BlackRock: Diversity as a

Driver for Success

In July 2014, the Global Executive Committee (GEC) for BlackRock, the world’s largest asset manager,
held a two-day offsite to discuss the state of talent within the firm. A year prior, in 2013, Chairman and
CEO Laurence (Larry) Fink had asked Global Head of HR Jeff Smith to outline to the GEC the firm’s
Diversity and Inclusion efforts, benchmarking its progress against eight practices associated with
building more inclusive cultures (see Exhibit 1). At the July 2014 off-site, Smith and Kara Helander,
Global Head of Philanthropy and Diversity and Inclusion (D&I), provided a summary of the firm’s
journey to-date and an update on its progress (see Exhibit 2). The message from Fink at the July
meeting was clear: The firm needed to do more. This message was also reinforced by the Board who
wanted to see an increase in diversity in succession plans and leadership ranks. Smith and his team
needed to work with the GEC to lead the change. They needed to decide: What needed to be done next?
What were the key areas that needed the most improvement? What were the greatest challenges and
opportunities facing the firm, and how could D&I initiatives help address them? What actions needed to
be taken to meet the request from Fink and the Board?

History of BlackRock
BlackRock, Inc. was initially founded as Blackstone Financial Management in 1988 under the umbrella
of the private equity firm Blackstone Group.1 Blackstone Financial Management started as an eight-
person firm led by Larry Fink primarily involved in fixed-income asset management.2 In 1995, Fink and
the other founders (Robert Kapito, Susan Wagner, Barbara Novick, Ben Golub, Hugh Frater, Ralph
Schlosstein, and Keith Anderson) separated from Blackstone Group to establish an independent asset-
management company, which they had renamed BlackRock in 1992. Carol Loomis of Fortune said of
the founders, “They’d been Wall Streeters, at First Boston and Lehman. They were sell-side bond
experts, but not just any sell-side experts. They were inventors and traders of the complex asset-backed
instruments–like mortgage-backed securities-–then newly available. Fink’s transformative idea was that
the buy-side half of a trade needed help to understand these products. So his band re-created themselves
as asset managers.”3 Barbara Novick, co-founder, Vice Chairman, and member of BlackRock’s Global
Executive and Operating Committees, recalled the early days when she and the other founders decided
to set out with Fink and establish their own firm:

At First Boston, I worked on a strategic project for Larry where we looked at, over a three year period,
the market share of the different firms and what the trends in the industry were. First Boston and
Salomon had been the market leaders when I joined First Boston. In 1985, these two firms represented
85 percent of the market, and everybody else collectively divvied up the crumbs. When you did that
same analysis two and a half years later, what you found was there were now ten plus firms in the space.
Drexel had entered and Goldman and Merrill and on and on. Although the market itself had grown, there
was even market share across all of these players. Everybody had built a big team, so the margins were
getting skinnier and skinnier. You kind of looked at the trends and you said, ‘This really isn't
sustainable.’ I think myself as well as a number of other people who ended up forming BlackRock, we
all came to similar conclusions. This was a disturbing strategic study. We said, ‘Maybe it's time to move
on.’ First Boston itself was going through a lot of change, and we were doing layoffs for the first time in
our history.

It was just the right time to look around, and then one day Larry came in and quit. Anybody who was
already thinking about these issues couldn't help notice that Larry quit. He quit for his own set of
reasons, but he had this idea that he would start a buy side firm, and he reached out to some people. We
ended up getting together and starting BlackRock, which was not the expected outcome a few months
before that. We were a dot-com before there were dot-coms. You take a group of people with real
experience on Wall Street with some ideas, some of them a little hair-brained, and you put the right
people on the bus and drive it around the block and decide where to go. That's what we did. We had a
great group of people, and we had enough confidence that we'd figure it out together, and we were in it
together. Even though it was a dot-com kind of risk, the downside was you could go back to your old
firm, or you go back to the Street. You could find another job—it wasn't like you'd be unemployed.
Even in the early days of the firm, diversity was something the founders realized would be important.
Rob Kapito, co-founder, President, member of the Global Executive Committee and Chairman of the
Global Operating Committee, recalled wanting to learn about diversity from other leaders who seemed
to manage diversity well:
We wanted to learn from best in class. So, I went to GE because diversity was something that was very
important to them. I sat down and asked them how to do it and I listened. I realized that you really have
to have programs with goals and guidelines and hold people 100 percent accountable for those goals. It
was either '90 or '91, so probably two or three years into the start of BlackRock. That's when Jack Welch
was there, and there was excitement about GE having the best in many of these types of programs.
In 1995, BlackRock was purchased by The PNC Financial Services Group and became a subsidiary of
this bank holding company. Co-founder and former Vice Chairman and Chief Operating Officer Sue
Wagner talked about the significance of this deal in the firm’s early history:

We chose PNC as the buyer, which was not the highest bid, but we chose them because we really
believed in our potential, and the way they ran their company at the time was basically as a portfolio of
businesses. They had an office of the chairman that oversaw the portfolio of businesses, and they were
comfortable to say to us, ‘We’re not going to fix what isn’t broken. We’re bringing you in to be our
bond manager. We want you to consolidate all the activities from lots of bank mergers. We want you to
run with it.’ When we looked at the whites of their eyes, we believed it, and we did well, too, so that
helped. I can’t say if they would have been as hands-off if we had done poorly, but when we look back
over all those years, they lived up to every promise in terms of enabling us to reinvest in the business,
letting us run the business, and really empowering us to build it. So that was an extremely important
milestone in the history of the firm.

In late ’96, PNC asked us to oversee their money market business, and then in ’97, they asked us if we
would be willing to restructure all of the other asset managers they owned under one umbrella. We were
actually sort of cautious about that because we were afraid it was going to take our eye off the ball, and
we’re bond geeks, so what did we really know about running an equity business? They had three equity
managers that were going to come under the BlackRock umbrella if we did this. But over the course of
a year or so of discussion, we agreed that we would do it. In the first step, we actually bought back part
of the fixed income manager, and then they contributed all of the other asset managers, so we ended up
with a 20 percent stake in the combined enterprise, and that was extremely important.
By 1999, BlackRock had $165 billion in assets and went public.45 At the time of the offering, PNC had
a majority ownership stake in the publicly-traded company, holding about 70% of all outstanding
common shares. However, that number decreased to 21.7% by 2014.6 After its IPO in 1999, BlackRock
grew tremendously, thanks in large part to acquisitions (see Exhibit 3). BlackRock acquired State Street
Research and Management Company in 2005, Merrill Lynch Investment Managers (MLIM) in 2006,
Quellos Capital Management in 2007, Barclays Global Investors (BGI) in June 2009, Claymore
Investments Inc. in 2012, Credit Suisse’s exchange traded funds business in 2013, and real estate
investment advisory company MGPA in 2013.7 Prior to the 2009 acquisition of BGI, the merger with
MLIM in 2006 was BlackRock’s biggest merger. The merger with MLIM was significant because prior
to that about two thirds of BlackRock’s managed assets were tied up in fixed-income products. The
merger with MLIM more than doubled the company's total assets under management (AUM) and greatly
expanded its exposure to equity strategies, leaving managed assets split more evenly across equity,
fixed-income, and cash management strategies when the deal closed.8 As Wagner described:

