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What Businesses Can Learn from Eastern Bank’s Route to Board Diversity

By Carol Fulp

Eastern Bank
Image credit: Mike Mozart

By 2042, the United States will no longer be majority white, and companies that proactively embrace racial, gender, and class diversity in all areas of operations will be best poised to thrive. That’s what Carol Fulp, president and CEO of The Partnership—a Boston-based multicultural leadership development firm—writes in Success Through Diversity: Why the Most Inclusive Companies Will Win. Her book draws on both her personal and career experiences as well as case studies from a range of companies to examine why investing in a diverse workforce will help make today’s businesses more profitable. Take, for example, Eastern Bank in New England. In the follow passage, Fulp outlines the bank’s path to boardroom diversity—and what other businesses can learn from it.


When you think of dynamic, innovative, high-performance organizations, your local community bank doesn’t usually come to mind. But if you live in New England, it might. Founded in 1818, Eastern Bank is the country’s oldest and largest mutual bank, serving communities throughout Massachusetts, New Hampshire, Rhode Island, and beyond. It’s also one of the country’s most progressive banking institutions. Eastern provides fairly priced banking, investment, and insurance products and services for consumers, businesses, and underserved communities. Since 1999, on average Eastern has donated at least 10 percent of its net income—seven times the national average—every year to charity and local organizations working on causes such as advancing women in the workplace, supporting immigrants, and advocating for social justice.

Doing good has also been part of a winning growth strategy for the bank. Eastern as we know it today took shape through an acquisition strategy that has spanned decades. Beginning in the 1980s, Eastern began acquiring small savings institutions in its local area (including a bank founded by my husband, C. Bernard Fulp, who also was the first African American executive vice president in the new England banking industry). In the 2000s, Eastern continued to expand, and in 2017, it had over 120 locations and crossed $10 billion in assets. Eastern achieved record financial results in 2017, which included an increase of nearly 40 percent in net income.

Despite its growth, Eastern is small compared to the banking industry’s primary players. In 2016 the top four US banks—JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup—managed a combined $8.1 trillion in assets. Still, $10 billion was enough to make Eastern the 120th largest bank in the country—out of 6,000. And in one respect, Eastern is way ahead of these four massive banking behemoths (and many smaller financial institutions too). I’m talking about diversity. As of 2018, 50 percent of its officers and 33 percent of its management committee—a group comprising the company’s twelve most senior executives—were women, people of color, and/or those considered diverse, such as members of the LGBTQ community. Eastern’s main subsidiary, Eastern Insurance Group, is the largest insurance agency led by a woman in the US. About one-fifth of Eastern’s employees are people of difference. If you brought all of the company’s 1,900 employees together in one place, you would hear a number of sounds that might be unfamiliar. That’s because they speak more than fifty languages and dialects.

In contrast to most of its industry counterparts, Eastern has an extremely diverse board, with 50 percent composed of women, people of color, and/or others considered diverse. In the banking industry, women occupy only 9 percent of all board seats—despite holding the majority of professional jobs in the country and making the vast majority of all consumer decisions. The boards at the regional Federal Reserve Banks were overwhelmingly populated by white men as well.

Unlike many publicly traded companies, Eastern spawned three separate governing bodies over the past two centuries. Back in 1818, when a group of wealthy philanthropists founded the bank, they formed a group of corporators to oversee the running of the organization. In fact, the bank’s first customer, Rebecca Sutton, was a woman, a true sign of diversity and inclusion at a time when women were not permitted to have bank accounts. Through the years and given the bank’s many acquisitions, the number of Eastern’s corporators grew greatly. As a result, a group of trustees was chosen from among the corporators to serve as an executive committee. It eventually became apparent that Eastern also needed a group of directors to handle governance matters—individuals who could devote more time and provide specific expertise. A board of directors was formed, typically composed of twelve to fifteen members.

Fast-forward and since 2003, Eastern has placed great importance on diversity and inclusion among its directors, trustees, and corporators. It has gone from having an overall board that was previously composed of 92 percent white males to having, as of 2018, 50 percent of the 140 members represented by people of color, women, or individuals from the LGBTQ community. In addition, all members of the boards reflect a vast array of professional backgrounds, skills, and expertise.

