‘Time To Act’ Podcast Ep. 4: Why It’s Important To Have Diversity Roles In Leadership
Conversations around diversity and inclusion can be uncomfortable — particularly in the workplace. In this new podcast, host Y-Vonne Hutchinson — CEO and founder of ReadySet, a diversity and inclusion consulting and strategy firm — speaks with business leaders who are driving discussions within their organizations and taking bold action to advance and accelerate change.
Working with CEO Action for Diversity and Inclusion — the largest coalition of CEOs who’ve pledged to advance diversity and inclusion in the workplace — Hutchinson discusses topics such as allyship, intersectional divides and mental health inclusion with C-suite leaders who are showing their organizations and their industries that now is the time to act on diversity and inclusion.
Interviewer: How important is it to have diversity in roles of leadership?
Woman on Street #1: It’s absolutely essential. Not only do we know that it leads to healthier and more financially successful — and successful in every way — organizations, but it also provides role models for people as they move up the corporate ladder, who can actually visualize themselves in those leadership positions.
Woman on Street #2: You know, I think having diverse groups in leadership is what sets the tone for the entire organization and to be able to have diverse perspectives and a broad point of view, and you need all different voices at the table.
Man on Street #3: I think a lot of it is just creating a workplace and environment where people feel comfortable being themselves, talking about uncomfortable things.
Y-Vonne Hutchinson, Host: This is “Time to Act.” I’m your host, Y-Vonne Hutchinson. I am a diversity and inclusion expert. And through my company ReadySet, I work with organizations to help them foster a corporate culture that helps provide a sense of belonging to employees. On this podcast, I’m working with CEO Action for Diversity and Inclusion, the largest coalition of CEOs who have pledged to advance diversity and inclusion in the workplace. Throughout this series we’ll explore and highlight the recent steps companies are taking to tackle D&I. I’ll be talking to leaders of industry and diving into why they act as ambassadors for change.
Today, I’m sitting down with John Rogers. He’s the co-CEO, chief investment officer and chairman of Ariel investments, one of the largest minority-owned mutual funds in the U.S. He’s also a pioneer for diversity and inclusion in the financial services sector. John has woven D&I into the fabric of Ariel Investments since its inception. He sees diverse workforces as not only a nice-to-have, but as a competitive advantage that bolsters the bottom line. He’s created numerous initiatives and educational programs that aim to increase representation across all areas of business. We spoke about the importance of supporting minority entrepreneurs and giving them a place in the boardroom and beyond.
John, it is a pleasure to meet you. I’m super excited about the conversation we’re going to have today, and I just really appreciate you taking the time to talk.
John Rogers: Sure.
Hutchinson: I want to start off by getting to know you a little bit and what brought you to Ariel Investments. So, would you mind telling me a little bit about your background?
Rogers: No. I grew up in Hyde Park, Chicago, and I was very fortunate and I had two parents who were lawyers, and they got divorced when I was three. My mom stayed in Hyde Park and my dad moved to Brownsville and they were both pioneers in different ways. My mom was the first African American woman to graduate from the University of Chicago Law School. And my dad was an original Tuskegee Airmen and talked his way into law school and had the G.I. Bill pay for him to go to the University of Chicago, where he met my mom. When I was 12-years-old, my father decided, instead of buying me more toys and gifts, he was only going to buy me stock certificates and get me exposed to the stock market at an early age. And so after 12, I just sort of fell in love with the markets, played the stock market game.
I read my dad’s newsletters and the quarterly reports and the annual reports of the stocks that he had bought for me. And one of the things that he did that really smart was he let me keep the dividend checks that came in. They were quite modest. You know, my father wasn’t wealthy, but just getting a check in the mail that’s $20 or $25 when you’re a kid that age, that time in history, it was really refreshing and exciting and inspirational for me. I went off to Princeton, played basketball there for the legendary coach, Hall of Famer Pete Carril. And at the same time, while I had that extraordinary experience I was still playing the stock market. And so I had these two passions: the stock market and basketball. After I graduated from Princeton, I went to work at a firm called William Blair and Company, which was the largest regional brokerage firm in Chicago. Princeton alum Ned Jannotta got me into the interviewing process and it was a great experience.