There were some interesting things about the Merrill transaction. The combination made sense to
everybody. It was just extremely obvious because BlackRock had been primarily a fixed income
manager. MLIM was primarily an equity manager. BlackRock was primarily institutional, MLIM was
primarily retail. BlackRock had a few international offices, MLIM was global. It was just hugely
complimentary, and that aspect of it made sense to everyone, including our clients and consultants, who
didn’t even put us in the penalty box. Markets were extremely favorable, so we had tons of tail winds,
and we kept growing straight through that transaction, but it was much, much more complicated than
State Street from an integration perspective on a whole host of fronts. The technical integration was
much more complicated because it included extensive equity capabilities that we had not had before and
needed to all be built into the system and supported in the meantime and because they had outsourced
part of the operations outside the US. MLIM itself was a combination of Mercury and Merrill, and that
combination had not been well integrated, and so really it was like doing two integrations at once from a
cultural and operational perspective.
The deal with MLIM increased BlackRock’s AUM from $452 billion in 2005 to over $1 trillion in
2006.9 10 BlackRock became the largest publicly traded asset manager in the U.S., the world's largest
active manager of fixed-income products, and the world's 13th-largest equity manager. The deal also
significantly impacted BlackRock’s global footprint, as it then served clients in more than 50 countries
and sourced more than one third of total AUM from international investors. According to Ivey
Schmerken of Wall Street & Technology:
The MLIM merger worked out well for BlackRock, in our view, because it not only added to the
company's existing product lineup, but expanded its footprint into other channels and markets, which
ultimately eliminated the need to find major cost savings through layoffs or product eliminations. We
also believe that the firm's more diversified product portfolio, along with its scale and untarnished
reputation (especially with regards to risk management), played a big part in its ability to retain assets
during the financial crisis and attract investor inflows in the immediate aftermath of the meltdown.

On June 11, 2009, BlackRock announced its agreement to acquire Barclays Global Investors, a division
of the British multinational bank Barclays. In December 2009, BlackRock acquired BGI for $13.5
billion, which was “one of the largest deals in the money management industry” and “the company's
biggest transaction and its most transformational.” BlackRock paid cash and stock for BGI, raising
billions of dollars of capital from unnamed institutional investors. BlackRock bought iShares, managed
by BGI, an investment platform for exchange traded funds (ETFs).16 According to Schmerken, “The
biggest question mark surrounding the purchase of BGI was BlackRock's ability to effectively meld
what was primarily a passive management group at BGI with its own operations, which were focused on
active management.”

As of 2008 (before the merger), BGI operated in 15 countries, managed $1.5 trillion in assets, and
brought in a revenue of $2.9 billion. Because Barclays had refused government help after the financial
crisis, it was in poorer financial health compared to its competitors.18 For Barclays, especially after its
acquisition of the American operations of Lehman Brothers in 2008, combining its investment
management division and its asset management division was becoming increasingly difficult. Selling
BGI was Barclays’ way of trying to increase its financial strength, giving it more capital to invest in its
investment banking division, to which it had started shifting its focus.19 The timing of the deal in the
midst of the financial crisis was significant, both as a challenge and as a catalyst. As Wagner explained:

BGI was a completely different situation. We were right in the middle of the crisis. Frankly, nothing was
obvious to anyone in those days. You’d not sleep any Sunday because you were afraid of what was
going to happen overnight. A trillion dollars of wealth had been wiped out in the crisis, and we had a
view that rates were going to be very low for a very long time as central banks fought to stave off
depression. Our hypothesis was that in a sustained low rate environment with so much wealth having
been lost, investors were going to become extremely sensitive to how much of their return they were
paying in fees. In addition, as happens in a crisis, correlations went to one. Traditional asset
management approaches, the idea of diversification, none of that worked. People were sort of throwing
up their hands and saying, ‘I don’t know what to do with my money. I don’t know how to think about
asset allocation anymore.’ We thought investors would migrate to: ‘Here is my problem. Just solve it.’
So the idea of having these tools and learning how to integrate them into outcome-oriented solutions was
going to be extremely valuable. We talked about these things when we announced the deal. The industry
was shocked - nobody ever tried to put together a beta manager and an active manager before. They
really didn’t know what we were up to. But that was our thought process. The integration was extremely
complicated for a few reasons, but first and foremost, because we did this into headwinds. Very
dramatic headwinds.

For BlackRock, BGI brought greater international presence (then serving clients in over 60 countries20),
increased specialty in ETFs through its involvement in iShares, and added assets. After the merger,
BlackRock’s total assets under management rose from $1.3 trillion to $2.7 trillion.21 The acquisition of
BGI made BlackRock the largest asset manager in the world (see Exhibit 4).22 During the week prior to
the deal, BlackRock’s share price rose almost 15% in anticipation of the merger, and closed at $182.60
on the day of the deal.23 The deal “turned BlackRock into a major force in both active and passive
investing.”24 This transformation helped to guard against the impact of negative market swings on
BlackRock’s AUM and provided an additional option for investors looking for passive investment
products. BGI’s iShares had industry-leading market share, which at the end of 2009 accounted for 47%
of the domestic market for ETFs (with 43% market share worldwide). The growth of ETFs at the time
was remarkable, with total AUM for the category increasing at a 29.5% compound annual rate during
the 10-year period ending in 2012. This only accelerated the trend toward passive investing that had
started in the late 1980’s. Notably, some research showed that institutional investors used ETFs slightly
more than retail investors (55/45 split).25 In addition, in an effort to combine the expertise of both firms
and to focus on client-based solutions to meet long-term investment needs, BlackRock made the
decision to integrate the iShares and BlackRock U.S. retail sales teams when it announced the launch of
its iShares Core ETF Series. This created the largest retail field force in the domestic asset management
industry, capable of offering financial advisors and distribution partners a fully integrated combination
of index and active products. As Larry Fink, co-founder, Chairman and Chief Executive Officer,
explained:

The BGI transaction was so powerful at BlackRock because we’re now the only firm in the world who is
agnostic, whether we sell passively- or actively-managed investment products. Most firms only offer
one or the other. I said we should be agnostic about whether we sell passive or active products – or
whether a client buys equities or fixed income or alternatives – as long as it’s in the best interest of their
investment objectives. This is why I believe we’re in a better position worldwide to be a solution
provider. We have the full set of options for clients – and we can also blend those strategies if that’s
what it takes to create the right solution.

Merging BGI’s and BlackRock’s Cultures

The merger with BGI in 2009 was the "culmination of BlackRock’s large-scale acquisition phase,”
according to Fink. Back in 2002-2003, BlackRock had held talks with Barclays about combining the two
firms, but both firms had decided that the timing for some sort of merger was not optimal. Around the
same time, BGI hired BlackRock as a provider of risk analytics, eventually becoming one of the largest
and most important users of the firm's ALADDIN (Asset Liability and Debt and Derivatives Investment
Network).26 As a result, by the time the firms merged in 2009, BlackRock had a deeper understanding
of BGI's processes than other potential buyers, which somewhat helped mitigate the technical challenges
of merging the two firms.

