JPMC-Brian Lamb - Diversity

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Brian, thanks for joining me today. I'm looking forward to our conversation so thank you so much for making the time

Karen, great to be here, good to see you. All right, let's start this way. Last April when Gordon Smith announced your appointment as JPMorgan's global head of Diversity, equity, and inclusion, he said that building a future where all employees and customers feel welcome is a business imperative. So to start us off, what are you doing to implement that vision?

Sure. Well, Karen, as I reflect on that announcement, we didn't have the foresight of what we were going to really get into in 2020. It was a very challenging year. And I think what Gordon was mentioning and how I think about it and what we've put in place, is really a business led approach to diversity, equity, and inclusion. What that means is we have clear objectives and priorities. That really ladder into our purpose, which is to help employees, and customers, and clients and communities grow and thrive without leaving anyone behind.

And like other businesses, there are key elements to that, that we need to have in place. That was an improvement from where we were before, which is metrics. That we really can point to tracking our progress, and in the commitments that we've made to our stakeholders and the element of transparency and accountability. All of which, really I think, help us execute at a level that is the same standard of JPMorgan Chase being the best financial institution in the world. There should be no different standard in the commitment and a level of performance around diversity, equity, and inclusion.

So Brian what are those metrics?

When you think about metrics in a couple of way. So first, around representation. We are always thinking about how do we create equitable opportunities for our own employees? It's an inside out type of approach, meaning inside the firm. We need to do the right thing to help advance our employees and create an environment that is inclusive. Where they can grow and thrive.

Those metrics look like not only representation metrics, but how do we measure inclusion? How do we get at what sometimes can evade corporations and understanding the sentiment of employees feeling like they belong. So we have metrics and predictive analytics that allow us to think about what employees are feeling, what they expect from the firm, where we have opportunities for improvement, and how we hold managers accountable to really drive those outcomes.

We also look at metrics that impact our clients and our communities. We announced a $30 billion racial equity commitment, which has significant detail around our impact around housing, and home ownership, affordable housing, small business. What we're doing to really create opportunities for Black financial institutions, and Hispanic, and Latin financial institutions. Lots of metrics that ultimately will guide us in our path forward, that we ultimately want to use to track our progress and ensure that we're having the intended impact.

Can we dig into those areas in just a little bit more detail?

Sure.

Specifically, what kinds of programs are you enabling, and what are some of the short term impacts that you plan to see or would like to see as a result of putting those programs in place and putting the money behind them?

Yeah, absolutely. Let's take a few of those and pull the racial equity commitment apart and localize it. Let's first talk, maybe about what we're doing around home ownership and affordable housing. Of our racial equity commitment, our $30 billion do really push that down a significant part of it. Speaks to what we all know is a home ownership racial wealth gap. If you think about the home ownership rates today for the black community and, you lay those next to home ownership rates in the White community, that gap is wider Karen, today than it was in the 60s. And so we clearly have work to do. And we as a financial institution frankly have a responsibility.

So now let's think about how we create more opportunities around home ownership particularly in majority-minority communities. How are we providing low cost solutions and products around mortgage in those markets? So we set up working with community partners around the country. Investments that we were willing to make, whether it be grants, hiring loan advisors and markets that quite frankly had historically been under-served, building branches in these very same communities and community centers that allow our stakeholders, partners, and influencers to congregate in fellowship, to help homeowners or potential homeowners have that conversation. And so that is just a tangible example of the work that we're doing around the country.

Let me give you one more. Let's think about supplier diversity. It's been around for decades. But how do we bend the curve around some diversity? How do we create pathways for businesses to do business with JPMorgan Chase, looking at the traditional headwinds that are there? Maybe it's related to cyber or expanding capacity. Or maybe it's related to the speed at which we need contracts executed. How do we make sure that we remove those headwinds for small businesses so we set up strategies to onboard businesses, black and Latino businesses into our program? So that we could spend approximately $750 million of our own money with Black and Latin companies over the next five years?

And we're challenging our partners, our suppliers are the Fortune 500 suppliers to have the same standard of excellence. So imagine the multiplier effect Karen, when we're able to do that and get other large companies to take the same intentional approach to creating pathways to spend money with business.

