The Value Gap is a MarketWatch Q&A series with business leaders, academics, authors, policymakers and activists on reducing racial and social inequalities.
But as a Black woman and a powerful investment banker, she has been doing exactly that, ever since a dinner with the late Muriel “Mickie” Siebert in 1996 ended with the two co-founding what is now Siebert Williams Shank, a broker-dealer and top underwriter of equity and debt financing, which also is women- and minority-owned.
After an unconventional start designing nuclear submarines, Shank spent nearly a decade working her way up on Wall Street. Ultimately, she set her sights on building Siebert Williams Shank — not as a place for women and people of color to have a peripheral seat in the world of high finance, but for them to start calling the shots.
“I felt if we didn’t do it, who would?” she said.
Shank, the firm’s chief executive and president, recently talked with MarketWatch for The Value Gap about her journey to the top of Wall Street, including her recent work helping Fortune 500 companies
look inward at injustices that can act as a barrier to financial, social and career success, and ensure their workplaces are diverse, equitable and inclusive.
“It really starts with a CEO,” Shank said. “The CEO has to set the tone and then everybody from the bottom up has to be accountable.”
The conversation has been lightly edited and condensed for clarity:
MarketWatch: I was interested to see in your engineering background with General Dynamics
that you helped build nuclear submarines for the U.S. Navy. How did you go from there to co-founding a broker-dealer with Muriel Siebert, the first woman to ever hold a seat on the New York Stock Exchange?
Shank: It’s not the normal career path to Wall Street. I attended Georgia Tech. I am very proud to be a graduate of their engineering program, which is very rigorous. I ended up working with General Dynamics on the electric boat division, which is the one that designed submarines, the Trident in particular. I had the fortune of going to Groton, Conn., and actually walking on submarines a few times, which was quite interesting.
But I decided to move up the corporate ladder at General Dynamics, and for that I needed my MBA. I applied to Harvard, Columbia, Wharton, and chose Wharton over Harvard and Columbia because of its analytic focus. It was there that I became aware of the wide array of finance professions that existed. I really did not have any real knowledge of what Wall Street was. But my peers were all trying to get these hot jobs on Wall Street. I decided to give it a shot as well. Nine years in [in 1996], I was approached by Muriel Siebert to help found a firm that would be wholly owned by women and minorities.
When Mickie Siebert, the first woman to own a seat on the New York Stock Exchange, a real icon and trailblazer for all women on Wall Street, approaches you, you think very seriously about it.
She and Napoleon Brandford proposed that I’d be president and CEO from the start. Really, at dinner at the Post House [a former Upper East Side steakhouse], we decided to form a firm. We left the next day. Because of the strength of our relationships, we brought our first lead-managed deal the very first week of our operations [a municipal bond deal for Prince George’s County, Maryland]. And we were off and running from there.
“‘There is one reason firms like ours have been able to hire such great talent, too — because we reflect America. They feel we have a path to get to the top. ‘”
MarketWatch: SWS is now 25 years old. Did you set out to change Wall Street?
Shank: I deem myself to be a technician. I’m the type of banker who keeps my head down and works on each deal, because I think each deal is the window to a new deal, or can strengthen the relationship with a client. But I must say I was aware of the lack of diversity on Wall Street. The idea of a firm wholly owned by women and minorities that is high performing and competing head-to-head with the larger bulge-bracket firms was very appealing to me. Because I felt, if we didn’t do it, who would?
I would say our unique standing on Wall Street quite frankly provided inspiration for other firms to be founded. We also have a very diverse workforce and, as I’m sure you know, Wall Street did not have a good reputation in that area. It’s definitely improving, but we don’t see people of color and women in enough senior leadership roles. I think when firms engage with us, it’s really helping diversity on Wall Street.
MarketWatch: That is a good segue to my next question. When you partner with companies like Verizon
on bond deals to promote better environmental, social and governance (ESG) outcomes, how does it specifically advance diversity, equity and inclusion objectives? [Editor’s note: Verizon’s green bond program has been elevating transparency on Wall Street about how its funds are spent, while also hiring minority- and women-owned firms to lead these bond offerings. Continuing this trend, Allstate
and John Deere Capital Corp
recently also completed minority-led financing of corporate bond deals.]
Shank: Verizon has really been a leader in this space. They understand that by putting our firm in a joint bookrunner role that it does so much to advance our growth and deepen our relationship with investors.