BlackRock’s greatest challenge in the merger, however, was to develop a strategy for merging the two
distinctly different cultures. Ken Wilson, Vice Chairman, member of the Global Executive and
Operating Committees, and Co-chairman of the Human Capital Committee, described the sentiment he
perceived from those joining BlackRock from BGI:
When you looked at the differences between BGI and BlackRock, they were considerable. BGI had an
academic culture. At BlackRock, we were street fighters. We were people from the trenches, from the
markets. There were the average differences between San Francisco and New York: business casual
versus suit and tie, fundamental investing at BlackRock versus quant investing at BGI. We had
completely different compensation and promotion schemes, and, in the sales force, there was 100
percent overlap, and also BGI was 3,000 miles away.

Jeff Smith, Senior Managing Director, Global Head of Human Resources, member of the Global
Executive Committee, and Co-chairman of the Human Capital Committee, came to BlackRock from
BGI and described some of the same differences:

BGI was a fantastic company and a great place to work. It was a place that I would describe as much
more academic. I think it was really focused on innovations and having a sense of what they believed
the customer needed. I think there was a little bit less strength in central management and leadership and
a lot more of a ‘let 1,000 flowers bloom’ kind of approach across the company. If you think about the
differences between New York and San Francisco, a lot of those differences existed in the companies
and the people that chose to live in those two cities. I think I probably heard the words ‘client’ and
‘fiduciary’ more in my first month at BlackRock than I did in my entire career at BGI. I think that the
relentless focus on clients, on risk, on really making sure that everything we do is client-centric was
critical. I think there’s a very strong sense at BlackRock of a ‘One BlackRock’ culture and real strength
and belief in what we’re doing, as well as a mission and a passion that I think is unparalleled compared
to any other firm I’ve ever seen.

Not only did BlackRock have to reconcile these differences in culture and structure, it also had to
alleviate people's anxieties around issues such as job security and compensation, as well as help people
shift their mindsets and adjust to their new place in the firm. For example, BGI's headquarters had been
in San Francisco, but after the merger, the San Francisco office was no longer the firm's headquarters, as
BlackRock’s headquarters was in New York City.

BlackRock’s approach to merging the two cultures was to remain open and willing to learn from what
BGI brought to the table. Donnell Green, head of HR for Asia-Pacific, stated, “The thing that I found so
special about the way that the BlackRock founders and leaders brought this together was they said, ‘We
really want to take our organizations, which are about equal in size, and take the best of both our worlds
and cultures and make those our new norm.' I think that move showed a lot of humility, curiosity and
willingness to learn." Smith added, “The first step in the merger that BlackRock took that showed an
awful lot of openness, as well as a sense of meritocracy and looking broadly for talent, is all the top
leadership jobs, with the exception of Larry’s and a few others, were open. BlackRock really looked at
the talent at BGI and the talent at BlackRock, so the signal that was sent was one of openness.” As
Kapito stated:
In each of the mergers, we always strived to be best in class. So when we merged with other firms, there
was our way of doing things and their way of doing things. With each merger, we've taken the best from
each firm, which meant that a lot of people had to change. But that's okay because these deals were done
for strategic reasons. They added a lot of capabilities, but they also added people from different
backgrounds and different psyches. It is a challenge to be cognizant of this as the firm evolves, but it is
critical.
In many ways, BGI had more formalized processes and practices than BlackRock when it came to talent
management. For example, although BlackRock founders included two women, Sue Wagner and
Barbara Novick, the firm had very little in terms of formalized initiatives to connect and foster their
female talent. There was a women’s network in the London office, which was a loosely organized
version of the network that office had had when they were still part of MLIM. Conversely, BGI had a
well-established Women's Initiative Network (WIN). Wagner recalled, “I was incredibly impressed by
how thoughtful the WIN organization was in San Francisco—how much they had done, how engaged
the women in the organization were in investing in each other and in each other's growth." After the
MLIM merger, BlackRock began a nascent effort in London and was considering how to extend it to the
US. BGI catalyzed those plans. Before the close of the merger, BlackRock started planning to leverage
BGI’s experience to launch a global BlackRock WIN organization. Fink explained the relationship
between D&I and the unique history of the firm as such:

I believe that the history of BlackRock gave me greater conviction that a great firm is a diverse firm. A
great firm is a firm that has many men and women from different backgrounds, different heritages,
which leads to different perspectives and eliminates group think. If you think back to the phases of
BlackRock, for our first 16 years or so, we were an investment firm with only one true specialty, fixed
income, with most of our clients being institutional. Having 25 percent of our founding partners being
female, most people would have called us a pretty diverse firm, but the reality was we were certainly not
a diverse organization. We had, in retrospect, a very limited scope. It was in the phase from 17th year to
our 22nd or 23rd year that we really started to have what was necessary to build a great global firm, and
much of that diversity came through our acquisitions.

Role of WIN Organizations in BGI—BlackRock Merger

WIN Organization at BGI
In 2005, Amy Schioldager, Managing Director at BGI, sat in a firm-wide meeting and noticed
something that concerned her. Looking up at the stage at the senior leaders of the firm, she saw nine
white men and not a single woman. This was a change from the way women had been represented in the
firm just a few short years prior. In the early 2000s, Patricia Dunn, the former CEO of BGI, stepped
down from her position, and some other senior women also left the firm shortly after her. Then, BGI
sold its trust company business to Investors Bank & Trust, and there were a number of senior women in
that business who left the firm as part of that sale. The end result was a sharp decrease overall in the
number of senior women in the firm. Schioldager recalled, “I remember sitting here thinking how times
had changed since I was first at the firm and women were much more visible and in big roles in the
organization. I felt from the standpoint of a middle manager woman, would you see yourself in the
future of the firm or not?" Schioldager decided to take action. Shortly after the meeting, she sent out an
invitation for an event called “The BGI Women” and subsequently gathered about a dozen women
together to ask the question: Should BGI establish a firm-wide women's network?

After that initial meeting, the wheels were in motion. Schioldager and her colleagues reached out to
other networks at firms such as Goldman Sachs and Deloitte to learn about what those networks were
doing. From there, they established the initial focuses for their own network: networking and building
leadership skills. Furthermore, in an attempt to gain buy-in from the senior leadership at BGI, they hired
a team from Catalyst to train a group of women internally at the firm to conduct focus groups and then
synthesize the results to present to the CEO. About eight to nine months after the initial conversation, in
2006, Schioldager and her colleagues launched the WIN organization at BGI.
The BGI WIN organization started with events followed by cocktail hours or mixers, but soon
developed more targeted initiatives to address the needs of women at the firm. For example, they added
a Parents Network, where women could discuss a range of issues from going out on maternity leave to
finding childcare. In time, the Parents Network also addressed issues of elder care. Schioldager
described a program called "The Art of the Ask” in saying, “This program was developed specifically
around women gaining their own voice and asking for what they need to advance their careers. Women
are often not as bold in their statements, and they’re less likely to be inclined to speak up at a meeting or
on a video conference call. They second guess themselves. Women sometimes get in their own way, so
we were trying to give women tools to gain confidence and frame their ‘ask’ appropriately.” The BGI
WIN organization also specifically targeted women at various points in their careers to help them reach
the next level of leadership. For example, it had a mentoring program for women who were getting close
to promotion to managing director.

With the establishment of the WIN organization at BGI, the firm started to formalize its collection of
D&I metrics. Helander, formerly of the team from Catalyst, joined BGI in 2007 as head of corporate
social responsibility, which included diversity and inclusion efforts. She recalled, “We took a pretty
deep dive into the metrics—what was our history of moving talent through the firm and how did that
differ by gender, race/ethnicity and location? We shared that information with the CEO, the COO and
other senior leaders of the firm. This was a very data-driven place, as you might imagine."

