The stereotypical image of a Ph.D. economist working in the Federal Reserve system, our nation’s central bank, might be of a man toiling away in a staid government office, surrounded by fellow number-crunching men. But the reality is that the Federal Reserve, a 103-year-old institution responsible for overseeing U.S. monetary policy, boasts a remarkable level of gender diversity that starts at the top with chair Janet Yellen and continues throughout its ranks.The system’s gender diversity far outperforms the S&P 500, for example, where representation of women in the leadership pipeline dwindles to only 5.8% at the CEO level. According to 2015 Equal Employment Opportunity filings, the representation of women in the nearly 2,700-person workforce of the Federal Reserve Board of Governors — the entity that oversees the Fed’s 12 regional banks — breaks down as:
- Executive Senior Level: 37%
- Senior Level Management: 43%
- First/Mid-Level Management: 55%
- Professionals: 45%
- Admin/Support Workers: 87%
Two of the 12 presidents of regional Federal Reserve banks are women: Esther L. George has led the Federal Reserve Bank of Kansas City since 2011, and Loretta Mester has served as president and CEO of the Federal Reserve Bank of Cleveland since 2014.
“What’s different here is that it’s not just a flavor of the day,” says Margie Wright-McGowan, who leads the Office of Diversity and Inclusion at theFederal Reserve Bank of Cleveland. “It’s not just about how many women you put in positions. … It’s a holistic approach as opposed to just having an initiative on diversity.”
Mester is actually the third woman to lead the Federal Reserve Bank of Cleveland of the 11 in its history. In 1982, Karen Horn became the first female president of a regional Federal Reserve bank when she assumed the role, and Mester was immediately preceded by Sandra Pianalto, who served from 2003 to 2014. Of the 941 employees in the Cleveland branch, 42.3% are women. Women comprise 38.5% of executive and senior level positions, and
42.3% of of first and mid-level officials.
“There’s no pressure from Dr. Mester that ‘let’s get these numbers on the board,’” says Wright-McGowan. “We start at the grassroots level, which in my opinion is the way to have success. If you start by focusing on diversity at the top of the house it doesn’t have the same impact. When you grow the talent, you create the pipeline, and the peer groups and networking naturally hap-pens.”
The secret to the Fed’s success starts in the hiring process, says Wright-McGowan. But it’s not just bringing in diverse candidates; her team also assembles panels of interviewers from diverse backgrounds, genders, ages and races. Also effective has been the Fed’s emphasis on succession planning for positions, “which allows you to think a couple of steps ahead as to where you can open up opportunities for development.”
“We also have a good mentoring culture,” she says. “We know that often when you bring in di-verse hires, if they don’t have a natural peer group, you don’t get the retention you want.” The Cleveland Fed’s resource network group known as WILD! (Women Inspiring Leadership and Development) has a membership of about 70 women and is just one of eight such groups — others provide networking for such groups as veterans, parents, young professionals, African-Americans and LGBT employees.
The Federal Reserve Bank of Cleveland was recognized this month as one of only eight regional organizations for Workforce Diversity by Cleveland’s Commission on Economic Inclusion. This year, it was also one of three of the Federal Reserve’s 12 regional banks to make the DiversityInc list of top 11 best regional companies for diversity — Atlanta (#5), Cleveland (#8) and St. Louis (#10). That list measures performance in advancing diversity in the talent pipeline, talent devel-opment initiatives, leadership accountability and supplier diversity.
“The more diverse thought we can get, the more diverse solutions we will have to our internal challenges,” says Wright-McGowan. “We are doing what we say we’re going to do.”