When the story of why Silicon Valley Bank was taken over by the FDIC is written, the role played by policies that sacrificed fiduciary responsibility for wokeness should be examined.
Home Depot co-founder Bernie Marcus is hardly a right-wing nut or a religious fanatic. He’s a hard-headed businessman who’s disgusted with the Biden administration’s emphasis in the financial sector on DEI.
“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,” Marcus said. “Instead of protecting the shareholders and their employees, they are more concerned about the social policies. And I think it’s probably a badly run bank.”
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While SVB was circling the drain, Jay Ersapah, the boss of Financial Risk Management at SVB’s UK branch, launched woke initiatives, including the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth. “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,” said Ersapah.
Her efforts as the company’s European LGBTQIA+ Employee Resource Group co-chair earned her a spot on SVB’s “outstanding LGBT+ Role Model Lists 2022,” a list shared in a company post just four months before the bank was shut down by federal authorities over liquidity fears.
In addition to instituting SVB’s first “safe space catch-up” — which encouraged employees to share their coming out stories — and serving on LGBTQ+ panels around the world, Ersapah also spent time over the last year serving as a director for Diversity Role Models and volunteering as a mentor for Migrant Leaders.
The bank was abruptly shut down after it revealed that it had taken a $1.8 billion loss from a $21 billion sale of its bond holdings. When the company was unable to raise enough cash, the federal government closed its doors.
Bernie Marcus felt sorry for depositors who lost almost everything. “They’ve been there for a lot of years. It’s pathetic that so many people lost money that won’t get it back.”
Meanwhile, for eight months, SVB did not have a chief financial risk officer. From April 2022, when Laura Izurieta left the job, to January 2023, when Kim Olson was hired, the company had no one whose ultimate responsibility was to gauge risk.
But it’s the woke policies, epitomized by Ersapah’s preoccupation with her image as an LGBTQ crusader, that drew a lot of criticism.
One Facebook user, Paul Tucker, wrote: ‘The [SVB] Board of Directors is filled with diversity hires who are there because of their woke credentials.
‘They all have pronouns in their bios, which are filled with corporate newspeak.
‘The Head of Financial Risk and Model Risk Management was this nutbag: Jay Ersapah.
‘This is what happens when you allow people to manage your money based on woke principles instead of on their actual skill and competence.
‘I hope the depositors at this failed bank enjoy all of that diversity, because diversity is your strength, eh?’
He signed off the post: ‘Get woke, go broke.’
Obviously, there were many factors that led to SVB’s collapse, woke policies being only one of them. Unfortunately, it’s going to take a lot more than one bank going under to turn the tide against DEI in corporate America.
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