WIN Organization at BlackRock

In November of 2009 (a month before the close of the deal between BlackRock and BGI), BGI hosted
an annual client conference, and it was at this conference that Wagner first discussed with Schioldager
and Helander the idea of establishing a WIN organization at BlackRock. As Helander described,
“BlackRock was a firm that had grown incredibly fast, much of it through acquisition, and having a
concerted focus on diversity and inclusion had just not been high on the radar, given all the integration
work they'd been doing over the years. But when leadership evaluated where they wanted the firm to be
moving forward, the choice was made to ramp up focus in these areas."
As one of the first steps in formalizing its D&I efforts, Smith brought Helander onto his leadership team
as Global Head of Philanthropy and Diversity and Inclusion. In the months leading up to the close of the
deal, Helander and her colleagues pulled together some of the senior women in the firm globally to share
information and form the BlackRock WIN organization. In order to fully engage members and create a
foundation on which members from both BGI and BlackRock could build trust and help integrate
cultures, the WIN organization could not be purely symbolic, but had to provide real value. Anne
Ackerley, Managing Director, head of U.S. and Canada defined-contribution business, and one of the
co-founders of the BlackRock WIN organization, explained, “I think one of the most important things
when we were starting WIN was to make sure the network was going to benefit the company. We
wanted to make sure that the activities we undertook and the whole tone of the network was going to be
that attracting and retaining more women would be good for BlackRock. We kept our activities very
business-focused at the beginning." Novick summarized:
Here we had a firm where two of the eight founders are women. That was quite unusual in 1988. How
can we do better than that? I started a group called Women at BlackRock, and we had a couple of
events, sort of a wine and cheese and meet each other and talk. I knew all of the senior women, but not
all of them knew each other. It was very hard because that was before we had any real HR Department
or any real support for having something like that. It was only what we, as a group of women, could do
for ourselves. It provided some network and some support, but you couldn't do anything formal. On an
informal basis, we all agreed to look back and reach out to junior women to help them navigate their
careers. Then we went through all these acquisitions with State Street and MLIM, which were very
disruptive and took a lot of time. Some of those nascent efforts around women in the firm languished.
When we bought BGI, we got a new chance and a great platform. Amy Schioldager had done a fantastic
job, and it wasn't just Amy. BGI had been run by a woman, Patty Dunn. She was their CEO for several
years. She had made a really remarkable effort at inclusion, real inclusion with women in all sorts of
senior roles. BGI also had employee networks, including a WIN network. We looked at that and we
said, ‘We're interested.’ I won't say we tried and failed. We tried, but didn't really have the resources or
the consistency of the effort to really get very far. We hadn't done anything badly, but we hadn't done
anywhere near enough. Here, they've got this WIN network. Maybe we can adopt that and expand it.
Essentially they had a WIN network in London, and they had a WIN network in San Francisco. We
created a global WIN network. I was very excited about that, and very supportive of that from the get-
go.

WIN Organization and Merger of BGI and BlackRock

The BlackRock global WIN organization, comprised of the WIN organizations from BGI and
BlackRock respectively, launch in March 2010. "One thing I really wanted to do from the very
beginning,” stated Wagner, “was to make sure it was global, that ideas were being shared across all of
the WIN chapters so that we could help women wherever they were in the world feel connected to the
organization and develop. I felt strongly that anything we could do to make a larger firm feel smaller
and build community would be beneficial." Wagner, the executive sponsor of the global WIN
organization, traveled to spend time with every WIN chapter around the world in order to build trust
with its members. This commitment sent a strong signal throughout the firm for how important the
success of the WIN organization was to senior leadership. Helander described how the WIN
organization came to play a critical role during the integration of the two firms:

Within 6 months of the merger, BlackRock went from having one network in the London office, to
having networks in all of the major offices, and we had senior women leaders chairing those networks in
each of those locations. It had a really powerful impact that I don't think anyone necessarily anticipated.
In the highly charged, emotional process of merging two companies, it gave employees, particularly the
women in the firm, an opportunity to connect around a common issue, apart from their day jobs of trying
to integrate systems, jobs and responsibilities. In many ways, it was a powerful catalyst to integrating
the cultures.
Rich Kushel, Senior Managing Director, Chief Product Officer and global head of the Strategic Product
Management group, member of the Global Executive and Operating Committees, and GEC sponsor for
diversity and inclusion, was running all of the businesses outside the United States during the merger
with BGI. He spoke about how the WIN organization helped throughout the integration process in
London:

Our integration challenges in London were bigger than New York’s because in London we had two
offices of 1100 people, 600 yards apart that needed to come together and be integrated. Whereas, in New
York and San Francisco, you could peacefully coexist without having to really change your lifestyle. I
was very much focused on finding ways that we could help bring those two businesses together and
bring the people together. So, we brought together the two women’s networks, and that actually proved
to be one of the things that brought people together pretty quickly. Those were organizations that were
focused on networking, so they actually knew how to bring people together. Because the women’s
network was such an effective way to connect people, employee networks have since expanded, and we
now have more types of networks, which have become part of the fabric here. Those have proved
important anchor points for people.
As Green further explained:

WIN provided forums in the really early days for employees from both of the firms to come together
around something they cared about and something they knew would make a difference for them, and a
place to get to know each other and understand how we looked at the world differently. I think it was a
very powerful mechanism for creating both a formal structure but an informal environment for people to
share and build relationships. It became really meaningful in terms of doing everything else we did in
talent. That came before performance ratings, talent practices or leadership development. WIN was, in
part, what made it all come together and happen.

Men and the WIN Organization

Men were also encouraged to become involved in the WIN organization. “WIN does have men that are
members,” says Ackerley, “Although not probably as many as we’d like. We’re placing a lot of effort on
engaging men because they’re often the ones who are managing women.” In addition to D&I, another
focus for BlackRock, as set by the Human Capital Committee, was manager capability, including
managing inclusively and managing diverse teams. The Human Capital Committee (HCC), a group of
about forty managing directors from all over the world who met monthly to discuss important, firm-wide
talent management issues, set managerial capability as a focus due to the rapid growth of the firm and
the changing and expanding nature of people’s managerial roles, particularly in middle management.
Membership in WIN, therefore, had benefits for the men. In addition to being better managers to the
women on their teams, some men reported personal benefits as well. For example, according to Wagner,
some men reported that their involvement with the WIN organization helped them be better fathers.

In addition to membership, there were other ways in which the WIN organization included men in the
gender conversation. For example, whenever there was a panel discussion, men were invited to sit on the
panel alongside women. In the mentoring program, mentors were initially all senior women, but the
WIN organization then opened up mentorship roles to men until the program was better balanced, with
about half the mentors being men. Schioldager, along with two other female managing directors,
delivered presentations on the topic of challenges faced by women at BlackRock to small groups of male
managing directors. According to Schioldager, in some cases, men would have “light bulb moments”
when they realized that they had unintentionally exhibited biases that may have had negative impacts.
As a result of these meetings, some men recommended women on their teams for the WIN mentoring
program. One man went as far as establishing a “women in investment” group to ensure that the women
on his team had a voice, understanding that they may be less inclined than their male counterparts to
offer their opinions. As Novick emphasized, “Men must embrace gender diversity for the business case;
women cannot make it happen on their own. There are just not enough women in those business leader
seats to solve this problem on their own.” Kapito described his investment as a senior male leader in the
WIN organization:

As part of our Women’s Network, we regularly engage with our clients on the importance of diversity.
Last year, I brought together a group of very senior women at our client firms for a half day conference.
I sat there as the only male in the group, amongst both clients and BlackRock employees, through the
entire presentation, so that people saw, both internally and externally, how important it was to the
organization, that we sponsor diversity, and that we “walk the walk” and “talk the talk.”