Well, the other multiplier effect is the impact on communities and cities. And measuring the economic health of the areas that are benefiting from the investments that you're making. And frankly the role that you are taking with business in those communities. Can you talk a little bit about the public private partnerships that may be coming about as a result of what you're doing and the impact to the cities and the local communities?

Absolutely. One of the measures of success is clearly around the prosperity of these communities that we're focusing on. There's no doubt that we're prioritizing certain cities that have the key elements that we want to address. They're majority-minority in some cases, they really have home ownership rates or access to capital raise M well below where they should be. But from a public private partnership, we also, even though we didn't lead with philanthropy.

Philanthropy is a companion solution to everything that we're describing. Policy is also the other companion solution. So how do we get our colleagues in our elected officials at a federal level and a state level to think about legislation that could help accelerate the investments that we're trying to make? So we made recommendations, for example, around home ownership. And some of the servicing and other policies around FHA, around servicing homeowner residential mortgage. How do we create an environment where financial institutions are further incentivized? To make sure they're creating the opportunities around home ownership. So policy-making is important.

Second chance is another example. What do I mean by second chance this is individuals that have been incarcerated, but are now ready to get reengaged in reemployed in the workforce. How do we find pathways and work with partners, public and private, to create entrees for these individuals? To give back into the workforce and saw the need, quite frankly, that we have around labor? So the second chance initiatives, the policies around home ownership, the investments that we're making, for example, in financial services.

I want you to think about Black banks and Latin banks. We've seen a lot of deterioration Karen, over the years where we've lost a lot of those institutions that are serving these very communities that have been left behind. So what if we were able to design investments into those black banks that could create capacity? For every $10 million we invest in one of those banks, it's an 8 to 10 multiplier on the capital. That they then can ultimately provide in those local communities.

But we're also bringing product Karen, to the table. Where we were able to create a money market share class, that gives black institutions a chance to participate in asset management or large institutional investors can put money to work in the black financial institutions can benefit from that and generate revenue that they ultimately can redeploy to hire talent, marketing, or create products and services that help scale their institutions. So these are the types of things that we're doing to partner and create opportunities that historically just weren't on the table.

What about the work that you're doing to provide more accessibility to lower cost banking services? I know as the former head of retail banking, that must be near and dear to you. What kind of impact are you seeing? And what are those programs, how are they how are they actually working?

Absolutely. So look, when you think about the marketplace whether it's unbanked or under banked, there is clearly pent up demand around providing local solutions to banking and convenient solutions to banking. Either through digital or in local markets that frankly, just haven't had the best distribution that they should. So we look at some of our secure banking products specifically, for example. The secure banking products are intended and designed, to help the bank or the unbanked be able to enter into the banking financial services industry in a very low cost. These are solutions that are designed in such a way where those that don't maybe have as complex financial needs. Maybe it's a lot more about providing access and very quick access to their funds.

Every day, every week matters in some cases Karen, when you think about the lives of some of these neighborhoods some of these families. So how do we create a secured banking product that helps them build their credit, provides easy and fast access to their phones, allows them to do that digitally, or in person in a branch, and also provides access to financial advice. Many of the families and individuals that we talk to small businesses and consumers.

Karen, at the end of the day, they also are needing help to make sound financial decisions. So how do we create that on trade in an easy way for their kids, all the way up to professionals and those even looking to retire? That continuum is built into the products and services that we're looking to provide in these communities.

Brian, who inspires you?

Well, I tell you what Karen, if I reflect back on my family and my father was a schoolteacher his whole life. And I watched him basically become a public servant. And the way that I reflect on that is I think that is a big reason I'm so inspired to make a difference and live with purpose. It's a big reason I joined JPMorgan Chase, and a big reason I lean in really heavily in the role that I'm in today is really where we are focused on being purposeful. I think that is what inspires me, is to see the life that we can impact of change.

And Karen, in the way I think about it is generational impact. Well, you and I are doing today, the conversation we're having the work that we're doing, the impact, yes. We'd like to see immediate results. But there's a very important consideration here that we also have to be willing to realize that we're setting up the next generation to be more successful, to have better opportunities, to live a great quality of life and be incredibly productive citizens in society globally.

