Putting Money Where Your Mouth Is: Diversity Scores for Bank Groups

By May 27, 2021July 4th, 2021No Comments

One treasury team factors the diversity of its bank coverage teams into share-of-wallet decisions.

As corporations articulate diversity and inclusion (D&I) goals more publicly, treasurers are setting out to live up to D&I values on their own teams and apply them to their banking relationships as well.

  • At a recent meeting of NeuGroup for Tech Treasurers, one member said his team surveys its banks on the diversity of its coverage teams, resulting in a score that treasury takes into account for discussions around share-of-wallet allocation.
  • Another treasurer called this a “really innovative” approach. “I’ve not heard of other people doing this in terms of allocating wallet share based on the diversity of coverage side. That’s a good way to put your money where your mouth is.”

Taking a hard line. To do the scoring, treasury asks its banks for an EEOC report detailing the diversity of their employee base as well as the specific information about the company’s coverage team.

  • “Some banks were unwilling to provide the data in a couple cases,” the member said. “I took a pretty hard line on it and said ‘If you don’t provide the data, you get a zero, and that is how we are going to score you.’ There are a couple of banks in that category, and it impacts them.”
  • The diversity score is one element in the company’s share-of-wallet model and could also be a factor in seeking rotations on coverage teams.

Gray areas. Another member said that he sees this as an interesting idea, but worries about situations where a bank may only have one or two employees covering the company.

  • “How are you expecting banks to then react?” he asked. “How do you deal with the fact that low numbers of coverage may impact the scoring, given the size of coverage teams?”
  • The member replied, “There’s not a perfectly easy way to answer the question, and it does create some of those gray areas.”
Justin Jones

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