A Broader D&I Strategy

Establishing D&I as a Firm-Wide Priority
Shortly after the establishment of the global WIN organization, BlackRock evaluated its D&I metrics,
developed a D&I strategy, and articulated a business case for D&I. Helander led the in-depth analysis of
the firm’s D&I metrics, such as who in the firm was moving through the talent pipeline. She then
collaborated with Wagner and Smith to develop a strategy and business case.

Helander, Wagner and Smith worked closely together to quantify the significance of D&I at BlackRock,
such as the AUM of clients who were inquiring about D&I, or what the implications were of
increasingly more clients originating from outside the United States. In October 2010, once they had
developed a strategy and business case based on metrics and quantitative analysis, they shared their
findings and ideas with the Global Executive Committee's Talent Sub-Committee. The Global Executive
Committee was BlackRock's highest level governance committee. Its twenty-three members were the
senior executives responsible for the firm's key activities and operations, such business performance,
strategy and planning, talent development and retention, risk management, and external affairs.27 The
GEC’s Talent Sub-Committee was comprised of eight to ten GEC members who focused on talent-
related issues. Helander recalled, "Larry Fink, our CEO, set D&I as a personal objective with the board
of directors, and other GEC members were also asked to make it an objective. We then shared the
business-specific data with different parts of the organization and identified what the necessary action
steps were going to be based on that data." Smith described, “In terms of the belief in different ideas and
approaches and a willingness to actually integrate those into the core of the business, BlackRock is quite
advanced, particularly in its senior leadership ranks. Larry came out with a formal statement and set of
objectives for diversity being a real, firm-wide objective.” As Kapito explained:
Externally, as a global firm, it's important that we look like our clients. In the future, our diversity, and
the diversity of the clients, is obviously going to increase, and our clients want to engage with people
who understand their context and their challenges. As such, we need people of all different backgrounds
and experiences. Internally, in order to be able to serve the global employee base, it's important that we
have a culture recognizing and leveraging a wide range of talent. We need a variety of role models
within the firm for people to look up to. Without diversity, it's harder to attract and retain the talent that
we need.
Novick summarized the business case for D&I as existing on three dimensions: “First, groups make
better decisions if they have diverse opinions. Second, our customers notice and care. Third, our
employees notice and care.”

Expansion of Formal D&I Initiatives

With the support of the firm’s leadership, other formal initiatives were established and expanded
in the effort to make D&I a priority and create an inclusive culture in the firm.

Out Network The next employee network to be established after the WIN organization was the Out
Network for LBGT (lesbian, bisexual, gay, transgendered) employees. One of the executive sponsors of
the Out Network was Alan Mason, Managing Director, head the Americas’ indexing business, and co-
chair of the Human Capital Committee’s Diversity and Inclusion Sub-Committee. Mason described how
the Out Network paralleled the WIN organization in its ability to bring together people from both sides
of the integration with BGI:

The San Francisco women’s network, developed initially at BGI, really paved the way for a lot of other
diversity initiatives. Employee networks for women later led to the creation of our OUT network,
focused on gay and lesbian employees, and many other networks. During the merger, our employee
networks created an opportunity to bring offices and regions together by encouraging people across
these different businesses to engage, create new relationships, and really get to know each other in a
different way. The network focus was very different from merger-related, “top-down” organizational
activities. It was about “bottom-up” networking with a goal of promoting community and trust. It was a
very strategic thing because it fostered cultural things that needed to happen in the merger—you needed
teams to get to know each other, leaders to get to know each other, and for people to form bonds across
teams and offices. These cultural activities cannot be dictated; they have to be chosen and selected by
participants in the culture.
With the WIN organization and the Out Network helping to support the integration of the two firms and
create an inclusive firm-wide culture, momentum was building. As Wagner put it, “One of the things
that WIN’s success did was it gave others courage to create their own communities. So, the Out
Network became more confident, and as they succeeded, people became more enthusiastic. More
networks followed.”

Multicultural Network The BlackRock Multicultural Network, established in 2013, was a network
comprised of employees who identified as ethnically diverse. The firm decided to establish the
Multicultural Network instead of separate networks for specific ethnicities (e.g., Hispanic, African-
American, Asian) for the sake of having a critical mass in most, if not all, locations to support the
network and make it successful. Daniel Gamba, head of BlackRock’s iShares Americas Institutional
Business and member of the Global Operating Committee, who served on the steering committee for the
Multicultural Network, explained, "It is challenging because, being a diverse employee myself, the
initial reaction is ‘I'm different. I have very few things in common with the other ethnic backgrounds in
that network.' But as you actually dig down, you realize that there are many more commonalities than
there are differences."
The goal of the Multicultural Network was two-fold: first, it aimed at fostering diversity of thought
stemming from a diversity of backgrounds, and second, it aimed at promoting an employee population
that resembled the client population. “We're trying to become much more relevant for individuals,
customers, and consumers,” stated Gamba, “That will raise even further the challenge of understanding
them, and to understand them--those diverse views--we need to continue to be open- minded to different
views and backgrounds.” Gamba hoped to mimic the success of the WIN organization: "Management
decided to emphasize WIN as part of BlackRock, part of the integration, and over the past five years, we
have made a lot of progress in terms of being a destination for female talent. One of the challenges of
the Multicultural Network is how to increase visibility and work with different constituents to build an
ethnically diverse employee base.”

Beyond Employee Networks

Training on Unconscious Bias

Employee networks were only one example of how BlackRock promoted D&I among its employees.
For example, in 2010, the firm hosted a global leadership offsite that included training by an external
consultant on the topic of unconscious biases. “I thought it was just an amazingly eye- opening
presentation for people," said Kushel, "I think it really made people change the way that they react and
behave.” Helander added that the training made everyone aware and accountable for their own biases,
stating, “It was powerful because it framed the issue as one that we all own. It emphasized that this was
not about white males being exclusionary, but about each of us holding implicit biases, and how we can
understand and take action to address that.” In 2014, the firm expanded efforts to address unconscious
biases by developing sessions on the topic to be rolled out to all the firm’s managers. It continued to be
an important topic to address. Novick, for instance, described instances when she encountered
unconscious biases at play in promotion meetings:
It’s happened when I’ve been sitting in promotion meetings, and people present the slate of candidates.
A woman's name comes up, and she’s considered difficult to work with. The next one whose name
comes up is a complete jerk, but it’s a guy. People say, ‘Oh yeah, he's a great candidate!’ When I ask,
‘How about the fact that he's a jerk?’, the response is, ‘He can work on that.’ My response is simply,
‘How is it that the last one who was a woman, who was difficult to work with, wasn't good enough?’ It
changes the dialogue.
On the other side of the coin, somebody once presented a candidate for managing director and told me
that she was a ‘nice girl.’ I said, ‘Excuse me? This is not a college grad just joining. This is somebody
with ten years of experience who has distinguished herself as being really good. If you call her a ‘nice
girl,’ think about what you've just done to her career-wise.’ Sometimes, I personalize the discussion and
say, ‘If it was your daughter in ten years, how'd you feel about that?’ which also changes the dialogue. A
lot of times, the guys don’t realize the implications or impact of their choice of words.
Kushel went on to explain how some skeptics in the firm were starting to think about D&I differently as
the inclusive culture in the firm further developed:
When you talk about diversity among some people, they fear it means you’re going to lower standards. I
think when you go back to the years immediately following the merger, for example, when you talked
about wanting to make certain that we’ve got a fair number of female managing directors, the instant
response was, ‘Oh, so you’re going lower your standards for the women?’ And now that we’ve been
doing this for four or five years, you just don’t hear that anymore. We have made it very clearly that it
was about casting a wider net. It was about eliminating unconscious bias.

