From The Washington Post…
Fannie Mae Reacts To Concerns Over Office Diversity
By Anita Huslin, Washington Post Staff Writer
Throughout the tumult of the past several years, there was one aspect of Fannie Mae culture that seemed to hold steady.
Even as its chief executive stepped down, and the mortgage finance giant restated earnings, overhauled its organization and laid off hundreds of employees, the diversity of its workforce remained strong. Fannie Mae continued to rack up awards and accolades for its hiring of minorities and its creation of an equal-opportunity, inclusive work environment.
In 2005, Fannie was one of the 30 best companies for African Americans, according to Black Enterprise magazine. In 2006, it scored a 100 rating on the Human Rights Campaign Foundation’s “Corporate Equality Index.” In 2007 it was among America’s top 50 corporations for multicultural business opportunities, ranked by DiversityBusiness.com.
But a pair of anonymous letters sent to Fannie Mae chief executive Daniel H. Mudd and board chairman Stephen B. Ashley asserted that minorities were growing increasingly frustrated during that period.
“For far too long African-Americans have struggled at Fannie Mae,” one letter stated.
“As more and more African-Americans leave … hope is leaving the building as well,” read another letter sent last month.
Fannie Mae officials responded quickly after receiving the first letter, calling meetings with groups of African American and Hispanic employees to get their take on the climate. Stacey D. Stewart, former head of the Fannie Mae Foundation, who joined the company after the unit was shut down last year, set out to update the company’s diversity program. The plan is scheduled to go to the board this week.
Mudd said a number of factors may have contributed to employee unhappiness -- an accounting scandal, subsequent regulatory action and turmoil in the economy and housing market. “We had other things to pay attention to, and I think we kind of took our eye off the ball,” Mudd said in a recent meeting with Post editors and reporters. “I was disappointed that we sort of lost that.”
But Mudd added that Fannie Mae’s diversity numbers “held up pretty well and increased in a lot of areas.” Last year, nearly half of its employees were minorities, a level that has risen steadily. The proportion of mid-level minority employees rose from 49 percent to 52 percent over the past three years.
One-fourth of Fannie Mae’s high-level officers and directors are minorities. That’s 10 percentage points above the average among U.S. financial services companies, as reported to the Equal Employment Opportunity Commission.
“If you look at any [senior management team] of a financial service firm and what their demographics look like, we are on the order of two to three times more diverse than any other organization,” Mudd said.
Mudd took over after an accounting scandal in 2004 forced out then-chief executive Franklin D. Raines. To help clean up the accounting mess, the company brought in an army of consultants and other new staff while others were let go.
By 2006, the work was largely done, and the company needed to shift workers again, cutting back on the consultant force and reorganizing operations generally. It didn’t help when the credit crunch hit in 2007.
Some employees grew uneasy as desks went empty. Gone were a number of “highly visible minorities that people were attached to,” said Leah Malcolm Skrine, a director in the company’s audit division who heads a networking group for African American employees.
“The company changed,” Malcolm Skrine said. “The frustrations were not limited to diversity. … Everyone was feeling stress, anxiety, frustration, uncertainty.”
The anonymous letter sent last month listed current Fannie Mae employees and others who left during the reorganization, and urged Mudd and Ashley to speak to them. Several who were contacted by The Post declined to discuss the matter, and those who did said they did not want to be identified for fear of legal action against them.
Mudd said he read the letter but thought it inappropriate to contact the individuals. Instead, he spoke with chief business officer Robert J. Levin, who reached out to people like Stewart and Malcolm Skrine to gather groups to discuss the subject.
“You never hit perfect,” Malcolm Levin said. “There will always be people who gripe, and it’s not fair. There will always be people who raise issues, and it’s fair. We’ve worked very hard to have a culture where people speak and people get heard.”
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