/dealers and wealth and asset management. He also had a role at a Fortune 500 company bank where he led corporate responsibility and reputation, D&I ethics, and ESG strategies. The consistent theme of his leadership in every role is that he always stays very involved in making sure the firm develops and nurtures the right culture which means D&I is a core principle. It is his past broad experience in the financial industry and his passion for bringing positive change that brought Lamb to JPMorgan Chase where he is building on the foundation put in place by the leadership of the Chairman and CEO Jaime Dimon.
Goal Driven, Business Led and Actionable
The first order of business was setting strategic goals.
“One goal is to create a holistic framework that fits the considerations of importance to the global regions, lines of business and functions. The framework looks at the firm’s mission and purpose and the principles we want to guide all our efforts and drive progress. Another goal is focusing on the employees of the firm and the key stakeholders. There is no doubt that the events of the past year forced us to respond in a much stronger manner to a long standing challenge in the Black, Hispanic and Latinx communities,” he said.
Lamb developed an action plan that has specific, actionable, bold, and measurable goals as to how JPMorgan Chase would address systemic racism and structural barriers to economic inclusion and close a widening gap. Lamb also follows a philosophy for employees he calls "Inside-Out."
“We have to focus on our own firm of 250,000+ employees, so they can feel like this is a culture of inclusion,” he explained. “We want to build on what was there and put tangible actions in place to drive the culture forward.”
The Path Forward Commitment initiative to stem injustice and systemic racism in the Black and Latinx communities is business led, and that is critical to addressing the long-standing barriers to economic inclusion and creating wealth opportunities. The importance of the initiative being business led is so that all stakeholders step back and look at the ways the firm could make a true impact and improve.
“We felt like the data, own assessments, and the feedback from people in the community are the underpinnings that led to the $30 billion Path Forward Commitment. We also used data to inform what needed to be the makeup of the commitment. Home ownership is a priority. We know from an economic inclusion perception that entrepreneurship, business growth, and job creation is important. We know that supplier diversity is important, so we committed the $750 million we want to spend with Black and Latinx businesses in addition to current spend,” Lamb said.
A key element of economic inclusion is spending money with businesses, so they can ultimately create jobs and prosperity within the cities they reside. Other components include providing access to banking and hiring 400 wealth advisors and home ownership advisors in JPMorgan Chase local markets.
Highest Level of Accountability
JPMorgan Chase is not leading with philanthropy. Having said that, the MDIs and CDFIS are important partners critical to plan execution. They are included in the holistic approach. Policy and philanthropy and working with colleagues in corporate responsibility is placed right next to the business community commitments.
The strategy amplifies the commitments in each of the cities JPMorgan Chase is targeting by providing thoughtful and meaningful investments. A good example is the Entrepreneurs of Color program. It was started in Detroit and then scaled around the country. The program is currently helping entrepreneurs get through a difficult time due to the COVID-19 pandemic, proving its value no matter what economic conditions are like.
All the activities supporting the commitments are tracked, and there will be transparent reporting to partners and stakeholders and a high level of internal reporting. A large variety of metrics are used to monitor progress. They include housing, small business assistance, advisors hired, branches built, the work done to make partners of CDI and MBIs and HBCUs, and many more. Metrics are used for tracking, to celebrate successes, and to make course corrections as needed.
Structural racism is a longstanding problem for so many businesses, driving many decisions. It impacts decisions about who is hired, the suppliers selected, partners and collaborators included, and much more. The Path Forward Commitment initiative takes specific steps to address structural racism.
“We have to go at this from a cultural and sustainable approach. First, we need a high level of accountability in place. We worked with our Chairman and CEO to build upon prior approaches and to formalize with our most senior level leaders in the firm," Lamb explained.
"How will we hold them accountable for making improvements, representation up and down the organization, and importantly creating an inclusive culture? We look at our most senior–level leaders and evaluate them on our progress towards the commitments and goals we have set for each of them. They are held accountable in regards to their own performance review and compensation. That level of accountability is crucial and we believe strikes right at the heart of driving cultural change.”
The company is also looking internally and externally at policies, procedures, and processes that get in the way of tearing down structural barriers. It could be revising the onboarding process or identifying suppliers that can do business with JPMorgan Chase. One step is working with Tier 1 suppliers to identify how they can increase diversity in the supply chain.
“We launched an effort with our largest suppliers around the world and challenged them to look at their own processes and policies with regards to supplier diversity, transparency in reporting, and their focus on their own spend to amplify our Tier 2 spend,” says Lamb.
Laser Focused on Progress
In fact, all processes internally and externally are evaluated to ensure roadblocks to racial equality are removed – cybersecurity, funding, networking opportunities, and so on. Specific programs like Advancing Black Pathways helps JPMorgan Chase keep focus on specific programs impacting people, which in this case is the Black community.
“This program enables us to amplify the work here and lets us face off directly with the Black community inside and outside the firm. It’s been very successful in driving sustainable progress in growing our employee representation,” Lamb explained.
At the most senior levels, the company is up over 50 percent compared to the last few years in terms of representation of Black leaders in the firm. A big part of that has been the work done by Advancing Black Pathways as well as the work done to respond to businesses in the COVID-19 environment.”
The impressive JPMorgan Chase commitment to the Path Forward Commitment and eliminating systemic racism has specific goals and specific action plans. Unlike general public promises made by other companies, JPMorgan Chase knows exactly what it expects to accomplish and the timeframe it plans on meeting. This will bring true, consistent, positive change to the entire financial and banking industry.
The implication is the $30 billion Path Forward Commitment really does not end at $30 billion. It will start a chain reaction as other companies follow JPMorgan Chase's lead and develop their own commitments to bring economic prosperity to disadvantaged and underserved people, businesses, and communities.