Founders Scholarship
Another creative approach for addressing D&I efforts at BlackRock was the Founders Scholarship,
started by the firm in 2013 to increase its recruitment capabilities of talented students who identify as
being diverse at top-ranked business schools. Founders Scholarship recipients won a summer internship
at the firm and a portion of the following year's tuition. "We had some of the most amazing applicants
for anything we’ve ever had BlackRock,” explained Kushel, who was involved with this initiative, “We
were planning on taking five students, but we ended up having 14 applicants join us for the summer,
including seven who received scholarships.”

Engagement of Senior Leadership

Women’s Leadership Forum & GEC Sponsorships

Perhaps one of the most in-depth D&I initiatives at BlackRock was the Women’s Leadership Forum
(WLF), a year-long advanced leadership program for senior women at the firm. The WLF was designed
for female managing directors and directors from various businesses and geographies to complement
other leadership programs, as well as to focus on the challenges that women specifically faced,
especially once they started climbing the ranks in their careers. The program consisted of four main
pillars. First, participants were provided with in-depth assessment and feedback on their performance.
The firm recognized that oftentimes women did not get the feedback they needed to be successful,
particularly as they become more senior, because men were fearful of providing feedback and being
perceived as not politically correct. Second, the participants were paired with coaches who could help
them to articulate a career aspiration statement and corresponding career development plan. The logic
behind this portion of the program was to encourage women to set higher professional goals for
themselves than they might have otherwise. Third, participants were brought together into peer learning
groups with the aim of encouraging participants to learn from one another and to build a community of
support. Fourth, participants were assigned to a sponsor on the Global Executive Committee.
The fourth pillar of the WLF required significant commitment from members of the GEC, reaching
beyond advocacy for D&I or delegation of D&I initiatives. Instead of waiting for sponsor relationships
to develop organically, the firm proactively matched each participant to a GEC sponsor, saying to both
participants and sponsors that, although the firm was helping to set the stage, it would be the
responsibility of both parties to develop trust and confidence within the relationship. Not only was it an
opportunity to introduce GEC members to up-and-coming talent in the firm, but also to educate them on
some of the barriers and challenges women in these types of positions faced.

One such GEC sponsor was Mark McCombe, Senior Managing Director, Global Head of BlackRock’s
Institutional Client Business, Asia-Pacific Chairman, and a member the Global Executive and Operating
Committees. “The sponsorship part is what I loved because you sort of adopt your participants. They
become very much an extended part of your team, and you end up spending a lot of time talking with
them.” Wilson sponsored eleven WLF participants over three cohorts and described how the
relationships he built in his role as sponsor were longer-lasting than the duration of the WLF. “I still
hear from the women I worked with from once a month to once a quarter,” Wilson said, “and I think it’s
been a two-way street and very effective. It’s just one example of the senior- most involvement and
engagement in the issue of supporting our female talent.” As Smith noted, “The GEC members taught a
lot and helped the women in the WLF in a lot of great ways. The equally important thing is that the GEC
members get incredible perspective from these women in terms of the businesses they’re in, the regions
they’re in, and the challenges that they’re facing. I think it’s an experience that has also helped further
the diversity dialogue, which was great.”

In the first cohort of the WLF, two-thirds of the participants moved into new or expanded roles within
approximately a year. The overarching success of the program helped to address the concerns of skeptics
and heighten people’s awareness of gender issues. “I think there were plenty of people, at various levels,
who were skeptical. Some of the women themselves when they started out, including some of my very
close colleagues, were pretty skeptical about the potential benefits. To a person, they have been
converted,” attested Quintin Price, Senior Managing Director, Global Head of Alpha Strategies and a
member the Global Executive and Operating Committees. One of the WLF participants who gained a
deeper appreciation for the benefits of the WLF was Maria O’Leary, Managing Director, Global Head of
Corporate Services and Co-chair of the Human Capital Committee’s Diversity and Inclusion Sub-
Committee. O’Leary participated in the first WLF cohort and was sponsored by Wilson. O’Leary
reported:
As a result of participating in the WLF, I really became a student of gender differences and what drives
women, especially in our industry, and some of the challenges women face, like the imposter
syndrome.a I became more of a student of gender differences than I ever was earlier in my career, and
it’s all in an effort to provide guidance to the generation of women who are coming up now, who are
VPs who come to me and want the secret sauce. I’m trying to help them figure out that there isn’t a
secret sauce and that you have to find your way. I’m really proud of the progress that I’ve seen
BlackRock make in the last five years around gender, as well as general diversity.
As Smith noted, another key benefit of the success of the WLF and the GEC sponsorships was the signal
it sent to the entire firm about senior leadership’s commitment to D&I, which in turn helped to further
foster a firm-wide culture of inclusion. “When you have this program happening with the most senior
leaders,” Smith stated, “and others see the successes that this program and these women are having, it’s
been a pretty powerful multiplier across the firm.” The success of the women from the WLF program
also helped to allay the concerns of skeptics of this and other D&I initiatives. Smith explained:

I think that there were skeptics. There certainly were some people who
really constructively challenged the D&I efforts and really wanted to make
sure that diversity and meritocracy could live in the same space. I think
that people always worry − and I think this is a reasonably consistent
worry across the industry − that we’re going to make decisions for the
wrong reasons and that we’re going to get to a place where people earn
jobs, promotions, compensation, whatever it is, for reasons that aren’t
merit- based and focused on the business. That’s something that we still
talk about. We want to make sure that we’re preserving a merit-based
culture but also make sure that we’re getting talent from the broadest
pools possible and making sure that the most number of talented people
have the highest chance of succeeding. I think that we never talk about
diversity without also talking about talent and the right people in the
right jobs.

Human Capital Committee

The Human Capital Committee, co-chaired by Wilson and Smith, was another example of a group of
leaders who invested their time in advancing talent issues, including D&I (see Exhibits 5-7). The
purpose of the HCC was to partner with Human Resources to drive the human capital strategy for the
firm. Its responsibilities included: ensuring a high-performance culture, prioritizing leadership behaviors
that mattered, developing employees, talent practices, and networking and collaboration tools.28 Smith
described:

I think what’s been special about the Human Capital Committee is the level of business engagement in
the talent agenda. I always say we don’t have an HR talent agenda—we have a BlackRock talent
agenda. The HCC has about 35 leaders from across the firm, all within one to two levels of the Global
Executive Committee. They’re all some of the most respected culture-carriers across the firm. For four
years, that group has been together. In February, we have a full day and a half off-site every year to
really make sure that the talent agenda is challenged and pressure-tested. These are the people that are
going to go out and help execute it, sponsor it, talk about it in their regions or their businesses, and really
carry the torch because we don’t want to be an HR and a talent function that’s just doing meaningless
stuff. We want to do it because it matters to BlackRock and the executive committee.

