Richmond Fed’s Extra Diversity Push Falls Short in Top Job Hunt

The Federal Reserve Bank of Richmond’s efforts in 2017 to broaden the field of candidates for their vacant president’s post by consulting with community groups were “essential” but produced “minimal direct results,” according to correspondence between Fed officials.

Under pressure from activists to find a minority or woman president, the Richmond Fed’s board of directors, and the search firm they hired, reached out to more than 70 organizations “whose missions include a focus on diversity and inclusion” as they searched for qualified candidates, the letter showed. The document was released to Bloomberg News Friday under a Freedom of Information Act request.

“Though these efforts yielded minimal direct results, we believe they were essential to ensuring a context of comprehensiveness and inclusion against which to base the ultimate decision,” Margaret G. Lewis, chair of the Richmond board, wrote to then-Fed-Governor Jerome Powell in November 2017. Powell is now chairman of the U.S. central bank.

Lewis said the search firm Heidrick & Struggles interviewed 59 prospects, of which 19 were considered “high potential contenders.”

The Richmond board’s search committee then interviewed 14 finalists, including four women and six candidates who were “ethnically diverse,” before settling on Thomas Barkin, a senior executive at global consulting firm McKinsey & Co. who formerly served on the Atlanta’s Fed’s board of directors. He was approved unanimously by the non-bankers on the Richmond board on Nov. 20.

White Men

The central bank has been under fire from activist groups in recent years over the lack of diversity in the Fed’s leadership. Including regional presidents, who are appointed by regional directors, and Washington-based governors, who are selected by the U.S. president, six of the past seven appointments or nominations have been white men.

The single document released Friday came in response to a December request from Bloomberg for records related to the search and selection process under the U.S. Freedom of Information Act. Richmond Fed General Counsel Michelle H. Gluck replied to the request by claiming the Richmond Fed is not an agency subject to the act, and that many records covered by the request would qualify for exemptions under the act.

The letter summarizing the search timeline was produced, Gluck said, because “the Richmond Fed strives to be transparent in its operations.”

Lewis has declined multiple requests for an interview to discuss the search and selection.

The letter also listed three top reasons why some “highly attractive prospects” withdrew before and after interviews. They were “the sheer complexity of the role,” the Richmond, Virginia, location and “the perception on the part of some prospects about the limitations imposed on the next bank president by the current political climate.”

Richmond Fed spokesman Jim Strader declined to comment beyond the content of the letter.

Lewis said she and other directors picked Barkin, among several reasons, for his “outstanding 30-plus year track record of executive leadership,” his experience in leading a large staff, his “new perspective on a variety of issues relevant to matrixed organizations,” exceptional academic credentials including deep focus on economics, and for his experience at the Atlanta Fed.

Regional Fed presidents serve on the Federal Open Market Committee, which sets U.S. interest rates. Barkin is a voting member this year.