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How to 'Really Advance' Diversity in Financial Services: Northern Trust's Thomas

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Northern Trust Asset Management President Shundrawn Thomas is being honored by ThinkAdvisor’s new LUMINARIES recognition program.   

Thomas spoke with ThinkAdvisor recently about how he got started in his career and what diversity and inclusion mean to both him and to the firm today.  

In the interview, the Chicago-based executive — who earlier worked at Goldman Sachs and Morgan Stanley — also highlights the importance of mentorship, sponsorship and “allyship” on his career path, as well as the latest developments at Northern Trust’s minority brokers program. 

When did your work, including Diversity, Equity & Inclusion, at Northern Trust Asset Management start, and what does this effort mean to you and for the industry?

I’m in my 18th year with Northern Trust. Shortly after joining, I went into a senior leadership role, and I’ve had the privilege of leading different businesses for an extended period. In terms of my role in asset management, I’ve been on the executive team for 13 years.

The aim of diversity, equity and inclusion has always been important to me. It’s almost indistinguishable from how I think about my responsibility as a leader. I have a strong conviction and, like others in the marketplace, believe that … when you have diverse perspectives and people who bring diverse backgrounds and skill sets, you get better solutions in business.

People like to talk about “the business case for diversity.” I would just simply say, “It’s just good business.” I would add that we all also benefit from it by becoming not only better professionals, but better people. That’s always been part of it.

Now, the events over the last 18 months have created an atmosphere that has brought more awareness and focus to this dialogue. I have used my position, or my platform, to bring perspectives that I have and that reflect … things I’ve done on a consistent basis in my day-to-day leadership.

How about NTAM’s Minority Brokerage Program? Could you describe your involvement and some details?

It’s a clear example of some things we seek to do from a business standpoint in order to be a good partner in the marketplace and to help advance opportunities among diverse companies and in diversity [overall]. 

As for minority brokers in our industry, there’s been a minority brokers program in existence for some time at Northern Trust Asset Management. In fact, we started our program in 2007. I’ve had the opportunity to work with our leadership team on this … since I transitioned into the role of president in 2017.

After looking in depth at the program, we decided to allocate or target 10% of our overall trading for certain commingled funds to be executed by minority-owned brokerage firms in 2018. In exceeding that goal over the ensuing two years, we were able to increase the amount of business that we did with those minority brokerage firms by about four-fold.  

Earlier this year, we increased that target from 10% to 15%, deepening our commitment. 

We looked at this as a business imperative. When you put a goal or target on something, you’re generally going to have a much better, bigger impact and a much greater probability of achieving success. It’s important for firms to take steps like this.

When the program began, we had seven firms. We have 11 firms that are part of our program today. It includes ethnically diverse-owned firms and veteran-owned firms, women-owned firms and firms owned by disabled individuals. All of those categories are represented.

When we do business with these firms, we want it to be meaningful. There’s a process that we have through which every 18 months firms can apply to be in the program. We want to select a group of firms we can partner with in a meaningful way.

How did you get started in financial services?

When I was in high school, I knew I wanted to be in business. I went to a magnet high school where I got exposed to economics and accounting. I was fortunate. I then did my undergraduate studies at Florida A&M University’s School of Business & Industry, which is a tremendous program.

Dr. Sybil Mobley was dean of the business school. She was ahead of her time and gave us a lot of exposure early on to internships and relevant course work in business. To this day, I look fondly on her legacy, because I think the educational development that I got there positioned me well to move into my career. I did my last internship with Morgan Stanley, that’s where and when I got into financial services  formerly as an intern and then full time as an analyst.

I went on to do my MBA at the University of Chicago’s Booth School of Business, at which time I was a fellow of the Robert Toigo Foundation. Receiving the Toigo fellowship meant not only that you received financial support, you also became part of this large supportive network with mentors who are extraordinarily talented, and you met individuals of ethnically diverse backgrounds who were going into financial services. Early on in my career, this gave me an incredible foundation to have success going forward.