I stayed there for two years, learned an awful lot about the investment world and decided I wanted to start the first African American-owned money management firm in the country, in 1983. I think one of the things I talked about, my father exposing me to the stock market, my mom exposed me to the fact that anything was possible. If you work really, really hard and you had an imagination, there was no limit to what you could achieve. And so I think that actually was the right mindset to have as an entrepreneur, when you’re 24 years old and you’re trying to do something that’s never been done before and trying to start the money management and mutual fund company without any performance history in an industry that had never had African Americans have a chance to really participate in was a daunting, daunting challenge.
Hutchinson: Wall Street has traditionally thrived on valuing the bottom line above all, often at the cost of social good. From the beginning though, John has emphasized social impact investing at Ariel. So, I wanted to ask him how he bucked the norm so long ago and how that mission has grown and evolved today.
Rogers: You know, being the first African American money management firm in the country, we felt a responsibility to talk about civil rights and economic justice as we developed our business. We knew that a lot of people sacrifice an awful lot to get doors open for us and to create the opportunities to, sort of, build a money management firm here in the United States, to be on some wonderful corporate boards. Again, so many people — civil rights leaders, the prior generations — had done so much to get these doors opened, it just seemed right for us as we were building our businesses to try to pay it forward and try to be open to get, hopefully, get doors open for others and opportunity for others. I kind of felt like it was sort of too young to really fully engage in the civil rights movement and so this was a way for us to make a difference at Ariel, by doing what we could as pioneers in the money management and mutual fund industry to try to get doors open for other African American entrepreneurs, as well as African American executives with board members.
So, we’ll talk to our management teams and say, you know, we’re disappointed that you don’t have diverse leadership on your team. We’re disappointed that you don’t have diverse board members. It’s hard for us to invest in you as a 21st-century company if you look like a 1940s company. So, having those kinds of conversations constructively with management teams and the companies we’ve invested in, we’ve been able to identify over 45 times where we’ve got a company to have what we call a “Jackie Robinson moment,” to have their first diverse board member because we challenged them, push them and convinced them it’s the right thing to do and how it would enhance the profitability and growth of their business to have diverse leaders on their board and in their management teams. So that’s something we’re really quite, quite proud of.
The other thing we do when we talk to our management teams — we were on the call today with the head of diversity of a large publicly traded company today saying, “We want to talk to you about are you doing business with minority-owned companies and making sure you’re doing business in all aspects of our economy — professional services, financial services, technology — along with the supply chain decisions?“
And that’s kind of a different conversation. People were just so used to the term “supplier diversity,” and don’t realize that that means that minority entrepreneurs are being locked out of the parts of the economy where the wealth and jobs are created today. So I keep reminding people that’s kind of a modern day Jim Crow with the Black and brown people doing the construction and the catering and the white men get to do the financial services, the technology and the professional services. That continues to be a challenge of today’s society. And, as we all know in watching our polarized politics of today, you know, there’s a lot of resentment around affirmative action. And some folks, you know, as much as again, the CEO is a believer and the board members are believers, but those decision makers often in the bowels of the organization really don’t want to be told they have to think about this issue. And they often think that Black and brown people got to where they are based upon, you know, unfair edge that they have because of their color; they got into a great school because of their race, they got a promotion because of their race, now you want to manage some of the money, too. That can be a challenge for us as we’re trying to build our business against the big guys we compete with.
Hutchinson: Something John is very vocal about is the need for more capital to flow into the hands of minority-owned businesses, in order to improve the local communities that they serve. Recently, John testified in front of the U.S. House Committee on Financial Services about the Heroes Act, a $3 trillion stimulus package that was passed in response to COVID-19. In his testimony, he commended the act but also shed light on the ways in which it fails to address racial inequality.
Rogers [testimony from U.S. House Committee on Financial Services]: The pandemic has made these disparities worse. According to research by Robert Fairlie, the number of black businesses sank by 41% between February and April, more than double the 17% decline of white business. Most of these are low margin, service sector areas that survive on foot traffic. They’re also far less likely to have significant savings or quick access to capital to stay afloat. These disparities are linked directly to the wealth gap, size, scale, and speed of the federal response to the model. I commend you all for acting quickly to try and prevent great depression. However, systemic inequality has limited the impact of the recovery effort.
Hutchinson: I was struck by John’s assessment of the widening wealth gap as it pertains to recovery efforts. So, I wanted to ask him more about what’s driving the economic disparity and what actionable change is needed to reverse the course.
How are you seeing the wealth gap? What are some solutions that you think can solve it? I would love if you could speak to that.
