Silicon Valley Bank operated without a chief risk officer between April 2022 and January 2023 as the company instead chose to focus resources on "woke" diversity initiatives.
SVB's former head of risk, Laura Izurieta, who formerly performed a similar role for bank holding company Capital One, left the bank in April 2022. SVB didn't hire a replacement for her until January 2023, when the bank hired Kim Olson, who previously worked for Japanese bank Sumitomo Mitsui. (Related: Silicon Valley Bank has now collapsed, and 95% of deposits were uninsured.)
Meanwhile, SVB's chief risk officer in its United Kingdom branch, Jay Ersapah, notably focused all of her attention on diversity initiatives, including the company's first month-long Pride campaign, a blog for raising awareness regarding mental health issues of LGBTQ+ youth and a "safe space catch-up," which encouraged employees to take time out of their work to share their coming-out stories.
Ersapah, who identifies as a "queer person of color" and a "first-generation immigrant from a working-class background," does not appear to have worked on actual risk assessments or analysis and has instead devoted all of her attention to the company's diversity programs. The executive even took valuable time off her actual work to film a video that focused entirely on her background.
"The phrase 'You can't be what you can't see' resonates with me," said Ersapah. "As a queer person of color and a first-generation immigrant from a working-class background, there were not many role models for me to 'see' growing up."
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Ersapah's efforts earned her a spot on SVB's "outstanding LGBT+ Role Model Lists 2022," and got her appointed to serve as co-chair of the company's European LGBTQIA+ Employee Resource Group.
"I feel privileged to co-chair the LGBTQ+ ERG and help spread awareness of lived queer experiences, partner with charitable organizations, and above all, create a sense of community for our LGBTQ+ employees and allies."
Focus on diversity might have prevented hiring of sufficiently experienced executives
The Wall Street Journal opinion columnist Andy Kessler, an expert on technology and tech markets, wrote in an op-ed that a variety of factors contributed to SVB's collapse.
"Management screwed up interest rates, underestimated customer withdrawals … and failed to sell equity," he wrote. "You're really only allowed one mistake; more proved fatal. Was management hubristic, delusional or incompetent? Sometimes, there's no difference."
Among SVB's mistakes, he noted, was the fact that it "hired the wrong people." He noted that the company might have poured too much valuable time and energy focused squarely on making sure its board was sufficiently diverse, and not enough resources on making sure sufficiently qualified people were leading the bank.
"In its proxy statement, SVB notes that besides 91 percent of their board being independent and 45 percent women, they also have '1 Black,' '1 LGBTQ+' and "2 Veterans.' I'm not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands."
Home Depot co-founder Bernie Marcus himself insinuated that woke policies like the ones Ersapah focused on led to SVB's failure.
"I feel bad for all of these people that lost all their money in this woke bank. You know, it was more distressing to hear that the bank officials sold off their stock before this happened. It's depressing me," said Marcus in an interview on Fox News. "Who knows whether the Justice Department would go after them? They're a woke company, so I guess not. And they'll probably get away with it."
Marcus added that the financial world, with the urging of the federal government, successfully pushed banks like SVB into being "more concerned about global warming" than about bank profitability and shareholder returns.
"And these banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is shareholder returns," said Marcus. "Instead of protecting the shareholders and their employees, they are more concerned about the social policies."
Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, and John Perez discuss how prioritizing wokeness led to Silicon Valley Bank collapse.
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Silicon Valley Bank crisis: The liquidity crunch we predicted has now begun.
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