Does a connection exist between Eastern’s unique board diversity and its rapid growth? As a member of the Board of Trustees, I believe the answer is an unambiguous “yes.” Board diversity has allowed Eastern to “punch far above its weight” compared to much larger local competitors such as Citizens, TD Bank, Santander, and Bank of America. Specifically, it has helped Eastern improve its strategic decision-making, recruiting, innovation, and connection with the community.

Eastern’s board diversity didn’t just materialize on its own. It evolved thanks to sustained commitment from senior leadership, in particular the bank’s current chair and CEO, Robert “Bob” Rivers. Upon Rivers’s arrival in 2006 as vice chair and chief banking officer, he saw the opportunity to diversify the bank’s governing boards.

Given the bank’s roots in Salem, Massachusetts, and long history serving Boston’s North Shore, its board reflected those primarily white communities. In addition, as is typical in corporate board recruitment across industries, board members tended to recommend individuals from their own networks for board posts. Eastern’s board makeup also reflected its history of acquisitions of other banks in which some of the acquired banks’ board members moved onto one of Eastern’s governing bodies. Most often, the acquired bank board members were white men.

When Rivers joined Eastern, the bank’s board of directors did feature several individuals from traditionally underrepresented backgrounds but not the trustees and corporators, the two other governing boards. The disparity puzzled Rivers. As he recalls, “I tried to reconcile why the make-up of the directors was so different from the trustees’ and corporators’—and not just in terms of diversity but different in every way imaginable, especially in engagement and connectivity to our customers. The resulting diversity of thought elevated board conversations, and innovative ideas and creativity flowed.”

Building on the existing commitment of immediate past Eastern CEOs Richard Holbrook and Stanley Lukowski to boost diversity among the bank’s customers, employees, leadership team, and board of directors, Rivers made it a priority to add people of many races, genders, sexual orientations, and backgrounds to Eastern’s boards of trustees and corporators, and also to have the bank advocate more aggressively on issues related to inclusion. “We had been pursuing ‘diversity light’ up until then,” he notes. “We had it in our employee policies and we had included people with nontraditional backgrounds on our board of directors. But we had never really injected it into the entire organization and governing bodies. We were conscious of the changing demographics, but it hadn’t fully crystallized for us. I was determined to change that.”

Born in the Greater Boston area, Rivers is named after former attorney general and US senator Robert F. Kennedy, and he shares Kennedy’s commitment to racial equality and equal opportunity. Yet Rivers also saw the trustees and corporators, the two larger boards, as untapped business assets that could help Eastern in its future growth plans. “For me, it was all about how we could have the most robust collective thinking to address increasingly complex challenges in a more rapidly changing world. The way to do that was to have as many people with different backgrounds and experiences as possible. And that didn’t simply mean putting more people of color or members of the LGBTQ community on the board. It meant diversity across a number of dimensions.” Rivers was excited about the prospect of an entire board that could energize the bank and drive innovation. He also saw board diversity as a way to help spread and embrace difference across the entire organization: “I knew that if we have diversity on the board, it would not only help us increase our cultural competence and understanding, but it would also send a very important signal that we’re serious about it.”

As directors, trustees, and corporators retired, Rivers considered diversity as a primary factor when considering their replacements. To embrace diversity and the best talent of all kinds, he first looked at building diversity on the nominating committees for new trustees and corporators. Since the bank at the time had few people of color on these governing bodies, Rivers began by recruiting more women to join these committees, believing that women would be eager to have more diverse governing bodies, and for all the right reasons.

From the outset, Rivers and other leaders at Eastern were adamant that board diversity could never come at the expense of overall excellence and fitness for the post. Says Rivers, “Our mantra in the nominating committee was first and foremost to find the best, brightest, most strategic people we can get to join our board. It was to aim high, considering those that we weren’t sure we could even attract. Our second criterion was to look at anybody as a potential candidate but particularly identifying candidates who are women, people of color, and members of the LGBTQ community.”

Eastern’s lead director at the time and a longtime board member, African American businessman Wendell Knox, agrees: “We were very strategic in trying to add people who not only were the right gender or the right color but also who brought expertise, knowledge, and connectivity to the community in concrete ways that were consistent with what we were doing. We actually demonstrated that you can achieve diversity and add a ton of value, rather than compromise on your standards.”