Rogers: Well, it’s a, it’s a big, big, big, big, big question. I think one of the key things I start with, though, is one that you sort of touched on, is that making people understand the wealth gap has gotten fundamentally greater over this last generation. You know, a couple of data points that I often mention: the Federal Reserve of St. Louis are under a project that Ray Bashara has been very engaged with, with his team, showed that between 1992 and 2016, college-educated Blacks saw their wealth decrease 10%, while college-educated white Southern wealth increased 96%. So up 96% for college-educated whites, down 10% for college-educated Blacks. That’s extraordinary. And then Kerwin Charles, who was the Dean of Yale’s business school, has all this data — he’s an extraordinary economist — that shows that relative to white Americans, we are worse off than our grandparents were. In getting people to really understand that even though the civil rights movement created all kinds of opportunities for us — to be able to vote and sit at the lunchroom counter and sit in the front of the bus — we’re not getting economic opportunities. And that’s part of it. That’s part of the what’s really, I think, gets left out.
Dr. King talked a lot about many progressive whites will deplore prejudice, but tolerate or accept economic injustice. And so, as white Americans are making decisions on who they do business with, that’s the first thing that’s helped create the wealth gap. If you only do business with companies that are majority-owned — people you’ve done business with for 40 or 50, 60 years, when African Americans weren’t allowed to compete in those sectors — the wealth gap’s going to get larger if you make economic decisions to only work with majority-owned businesses.
It’s just understanding, making people understand the challenges that we have faced coming to this country. You know, “The 1619 Project” that the New York Times featured — I think last year — was an extraordinary piece of literature in helping us to understand how tough it’s been from the days that we came here as slaves, as we started to make progress during Reconstruction and how that was taken away from us — even our 40 acres and a mule was taken away. The stories of Tulsa and the race riots there — where my great-grandfather owned a hotel — to many, many other kinds of violent confrontations that happened. Whenever we got a step ahead and started to make progress, African American business leaders were destroyed or lynched to pull back the opportunities that we thought were going our way.
All these things have conspired to create this enormous wealth gap that’s just continued to build, and build, and build over time. It helps explain why we don’t have multi-generational wealth that we can pass on from one generation to the next. We start behind. We ended up with more debt when we have to pay for college for our children. It’s an extraordinary spiral, it’s such a complicated and tough issue. The one way to not answer it is to continue to only do business with people that look like you in the majority community and not build strong dynamic minority leadership within your institutions.
Hutchinson: One way John is working to build a more diverse pipeline of talent for the workplace of the future is through education. Over 20 years ago, he founded Ariel Community Academy to educate underserved children on the Southside of Chicago about financial literacy and entrepreneurship.
Rogers: It’s been a terrific success. We have 500 African American students there now or more, and we’re teaching the kids about the stock market. We’re giving them real money to invest in real stocks. We go down and talk to them about how do you analyze companies, how you do the research, how you decide what stocks to buy, and when the kids graduate, they get a portion of the profits that they can utilize themselves. They put it into a 529 program, we match it with $500 to teach the kids the importance of matching. But if you think about it, not only are they learning about the stock market and learning about investing, they’re also learning about financial services careers and they’re learning about entrepreneurship.
The second way that we create pipeline, which I think is often lost, is that at a firm like Ariel — you know, you try not to talk about yourself, but you know — we’ve been around 37 years, and if we look at many of the financial services leaders in Chicago, we have been the pipeline for that talent. So, a firm like ours doesn’t exist. Maybe you don’t have a Mellody Hobson. Maybe you don’t have some of these other dynamic financial services leaders that are out there, making a difference in our country and throughout the world. So it’s a little bit of an argument and self-serving argument to say that you need to have successful African American firms that can often be pipelines for talent and next-generation entrepreneurs and business leaders.
Hutchinson: In the news lately, there’ve been a lot of conversations around board diversity. It strikes me you’re on several boards. So, I want to go there for a second and kind of ask you just what has your experience been, serving on these boards? What advice would you give companies looking to diversify their boards? And for entrepreneurs and emerging business leaders who want to position themselves to serve on boards, who might not have that mentorship, what would you tell them?
Rogers: That’s a lot there. I think it was about three questions or four questions there.
Hutchinson: I wanted to get it all in.