We have a couple sets of clients. We have the issuer side: the major corporations, the municipalities, etc. But we also have deep relationships with investors. When we are a joint bookrunner, or the lead manager, we have access to products [like bonds and initial stock offerings]. We’re on a level playing field. That allows us to attract better talent when we’re hiring, because we have those opportunities. It really changes the game.
MarketWatch: How are you advancing diversity, equity and inclusion internally at the firm?
Shank: It’s not just a paragraph or two in our corporate handbook. I have always been deeply engaged in this discussion prior to 2020, when it became much more popular to discuss. We did unconscious bias training years ago for our own team and staff. Over 55% of our employees are Black, Indigenous or people of color. We are about 32% women, which I’m always trying to improve. And we practice what we preach.
What that means is we partner with a lot of our corporate clients, including with respect to summer internships, to give exposure to this world of high finance to students who might not otherwise get it. We also don’t always hire at the traditional Ivy League schools.
We launched a new initiative last summer, when we hired maybe 10 interns, and then picked two interns that would go work with one of our West Coast-based partners the next summer. The goal is that one of our firms would hire them. It also gives students exposure both to investment banking and corporate treasury, which positions them better when they go back to school to interview.
Finance and treasury groups at many of our major corporations lack diversity, and they struggle with trying to find the talent. We’re trying to provide that bridge.
“‘Once the events following the killing of George Floyd, and the protests that occurred, the global conversation about the “S” in ESG really began.’”
We’re also talking to them about our own workforce to offer recommendations. I sit on the board of Spelman College [a historically Black liberal-arts college for women in Atlanta]. We have a couple other partners who are deeply engaged with Howard University. Often, when they’re looking for interns, we will connect them with the right people at those institutions so that they get access to talent from historically Black colleges.
MarketWatch: Would you say 2020 is the peg for a lot more corporate interest in saying now is the time to really act?
Shank: Oh, absolutely. Everyone was talking about environmental issues previously, but the social part was never really discussed. Once the events following the killing of George Floyd, and the protests that occurred, the global conversation about the “S” in ESG really began. We began to see an outpouring of support and interest in learning more about our firm and working with us.
MarketWatch: Can you talk more about your firm’s support for and loans to minority-owned businesses, especially as Black-owned businesses have had a tougher recovery from the pandemic?
Shank: Chris Williams, our chairman, had been in discussions with Microsoft Corporation
about how to invest or engage with minority-owned businesses. That conversation actually started in 2019. But certainly after the tragic murder of George Floyd, the discussion was amplified in this country and became much more robust.
Microsoft in 2020 came forward and said: We want to provide a $25 million seed investment in a fund, to invest in sustainable, minority-owned businesses with an emphasis on African-American-owned businesses that operate in, or serve, underserved markets. [The Clear Vision Impact Fund takes aim at closing the racial wealth gap by lending to businesses that otherwise lack capital to grow. Apple Inc.
Constellation Brands Inc.
and eBay Inc.
have been among the corporations contributing to the fund.]
Businesses owned by people of color are underrepresented in many sectors, and the barriers have existed for years. We were very excited about this — Microsoft not only made a seed investment, but helped raise funds from other entities. We made calls, they made calls, and we were able to attract $140 million.
These companies did not feel they had enough minority-owned businesses with whom to procure services. The goal is to provide capital for existing businesses that lack enough capital to grow to scale, but also to connect them with corporate partners who can help provide some mentorship and potential contracts. Because minority-owned businesses need revenue, at the end of the day. That has been our focus with respect to building our fund.
MarketWatch: Let’s talk a little bit about where Wall Street needs to do better. You talked about the difficulty in bringing the numbers up for women.
Shank: The numbers aren’t bad for entry-level positions. They actually look pretty good, with women and men being hired pretty equally at the outset. But what happens is as you move within the organization, you’re seeing a lot of women and people of color not make it to the higher levels. We just need to do a lot more to support, through mentoring and providing a path for advancement. That means keeping the discussion alive, making sure every time you’re considering talent for any major position, you’re considering a diverse palette.
It really starts with a CEO. The CEO has to set the tone and then everybody from the bottom up has to be accountable. When minority candidates don’t feel embraced and supported, or see a path of advancement, it’s easy to be discouraged and to go elsewhere. There is one reason firms like ours have been able to hire such great talent, too — because we reflect America. They feel we have a path to get to the top.
But the real work is yet to be done. We see it throughout corporate America. We see it on Wall Street. I think we all have to be very intentional about making sure the numbers begin to change. Progress is not going to happen overnight, but certainly we should begin to see progress in the next three to five years, in terms of what leadership looks like.