Furthermore, Wilson explained the crucial role the HCC played in the wake of BlackRock's
acquisitions:

One of the biggest issues that our organization had to deal with, particularly in the wake of the BGI
transaction and integration, was that this was a firm that had grown very quickly through acquisition,
and growth and the demands of that expansion had outstripped the underpinnings of what you would
consider to be a well-functioning organization with best-in-class practices and behaviors. We just didn’t
have these programs in place that certain other large institutions would have, such as a robust, entry-
level hiring process, or training programs for junior managers, mid-managers, senior managers. We
were not a Goldman Sachs or a JPMorgan in terms of HR resources, policies, procedures. I think what
was fortunate was that at its core we had very positive, strong, consistent values that could overcome a
lot of this. So, much of the work that was done here the three years right after the BGI transaction was
really focused on having the infrastructure, the resources in place to even begin to focus on developing
our talent. The Human Capital Committee is at the center of establishing that infrastructure, and
members take their responsibilities seriously. It is not viewed as just an HR exercise. It’s viewed as
having the complete support of the leadership of the firm, which it does, and we have a very high level
of engagement and enthusiasm for doing what’s right for our people.
Matthew Breitfelder, who runs the global HR business partner team (the HR teams in each business),
further explained:

The HCC became a powerful mechanism to help integrate the BlackRock and BGI cultures together as
what we call ‘One BlackRock.’ Through the HCC, a diverse mix of leaders have figured out how to
bring a shared culture to life through some big ideas and initiatives as well as through day to day talent
decision-making across the firm. The high level of diversity of the group - across regional, cultural, and
gender diversity and of course through diversity of thought - has been critical to the quality of the debate
and the ideas that emerge. And the fact that it is co-chaired by both Jeff Smith and Ken Wilson, who's a
long-time influential leader in our industry, reinforced that this was inherently commercial and had the
attention of the very top management in the firm. The HCC was positioned from the start as a highly
visible platform for leaders to show their stuff and serve as forces for good for the future success of the
combined firm. One of the most important decisions that Jeff and Ken made was to make sure that every
major talent, culture and diversity initiative at the firm was guided through the strategic direction of the
HCC versus being driven by the HR team. As subject matter experts in HR we work arm-in-arm with
the HCC but the HCC is the clear driver.

When specific issues required more focus, the HCC would establish a subcommittee dedicated to that
specific issue. The HCC often drove initiatives that required members to dedicate their own time.
According to Smith:

When we were first developing formal leadership programs here, as opposed to bringing in consultants
or having a bunch of HR people go out and conduct focus groups, we actually had the Human Capital
Committee involved. Quintin Price, for example, who was the head of fundamental equities at the time,
one of our most important positions in the firm, was conducting focus groups with employees about
leadership, leadership behaviors and diversity, and so were the other members. We reached over 1,500
employees. It sends a signal to employees about the amount of work that these leaders do on talent
issues. They don’t just sit and comment on agendas and things.

O’Leary, who chaired the HCC Diversity Sub-Committee, also led a similar charge. In 2013, they
conducted "Inclusion & Diversity Road Shows," in which all the members of the subcommittee met with
groups of senior leaders, including managing directors and executive committees from the different
business groups, to discuss the firm’s diversity agenda specifically. They discussed the spectrum of
visible to invisible diversity metrics, what diversity meant for their specific business, and how they
thought the firm was doing on D&I. In 2014, O’Leary worked to develop a new road show based on a
case study on diversity and teams. Breitfelder noted, "We have a tremendous amount of passion on the
HCC for the diversity agenda at BlackRock. Our sub-committee on diversity is very focused on this
issue and is challenging, inspiring, and pushing us every day to get it right."

Other initiatives led by the HCC also had positive implications for the firms D&I strategy. For example,
beginning in 2014 the HCC created the Multicultural Talent Development Initiative, which targeted a
selective group of directors and managing directors for sponsorship and professional development. The
HCC was also responsible for analyzing the results of the employee opinion survey. A subcommittee
would conduct the initial analysis and then the HCC as a whole processed the results and developed
action plans to address negative trends. The HCC also led an initiative called "Internal First," which
focused on mobility within the firm for the sake of developing talent. Lastly, the HCC was an integral
player in the integration efforts that took place in the years following the merger with BGI, as it helped
to formalize the HR talent agenda, procedures and practices, as well as define the firm's key principles.
“The HCC has been, in my judgment, the most successful firm-wide committee,” asserted Wilson,
“People aspire to be on it." As Breitfelder explained:
The surprising thing about the HCC is that so many of our best leaders have used their tenure on the
HCC not just to serve as advisers and strategists but to truly roll up their sleeves and dive in and build
things with us. I have been blown away by the passion, energy and drive these leaders bring to the HCC.
Four of our most recent additions to the firm's Global Executive Committee have come from the HCC.
We now have a number of MDs who really want to be a part of the HCC because they see how
impactful it is. They also think of it is as very positive for their careers and their future at BlackRock.
We now have many requests from senior leaders to participate on the HCC. The HCC certainly gives
them firmwide exposure. But it's also, frankly, a bit of a cultural test to show that you can be generous
and egoless and not selfishly driven. That you put the firm first. Those are the people who tend to get bet
on for big jobs. I can point to a number of interesting examples over the last four to five years of HCC
members proving themselves and earning a bigger role.

D&I from a Global Perspective

One of greatest challenges BlackRock faced in furthering its D&I efforts firm-wide was the fact that the
firm operated in thirty countries.29 “To be a truly great international firm,” explained Fink, “we have to
be a great local firm in the countries where we operate.” This meant taking into account cultural norms
in each country when considering D&I. What worked in the U.S. or U.K. may not work in other parts of
the world, like Japan or India. McCombe explained:

It’s not about being a progressive country or a backward country—it’s about where a country happens to
be. Japan, one of the most modern and developed markets in the world, has some serious issues in terms
of female exclusion from the workplace that they’re trying to address through the new government
policy measures. That presents a whole set of challenges for us because we’re a little bit ahead of the
broader society in terms of D&I. It’s not about us trying to change what the Japanese society is about—
it’s about us trying to educate the people we can educate, our own employees and so forth, on the
importance of having principles of inclusion and diversity in the firm because we believe that leads to
better debate, better decision making, and ultimately a better outcome for the clients who entrust us
with their money.
Fink asserted, “One area where we won’t sacrifice, even if norms are different in the various countries,
is gender diversity. In Japan, if women are not represented in the workforce, they will be represented in
our workforce. We are taking gender to a different level in Japan.”

