Sajid Javid is one of the five remaining candidates for the UK’s next prime minister. Britain’s first ethnic minority home secretary, Javid came to politics in 2010 after a glittering 20-year career in banking, which saw him working in Singapore and New York; becoming a VP at Chase Manhattan at the age of 25; and running Deutsche Bank’s global credit arm in Asia.
Speaking to journalists yesterday (June 17), Javid, who is the son of Pakistani immigrants, explained why he was initially drawn to the sector:
Most Asians…go into jobs that you need to take an exam for, like chartered accountant, dentist. It’s not because that’s what their parents think is the only thing open to them. The reason that happens, is because their parents feel that discrimination is so inevitable in professions where you don’t have to take exams, that the best way to get in is to have a piece of paper [showing you are qualified for the job]. So I did banking, because it’s much more meritocratic.
This idea—that all modern bankers care about is a facility for numbers and trades—is a common one. In a column last year for the FT (paywall), associate editor Janan Ganesh suggested that finance was the most meritocratic of all of the professions “that make up the urban establishment,” noting: “Bankers are not inherently meritocratic. It is the quantifiable nature of their work that forces them to be. Wherever performance can be measured, the scope to discriminate on other grounds rather dwindles, which is why there are few bigots or nepotists in charge of professional sports teams. The worst thing about banking is that it reduces humans to numbers. The best thing about banking is that it reduces humans to numbers.”
But is a career in banking as meritocratic as Javid and Ganesh describe? It’s difficult to say. In Britain, according to 2017 data from the FCA, a regulatory body, banking is somewhat diverse: around 21% of workers in the sector were from an ethnic minority, compared to 14% in the general population, with genders evenly represented. At higher levels, however, the number of white people—and especially men—proliferated. Just 4% of British funds are run exclusively by women, compared to 85% by men. And though black people make up about 3% of the British population, they constitute 1% of investment managers. (The US is similar, with white people making up 86% of asset management MDs, compared to about 77% of the general population.)
These data are borne out in a September 2018 report published by the London-based thinktank New Financial, which found widespread concern among fund managers that “the bar is set higher for women and people of diverse backgrounds.”
New Financial’s report identified what it described as a “meritocracy myth,” in which fund managers remained convinced that “the best will, and indeed do, rise to the top, based on the assumption that ‘merit’ is objective and neutral and that companies promote and reward purely based upon performance.” But workers in the sector questioned whether this assumption was correct. Over dozens of interviews, researchers found a common impression that women and people of “diverse backgrounds” were perceived to be “high risk.” One research analyst said that women were under special scrutiny, and required to be “consistently perfect.” Another reported that “men with mediocre performance continue to be promoted because they have stronger sponsorship.”
In his FT column, Ganesh contrasted banking favorably against other sectors like architecture, law, politics, and the media. But compared to other industries, banking appears either commensurate or only slightly more diverse. Around 20% of the UK’s lawyers are from British ethnic minorities, while 48% were women. Within Britain’s National Health Service, 42.9% of doctors and 38.6% of hospital consultants employed in England were from a minority ethnic background.
Other sectors were less promising. Across Britain’s five main television broadcasters, ethnic minority employees made up 12% of employees, with women accounting for 48% of employees. In architecture, 11% of employees were people of color, while women made up 21%.
Javid’s current role in British politics plunges him into one of Britain’s less diverse professions: women make up less than a third of all MPs, while around 8% of MPs are from non-white ethnic backgrounds. In his initial leadership pitch, he described how some of the racism he experienced on the trading floor—from “old-school bankers in old-school ties”—compared to the hostile resistance he had met from certain members of the Conservative party when he sought a career in Tory politics:
“After twenty years in business where I was the go-to guy for managing the trickiest multibillion-dollar international deals,” he said, “when I wanted to give something back to my country and looked for a place in the only party I had ever supported, there were those who told me it just wasn’t for me—or even that I should join Labour—because that’s what immigrants and their children are meant to do.”
Banking may not have the most illustrious history of race- and gender-blind meritocracy, and it’s readily accepted that the sector has a way to go. Compared to the Conservative party, however, which has never had a non-white leader, and currently has only 19 MPs of color out of 314, it’s not hard to see why Javid would sing its praises.