I’m a big supporter of all levels of education. For example, I spent eight years serving on the foundation board of Florida A&M and am still very much engaged with it through contact with the senior administration and members of both the trustee board and the foundation board.

What can financial advisors and others in the industry do to more vigorously support DE&I today?

First, at each level of my career at the three firms where I’ve worked  Morgan Stanley, Goldman Sachs and Northern Trust  wonderful people have invested in my career. Mentorship and sponsorship, which are different and complementary, and allyship, all of these are important.

Allies are your colleagues or friends that help you navigate the culture and access resources. Mentors bring a teaching relationship. They’re people who have knowledge, both in their heads and their hearts, and who  are important in enabling you to not only do well in terms of the technical aspects of your work, but just as importantly in navigating the culture. Often, particularly for people of diverse backgrounds, that can be the biggest challenge.

Sponsors are those who have influence in an organization and at the end of the day are “in the proverbial room.” At the right time, these people will speak up or affirm that you deserve a stretch opportunity. That’s so important.

Secondly, people make a difference in terms of attracting a diverse group of talent. One of the challenges we run into is that financial services firms have recruited at the same places and within the same network for some time.

If a firm starts out not being particularly diverse and continues to go to places where there’s a lack of diversity, where they’re drawn to their same network, this works against the team becoming more diverse.

People have to revisit their HR and in particular their talent management practices in terms of not only how they recruit, but also how they promote and develop people. They have to be very intentional about ensuring that they have diverse representation and the requisite level of support for talented, diverse partners. 

Lastly, you’ve got to really start at the top. I have been consistent in saying that firms serious about diversity need to have it represented in their senior leadership. And to the extent there’s a governance structure, they need to have diversity represented on their board.

If not, it’s hard to be credible in the marketplace, and it’s hard to attract talent if your senior leadership and your governance structure, including your board, are not diverse. It means you have to make a true commitment, so people can see in practice that diversity matters at the very top of the organization. It shows that not only are you committed to it, but there are people in the room that can bring diverse perspectives to the business.

These are the three things that are critically important if people and firms want to really advance diversity, equity and inclusion.

What’s your “big picture” view on how DE&I is going in financial services? 

We have a lot of work to do. I have guarded optimism informed by my experience. 

I work for a wonderful firm. When I joined the asset management executive team 13 years ago, we had 16 professionals on it. I was the only person of color at that time, and we didn’t have any women. But the leader, who was relatively new in the role, began the process of diversifying our team.

Today we have one of the most diverse teams in asset management globally. Five of my nine direct reports are women.

Overall, two thirds of our 17-person executive team are either ethnic minorities or women. That tells me by being intentional it can be done. We got there on purpose.

As for the broader industry, we have to push past the conversations about all the reasons we can’t find the diverse professionals we want. This is an incredible industry with people who are exceptionally bright and are incredible problem solvers. 

With respect to greater diversity in the industry, this isn’t a problem  it’s actually an incredible opportunity. The question is, and it’s a hard issue, do we have the passion and the purpose around it? The dialogue has evolved in a positive way, but … for the numbers to improve we have to be committed to doing the work in order to get the right outcome.

What do you see as the relationship between DE&I and environmental, social and governance (ESG) investing? 

There is an intersection there, and that’s interesting for firms in the asset management business. If you look at Northern Trust Asset Management, we’re one of the leaders globally in sustainable investing. For three decades we’ve been integrating criteria that measures environmental, social and governance factors in our investment decision-making.

There is a correlation between that and our commitment to social responsibility. These efforts reinforce one another within an organization. You have to be very explicit, as we’ve done with the values outlined for our asset management business. It’s one of the things that I emphasize with my leadership team.

Our shared values of passion, competence, curiosity, diversity and humility help shape our culture. And the resulting actions go part and parcel with the kind of culture that is highly committed to doing the right things.