Shundrawn A. Thomas, president of Northern Trust Asset Management, spoke with Pensions & Investments on June 8 about his thesis that, in the wake of the COVID-19 pandemic and recent killings of black Americans and subsequent protests, U.S. business leaders must meaningfully address and help to change racial, economic and societal inequalities in the country.
NTAM had $914 billion in assets under management as of March 31.
The conversation was edited for clarity and space.
P&I: What prompted you to write your open letter to civic and business leaders regarding their response to the COVID-19 pandemic?
Shundrawn Thomas: What I began to have a sense of even early on (during the COVID-19 pandemic) was that we were going to be in this period — this new normal — in some fashion for an extended period of time.
What was really weighing on me was the fact that this crisis — every crisis is different, there are some things that rhyme — but even when I think about past crises, like the most recent financial crisis, as stressful as that environment is, you go home, right? And when you go home from work, you have some sense of normality. Not so in this crisis ... because it's a health and humanitarian crisis.
So I'm thinking we've got this period that's causing stress at work. And this crisis affects people 24-7, we're separated from each other, we can't even have the same level of interaction, including the emotional support.
So I already had a sense of concern about how this would affect people mentally and emotionally, and then as it went on, I just began to observe different things in the broader environment that suggested to me something that absolutely had to be amplified was the sense of how we should lead and what I would describe as leading compassionately.
So it was those things working together that just really encouraged me that here's a perspective I can share (and) hopefully, it would resonate with other business and civic leaders.
P&I: What was the reaction to your open letter after posting it on LinkedIn in mid-May?
ST: What was interesting is (that) there was a very meaningful response to it. There were over several thousand views of the article.
I think what struck me (was when) I realized that there was a core there that had really been touched. Beyond the LinkedIn (post), I started getting personal contacts or emails from people I didn't know. (This) at least suggested to me that there was a chord that was struck in terms of how others are thinking about how they want to show up in this period and how they can think about the engagement and the leadership they demonstrate.
P&I: What is your vision for racial, economic and societal equality in the U.S.?
ST: The first thing I would hope for is advancing to a place where we can give ourselves the place and the grace to see people for who they really are. The second speaks to something I've talked about a lot lately, especially as we're in the midst of this situation where we're dealing with these tough issues around race, because one of the things that perpetuates it is the silence on all sides. We don't talk about it.
So the reality — this is not just true on race, it's also true on gender and it's true in a lot of different ways — is that we are so accustomed, particularly in companies, to conforming to a normative standard. That normative standard in most instances — and I say this in no prejudiced way, (it's) just true — is more of a white normative standard.
Most people live in communities that are monolithic. They wake up and are surrounded every day by people who look like them that went to the same schools and so forth and so on. And it's no wonder then (that) it's such a struggle for us to move beyond those things.
So we have to just expand, right? We don't have to diminish that. We just have to expand in a sense the subset of themes that we include in what "is normal" if we can push ourselves. A lot of that comes through dialogue and sometimes it's initially tough. Then the second part is beyond dialogue, just experiential.
I think if we can do that, I think what would be a natural outgrowth of that is we would then begin to see true equity. It doesn't mean that we need to disadvantage someone else to advantage another person. It means this simple last statement — that we actually achieve the ideal in this country of making opportunity equal.
I can't guarantee (that) everybody has an equal outcome, but I'd like to believe and I'd like to see a closer representation of this sometime in my lifetime, that opportunity is actual for people. And the thing that troubles me the most about where we are for such a great nation, we can't say that opportunity is actually equal.
We have too much evidence, whether it be based on what we see (including inequitable pay based on) gender or racial discrimination and hiring practices or different things like that, we just have too much empirical evidence and anecdotal evidence to know that that's not true.
P&I: When it comes to institutional investors and how they're viewing their managers, are issues about race and equality rising to a new level in their assessment?
ST: Here's the reality. Of the many issues we talk about, for sure one of the most sensitive and in a sense most avoided issues in a work context (is) issues around race.
What I've seen in the most recent weeks is probably in my entire career the strongest leaning in in terms of ... a real openness — not a veneer — around conversations around race.
In our industry ... there (are) some places where you've heard a little more of the conversation. So think about, for instance, if you're in the public fund space and a lot of your constituency may be diverse by virtue of who you're investing the money for.
If we're interacting with those organizations, they're at least on some level asking us about our diverse use of managers for suppliers and things like that. To be frank ... of the ... trillion dollars in assets that we manage, in most instances, the people that we manage money for aren't really pressing us or historically haven't about the diversity of our workforce.
But frankly, it's rare that I walk into a meeting with any institutional investor (in which) they actually ask us any meaningful questions about diversity.
Again, I would call out the public fund space as a bit of an exception in that regard, but I'm just speaking honestly, to your question.
P&I: How is Northern Trust increasing diversity internally?
ST: I'm going to give you some perspective on that, but I don't want to offer it from the perspective that we have this all figured out or that we've done everything we can or believe that we should do.
I start with the executive management group of the corporation and then those people (who) report to (the) CEO of the corporation, Michael Grady. If you went back 15 or 20 years ago, we didn't have a lot of diversity at either the highest executive level or the board.
We have made movement at the top. When I first joined the asset management executive team (in 2008) that I now have the privilege of leading, we had 16 members of the team. I was the only person that was of a diverse background, and there were no women on the team. Today, we have 15 people on our asset management executive team, nine of whom are either women and/or ethnic minorities.
When I look throughout the organization, there are plenty of areas where I firmly believe we need to have more diversity and create more paths for opportunity.
One of the reasons I show up passionate about work at Northern Trust every day is because whether I see what we've done with the management group and some of the diversity and the actions in there, whether I see our commitment to being a part of the success of our community or what we're doing in areas like sustainable investing, it makes me believe that if I'm spending most of my waking hours there, it's actually making a difference.