Sanjeev Malik, head of India and member of the Human Capital Committee, also faced cultural
challenges in certain parts of India when it came to women in the workplace. When he first arrived at the
Gurgaon office in 2003, he was surprised to learn many women's resumes were being discarded, either
by the recruiting agencies or by managers, based on the personal information provided by the candidate.
(In Indian resumes, it is quite common to provide personal data that would be rare in many parts of the
world, i.e. marital status, maternity status, father's name, age, etc. (see Exhibit 8).) In one specific case, a
woman who had specifically mentioned that she was pregnant was discarded without any further
discussion. Malik remembered thinking, "This is shocking - This is not BlackRock". As a result, one of
the actions that the team took was to create recruiting metrics that could be measured and reported. The
weekly reporting flowed through the entire recruiting process from receiving resumes to interviews to
final selection (see Exhibit 9). The goal of these metrics was to identify any specific problems areas in
the chain. As Malik explained:

We are not trying to hire only women and we are not changing our high hiring standards but bringing
about more awareness and change in behaviors. These metrics initiated a healthy dialogue that helped
changed behaviors. In addition, we also mandated a diverse interview team for every candidate being
hired. We could positively highlight managers that were making conscious effort to create a diverse
team and understand rationale of those managers who were having difficulty hiring women and address
those areas where possible.

In studying the trends of employment by gender in the different functions, Malik discovered one cultural
consideration for why women were less likely to be hired for a certain shift. In speaking with women
who worked on shift schedule, Malik and his team discovered that women didn’t want to work a later
shift because if they went home from work late at night, their neighbors would think they worked for a
call center. Older generations associated call center workers with drinking and partying, so it had
become a bad social stigma. Malik and his team reevaluated the way in which the work was being done
to see if there were solutions that would allow them to address this cultural barrier. As he described:
These concerns came as a surprise to many senior women as well and to address these we worked with
managers to understand personal situations of employees and, where practical, provide flexibility of
operating hours and create an environment where both business goals and employee goals can be
achieved. What I would not want is to miss out on good potential talent being hired and growing into the
firm because managers are not aware of challenges or have biases that are stuck in the past.

It’s a challenge to balance the needs of any one country or region while also maintaining an overall
sense of oneness of the firm. “As you develop stronger and stronger local characteristics,” explained
Fink, “you have to ensure that does not create silos among the countries. We have to make sure that, as
we talk about inclusiveness, that we remain an organization that shares information worldwide and that a
VP in Tokyo represents the firm no differently than a VP in San Francisco.” Gamba echoed this
sentiment: “One of the four key principles of our organization is ‘One BlackRock’ and that means we
are very coordinated. We know what people in Mexico are doing, and people in Mexico know what
people in Germany are doing, and so on.” Novick described the significance of the “One BlackRock”
principle:

We talk a lot about ‘One BlackRock’. Some new people will tell you, ‘We were always One.’ Actually,
we weren't. After we did the acquisitions of the PNC sister subsidiaries and we launched BlackRock
Solutions, we had a lot of things going on. We had a Funds group, a BlackRock Solutions group, an
Institutional group. We had all different things, and each one of them had different marketing materials,
different web sites, even different business cards…with different looks. For a small company, we were
not one anything. I had approached Larry in 2000 and said, ‘This is heading for a disaster. We have
materials that don't sync up. We really don’t look very professional externally.’ That was when we
ended up putting all the products under one umbrella, and I wrote a memo called ‘One BlackRock’ and
that was when we launched ‘One look, one feel.’ We developed our first ‘visual image’ for marketing
collateral. Then we consolidated what was an endless number of websites and put them into one with all
the content combined. We developed a lot of on-line systems for sharing of information so that when we
responded to an RFP, we had consistent answers no matter who was filling it out. When we responded to
a finals presentation, you had a set group of pages that you could use that had already been vetted, and
you weren't creating things from scratch or creating conflicting materials. We really had a lot of those
kinds of things as information online. When we'd hire people from outside, they'd all say, ‘Wow, it's
amazing what information is available here at the portfolio level and at the product level.’ We knew we
were doing some things right. We did a lot of things out-of-the-box and differently from what was
standard in the industry.

Looking to the Future

By 2014, BlackRock was world's largest asset manager, with 51% of managed assets in equity
strategies, 32% in fixed-income products, 7% in multi-asset class strategies, and 7% in money market
funds (with the rest of its AUM invested in alternative investments and long-term portfolio liquidation
strategies). Passive strategies made up more than half of BlackRock's managed assets, with index funds
and ETFs dedicated to equities accounting for 43% of total AUM, fixed-income index funds and ETFs
making up 15%, and a very small percentage coming from alternatives.30 Its diversity of products, as
well as its diversity of people, made BlackRock a megastar in the financial industry. According to
Schmerken:

We believe BlackRock's insistence on one common culture, focused on one common vision, operating
on one common platform has provided it with another leg up over its peers. This has been a steeper road
for BlackRock to travel, given that it has done two major deals--the 2006 merger with Merrill Lynch
Investment Managers and the 2009 merger with BGI--during the past decade. Mergers and acquisitions
in asset management have rarely gone well, primarily because their success depends on managers (who
often come from distinctly different corporate cultures) sticking around once a deal is completed. The
fact that BlackRock has done two big deals and yet continues to have one of the lowest turnover rates in
the industry--about 4% versus the industry norm of 10%-12%--is a testament to its culture, which
actively encourages employees to spend their entire careers at the firm.31
Kapito summarized the firm's attitude toward leadership, D&I, culture and employee engagement:
It really takes sponsorship and people to spearhead the culture. You have to be cognizant of this as a
leader. When I sit and chair some of these meetings, it reverberates around the organization that I was
there, and it shows the commitment. Our firm is so unique. The average age is 34. For 40 percent of the
people, this is their first job--they've never been anywhere else. Sixty percent of the people have been
here less than five years. That means we constantly have to tell the story. A lot of the people that are
here have no other basis for understanding what's good and what's not because they've only been at one
place. So you have to constantly be on top of telling the history, the story, and pass along the muscle
memory. The average age of 34 means people are getting married for the first time, having kids, their
parents are dying, and you have to be a culture carrier. I have a very good network of information, and if
I know someone is in the hospital somewhere globally, they get a call from me to see if there's anything
that I can do. I do this because one, I am interested if there is anything we can do, and, number two, I
know it reverberates around the organization that we care, because we do. Sometimes you have to tell
people that you care. It's not just enough to have them think it. They have to experience it. It takes a lot
of time. I would say that out of a working week, I spend one full day on talent, thinking about people,
making sure that I have them in the right seats, and talking about management.
With over 11,000 employees32 in 30 countries, BlackRock leaders knew D&I efforts would have to
continue to be a priority to maintain the culture that had helped make BlackRock so successful (see
Exhibits 10-12). After two presentations on the firm’s D&I standings, in 2013 and 2014 respectively,
Fink and the board of directors acknowledged the firm’s progress on D&I efforts to date, but wanted to
see more done, particularly in the areas of talent pipelines and leadership roles. The firm’s existing
leadership believed in the business case for D&I and would support Smith, Helander and leaders across
the firm with taking next steps, but what should those next steps be? For example, should the firm take
an organic or inorganic approach to increasing diversity in leadership roles (i.e., hiring diverse talent at
lower ranks and waiting for them to be promoted, versus creating opportunities for diverse leaders in
real time)? How should the firm take a global framework for D&I and then localize practices so that
they are in line with local customs and norms in the different regions of the world in which they
operate? How can the firm ensure that D&I will remain a priority for the next generation of leaders,
especially as the remaining founders prepare to retire in the next 5-10 years? What should the current
leaders do to institutionalize D&I in the firm?