he legislation builds off a provision in the Housing and Economic Recovery Act of 2008 (Pub. L. 110-289) which established Offi ces of Minority and Women Inclusion (OMWIs) at Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. Section 342 of Dodd-Frank was proposed by Congresswoman Maxine Waters (D-CA) in response to her scrutiny that “women and minorities are underrepresented in government positions related to the fi nancial services sector.1
”
LEGISLATION POINTS T e OMWI provision mandates each covered governmen- tal agency—including the Treasury, the Federal Deposit Insurance Corporation, the Offi ce of the Comptroller of the Currency, the Securities Exchange Commission, and Federal Reserve Banks—to establish an Offi ce of Minority and Women Inclusion that will be responsible for all matters of the agency relating to diversity in management, employment, and business activities. T e agency administrator will appoint a senior executive-
38
level director for each individual OMWI, who will then establish standards for equal employment opportunity, workforce diversity, and increased participation of minority- owned and women-owned businesses in the programs and contracts of the agency. T e director will assess the diversity policies and practices of entities regulated by the agency as well as companies that provide contract work. (OMWI responsibilities do not include enforcement of statutes, regu- lations, or executive orders pertaining to civil rights.)
CORPORATE LEAD In recent years, corporations in America have taken signifi cant steps to promote diversity and inclusiveness. Diversity initiatives are found at both large and small corporations. Many organizations have diversity direc- tors and diversity committees to ensure that the pool of applicants is more diverse, minorities and women have opportunities for promotion and advancement, and the companies with whom they do business have high diversity standards. Section 342 may be following their lead. “Corporate
America is out in the forefront on the issue of diversity and inclusiveness,” says Daryl A. “Sandy” Chamblee, partner at Steptoe & Johnson LLP and the fi rm’s chief diversity partner. “T ey represent a useful example for many diff er- ent organizations and sectors to follow to try to ensure that workplaces are diverse and inclusive.” In addition to the establishment and policy-making
“ CORPORATE AMERICA IS OUT IN THE FOREFRONT ON THE ISSUE OF DIVERSITY AND INCLUSIVENESS.”– SANDY CHAMBLEE
If the director of an OMWI determines that a contrac-
tor or subcontractor does not meet its diversity standards and has not made a good-faith eff ort to include women and minorities in its workforce, he or she is required to recom- mend that the contract be terminated, at which point the decision will be handed over to the agency administrator, who will either terminate the contract, make a referral to the Offi ce of Federal Contract Compliance Programs (OFCCP) or take other appropriate action. Because the legislation applies not only to regulated agencies but also their contractors, it will impact a large
DIVERSITY & THE BAR® MARCH/APRIL 2011
of OMWI offi ces, the legislation requires each covered agency to take steps to seek diversity in its workforce at all levels, including recruiting at historically black colleges and universities (HBCUs), Hispanic- serving institutions, and women’s colleges. Further, it requires each agency to sponsor and recruit at job fairs in urban communities, advertise employment in newspapers and maga- zines targeting minorities and women, partner with organizations that promote minorities and women, partner with inner-city and girls’ high schools to establish or enhance fi nancial literacy programs, and provide mentoring and related mass media communications (Sec. 342(f)). Many
of these requirements are already in place at organizations outside the fi nancial services industry.
OPPORTUNITIES IN SCALE Chamblee explains that this legislation appears to articulate the desire to make sure diversity exists in the senior levels of management and the business activities of the organiza- tion, which makes the commitment to diversity broader and more important. “It’s not enough to have a certain number of female or ethnically and racially diverse bodies in seats. It’s important what those seats are,” she says.
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array of companies, including fi nancial institutions, investment banking fi rms, mortgage banking fi rms, asset management fi rms, brokers, dealers, fi nancial services enti- ties, underwriters, accountants, investment consultants, and providers of legal services. Each OMWI was scheduled to be established in January
2011, but budget constraints have caused several agencies to postpone creation of the offi ce and hiring of a director. Many agree that it could be a year or more before we see the impact of this potentially far-reaching legislation.
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