Rogers: I will try to get to it. You know, first of all, my experience on corporate boards has been truly a blessing. When it comes to what I would tell corporate leaders today when it comes to recruiting minority board members; that one, when you search far and wide for talent, you’re going to end up with a better team. As Reverend Jackson often says, baseball clearly became a better sport once Jackie Robinson started to play and people got exposed to then Willie Mays and Ernie Banks and Hank Aaron and all these extraordinary leaders. There was no doubt that once people started searching for talent everywhere, baseball became, again, a better sport. So it’s definitely the right thing to do for management to do this. It’s going to make their company stronger and it’s going to help them live up to the values they say they care about.
But, also, at the same time, I tell them if you’re going to go out and recruit your first minority director, make sure it’s someone that is committed to the civil rights agenda. Just don’t pick someone of color and not think about it. And when you hire your executive recruiter, tell them that you want to make sure that the person that’s going to come on that board and be that first person, that it’s going to be someone maybe who is going to have that spirit of a John Lewis; who’s going to understand sometimes you’ve got to make trouble, make good trouble, ask tough questions, challenge authority. You know, as John Lewis often said, if you see something that’s not right, that’s not fair, you have a moral responsibility to speak up and try to make change. Those are the kinds of diverse directors that you want on your board.
Hutchinson: That’s great. And I’m wondering if we could take some time and dig in a little bit more to some of your internal and external initiatives related to ESG [environmental, social and corporate governance impact measurement criteria] yes, but also to diversity and inclusion. Obviously you’re a part of CEO Action, so I’m just wondering if you want to speak to any of those initiatives or if there are other initiatives that you all are working on in that space that you’d like to talk about.
Rogers: Well, it’s been great to work with Tim Ryan and CEO Action. His leadership is unique. He’s making an enormous impact so we feel truly blessed to be a part of it, that he’s included us in his efforts and he’s building a great team of people — and of course, a lot of colleagues and organizations around the country. So that’s been a real positive.
I played basketball in college. You know, if you can search for basketball players all over the world when you’re building your team, you’re going to have a better team than if you just pick your favorite friends from the neighborhood. It’s this obvious, you know, and I think that I have to just remind people that and I tell them often. I tell people in boardrooms that my father always taught me the most important thing to do was to the live up to the commitments that you make to others. If this organization has a commitment to diversity and inclusion, and it’s on the website, it’s in the annual report and the CEO is talking about it, I’m not doing my job as a fiduciary if I’m not helping you to achieve the goals that you’ve said are top priority for you and your organization. So I’m here to help you achieve those goals, and I think people see that as a constructive way to engage around these key issues that are confronting our country today.
Hutchinson: Thank you for taking the time to talk to me, John. I really, really enjoyed this conversation so, thank you so much.
Rogers: Well you’re welcome. I appreciate you guys inviting me on and hopefully I have a little bit of a different perspective and point of view, and hopefully push people to think about these problems in a little bit different way.
Hutchinson: So, one thing that stuck out to me about the conversation with John that I thought was really powerful is the way that he thinks about underestimated entrepreneurs, right? And so often our underestimated entrepreneurs are underrepresented and they’re under-capitalized. And really thinking about, what does it mean to give minority entrepreneurs access to your networks and access to a seat at the table, right? And, and his experience, a seat at the boardroom table. I think that there’s a lot to be said about, you know, not just striving for economic participation, but also thinking about creating spaces for folks from underrepresented backgrounds to leave the wealth gap. That’s what this is all about. The wealth gap is a big problem. And you know, ultimately this conversation, what it highlights to me and what it has me thinking about, and I hope what it has you thinking about, is questions of economic justice. What does it mean to get uncomfortable with it? And how should we be thinking about closing that wealth gap?
So, what did you learn today from John Rogers about creating robust local economies through diverse workforces? Let us know in the comments section. We want to hear from you. We also want to know what you think of the show, so leave us a review. Subscribe to “Time To Act” for free on Apple Podcasts or wherever you get your podcast. You won’t want to miss upcoming conversations with groundbreakers, who are leading the charge to improve diversity and inclusion in their companies and industries. I’m Y-Vonne Hutchinson. Let’s keep the conversation going.
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“Time To Act: A Podcast About Diversity And Inclusion,” presented by PwC and CEO Action for Diversity & Inclusion™, features CEOs and C-suite leaders from multinational brands and regional businesses discussing why diversity and inclusion are defining factors in a company’s growth and success at scale. It’s more than checking the boxes — together, business leaders are listening, understanding and taking action for real change.
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This article was paid for by PwC and co-created by RYOT Studio. HuffPost editorial staff did not participate in the creation of this content.