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General counsel at the Bank of New York – Mellon discusses the use of quotas, the #MeToo movement, and increasing opportunities.

Kevin McCarthy is in a powerful position, and he is all too aware of that. McCarthy, general counsel at the Bank of New York – Mellon, describes his role as sometimes being “more complicated than running the legal department.” Among other responsibilities, it involves advising the board of directors, meeting regulators and helping colleagues within the bank to solve their issues, he says.

But another critical aspect of his portfolio is to ensure there is diversity in his own department and those of others. There is a real benefit of having a diverse workforce, McCarthy believes. It makes companies better.

“Corporations, particularly public corporations have to reflect the communities and the ecosystems which they operate. Your customers are diverse, you are located in a diversity of geography. So, in order to be successful and competitive and attract and retain the best talent, you need to look like and act like and think like all of those various voices, and that is why having a diverse workforce, diversity of thought, diversity of gender, diversity of ethnicity, [and] diversity of experience all comes together to make companies better.”

The #MeToo movement that has exposed cases of sexual impropriety in the workplace has put the lack of diversity in many companies under the spotlight. For McCarthy, the movement has not only exposed “shameful” instances of sexual abuse by those in power in all industries, it also shows “what happens when power is concentrated, and people are excluded and when you have a cadre of powerful white men who have been running industries and businesses for a long time with no accountability.”

McCarthy adds, “Unfortunately it is not surprising to see that that [unchecked] power is going to be abused and people who don’t have the power, which women are very often in these situations, become the victims.”

But how can this change?

McCarthy says having more women in senior positions, in boardrooms, at the helm of affairs running companies will “[help] shift the power dynamic, and some of this stupidity and shameful behavior will necessarily really go away because it will be a different set of circumstances.” He also believes quotas, as used in countries such as Norway and Germany, have been “very, very effective” in achieving gender diversity on boards. The reason is simple: “they are very clear, they are very binary; you have got to get x amount of women or minorities by this period of time, and if you don’t, there will be sanctions.”

But he is well aware that in some other countries such as his native United States, government-mandated quotas might face some resistance. For tips on how to still strive for diversity without quotas, McCarthy recommends hiring managers to ditch rigid attributes all job applicants should possess. McCarthy says “you are going to miss the opportunity to pull more diverse people into that pool. Because the reality is not everyone is going to check those boxes and the folks that do check all of those boxes probably are not going to be representative of the broader whole.

“What I have done and what I advise folks in our company to do is to really think hard when you are creating the framework specifications in roles and responsibilities to be more flexible to enable you to create a broader pool to pull from.”

Another tip put forward by McCarthy is for managers to engage with groups and associations that will expose them to a range of constituencies for job applications.

McCarthy says an internship program and a track record of hiring and retaining diverse staff will “create its own buzz, its own story about you. So when university graduates are looking for places to go, they can look at your company and see that you have actually made the effort, that you actually have been visible to them and that makes you a more welcoming employer and the odds of [attracting diverse job applicants] are going to go up and up.”

Kevin McCarthy was a participant at the Salzburg Global program Brave New World: How Can Corporate Governance Adapt?, which is part of the multi-year series, the Salzburg Global Corporate Governance Forum. The program was held in partnership with Shearman & Sterling LLP and CLP Group. It was sponsored by Bank of America, Barclays, BNY Mellon, Elliott, Goldman Sachs, and Microsoft. More information on the program can be found here.