So if you've got that thought process and you look at the now, the near and the far around how we make investments. That's what gets me fired up and excited and I'm proud to be able to do that at JPMorgan. I'm proud to work with the folks that I have a chance to work with every day. And hopefully, we are able to see this impact show up for our clients and our communities.

I think you make a good point that for many of these problems, there isn't a quick fix. It does require investment over time. And to your point earlier, metrics that enable you to evaluate progress and make course corrections to enable the next generation to have a better opportunity. But those seeds need to be planted in a very purposeful way today.

I mean, Karen you're spot on. And in the business world, we're always like you know grasping for those immediate results. And there's a part of that, it's good, it's healthy. It gives you that sense of urgency to drive change. We also want to make sure it's sustainable.

Right.

There's a very important consideration that we can't lose sight of which is we don't want to go backwards. We don't want to have some very tragic issues that we were able to see in the summer of last year. We don't need that to be a catalyst for change. We can create our own positive change that's sustainable if we take a short term view on making sure we're having immediate impact, but a long term view with the realization that the next generation should be better off, better prepared, and better positioned to have the opportunities that, in some cases, those before them did not have.

Right. How do you systematically get input from all the various stakeholders that these initiative touch, to make sure that you really are on the right course and course correcting one course correcting needs to happen?

So that's really a key part of our path forward. Before we launched our $30 billion racial equity commitment, we sat down with hundreds of partners and stakeholders outside the firm, not to mention the hundreds of employees that helped design the strategy. Whether it was civil rights groups, consumer advocacy, human rights. We really slowed down at a national level with key partners, many of which we had longstanding relationships, some of which we formed earlier anew because we wanted their input and local organizations. I think that's important here, Karen.

In many cases, you've got to be careful building national strategies if you want to impact the local community. So we went to cities, key cities that had the make up and the design and elements of what we were trying to address to listen, and learn, and build that into the products and services.

I'll give you a specific quick example. We went to Chicago to listen in that marketplace where we know home ownership rates are not where they need to be. We were able to hear from partners and help design a special purpose credit product, that allowed us to scale it nationally, to create more access to home ownership and grants that we ultimately were able to invest in majority-minority communities that we believe is going to accelerate the amount of homeowners that are Black or Hispanic or live in these majority-minority communities.

And that design-- the fingerprints of that design include partners that sat in the local markets that gave us direct feedback on the type of impact they were looking for. Brian, you talk about the multiplier effect. And I'm curious to get your thoughts on how everyone can participate in the vision that you've set out. Not everyone has JPMorgan Chase's capital and resources, but certainly everyone wants to be part of the solution. What's your advice?

Yeah so a couple of stakeholders to touch on. First, if you are an employee at JPMorgan Chase, there's so much you can do to engage. Including making sure that you're creating the right environment and being an advocate and an ally for the very communities that we're trying to serve and we talk a lot about that inside the firm. Outside the firm partners, community leaders a couple of things to think about.

Number one is leverage the data that you have that provides the insights on really the job to be done. Maybe it's about small business lending and access to capital, maybe it's home ownership, s maybe a second chance, maybe it's broader than that and it's education, closing the education achievement gap for diverse, for women, for Hispanics, for Asian relative to their colleagues that are in the White community. Find the problem that you can lock your arms around, and be willing to pull together colleagues and partners to help you tackle that task.

A specific thing that I think people can do today, not just JPMorgan Chase, is identify one or two things in your community that you believe over the next 3, 5, 10 years that you can bend the curve and change the experience for the next generation. Identify it, prioritize it, and bake it into your business. The way that you make decisions, the way that you build your strategies, the way you allocate capital should be tied to having impact on whatever you prioritize that you want to make a difference around. And that's just a little bit of how we've approached it.

But I do think it requires intentional focus on where you can make a difference. It's a financial institution, we obviously know that we need to make a difference around access to capital, home ownership, creating more entrepreneurs that can build businesses and create jobs. There are things that we are built to do. Other companies have the same types of attributes that they can identify. What is their value proposition to advancing racial equality and creating equitable opportunities?

Inspiring advice. Thank you, Brian. I've enjoyed the conversation. Thanks for your time.

Karen, thank you for having me. Great to see you.

Bye now.

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