With the goal of more diverse nominating committees for trustees and corporators in place, the bank secured the participation of many more people with underrepresented backgrounds, while also continuing to appoint white males to its governing bodies. By any standard, the quality of these recruits has been impressive. Appointments during Rivers’s tenure have included Dr. Myechia Minter-Jordan, an African American woman who is CEO of the Dimock Center, the leading health and human services provider for Boston’s urban neighborhoods; former US senator William “Mo” Cowan, vice president of legal policy and litigation at General Electric who is also African American; Vanessa Calderon-Rosado, a Hispanic woman who serves as CEO of Inquilinos Boricuas en Accion, a critical Boston-based community-building organization; and Gunner Scott, a Massachusetts-based activist and the first openly transgender individual ever elected to a bank board in the US (the board has had two transgender members as of this writing, including one who transitioned while serving as a sitting corporator). “If you look at the new board members we brought on over the last several years,” remarks Knox, who served as lead director from 2009 to 2017, “there is a very concrete story that can be told about why each one of them represents a value added to the board.” As testament to how the bank has advanced its diversity practices on its board, in 2018 it announced the election of Deborah Jackson as lead director, succeeding Knox and becoming the first woman and second person of color to serve in that position in Eastern two-hundred-year history. Jackson, who is African American, joined Eastern’s board in 2002 and is the president of Cambridge College and former CEO of the American Red Cross of Massachusetts.

As a result of these various appointments, the atmosphere in the boardroom has become transformed. As Jackson notes, “When you walk into a governance meeting, you immediately notice a change visually. You can see the diversity in the room. There is now a diversified board with more women, African Americans, Asian Americans, and Latinos.”

Eastern’s advocacy around the issue of inclusion was also quite pronounced and carried through into the community. In 2013, Eastern was the first bank to sign the amicus brief challenging the Defense of Marriage Act. Hundreds of companies nationwide followed suit. The bank also affirmed its stance with a strong presence in the local LGBTQ pride parades, as well as with its naming of transgender board members.

Such moves and board diversification rankled some old-guard employees and board members. An employee in the finance department, a twenty-year company veteran, left because the bank’s advocacy on behalf of the LGBTQ community clashed with her religious beliefs. At one annual meeting where Rivers spoke about LGBTQ advocacy, an older white man in attendance sat with his arms crossed and shook his head vigorously for all to see. When Eastern named its first transgender board member, another board member called Rivers to complain bitterly and ultimately resigned from the board. In the face of such resistance, Rivers stuck to his commitment to not only appoint people of all backgrounds but also to affirm their inclusion and integration in the organization. “We, in the spirit of inclusion, follow a mandate,” he says. “Your religious beliefs are your own, but the minute your actions and words disadvantage or hurt anyone, our commitment to equal opportunity for all is our guide. They should not impact how people are treated in their jobs, how their work is evaluated, and how we hire. There are some people for whom this is just a step too far, and [if so] this probably isn’t the organization for them.”

The vast majority of company stakeholders applauded the appearance of new faces around the boardroom as well the bank’s explicit commitment to equality for all. Existing board members approached Rivers to indicate their appreciation, recognizing the benefits of a more diverse and active board as supporting the organization’s mission while also serving the bank’s business interests. Employees loved it too. For ten years running, the bank has appeared in the Boston Globe’s ranking of the area’s top employers. “What’s most important to us,” Rivers notes, “is the level of employee participation in the survey, in addition to the scores. Over 90 percent of our 1,900 employees participate. That’s off the charts and a solid indicator of our employee engagement.”

Among other sources of employee pride is the company’s “Join us for Good” campaign, launched in March 2017 to celebrate those who are making a difference and rally others to ignite a movement. In a series of inspiring online and television commercials, as well as on billboards flanking the Commonwealth’s major thoroughfares, Eastern presented powerful social justice images of “doing good” in the community, featuring pro-immigration themes or individuals draped in rainbow flags or at same-sex marriage ceremonies. Paul Alexander, the bank’s chief marketing and communications officer, who is African American and also vice chair of the Partnership board, summarizes Eastern’s employee reactions to the campaign: “Many said, ‘that’s my company. that’s why I’m proud to work at Eastern.’”


About the Author 

Carol Fulp is president and CEO of The Partnership, Inc., New England’s premier organization dedicated to enhancing competitiveness by attracting, developing, and retaining multicultural professionals. Prior to joining The Partnership, Inc., she held executive roles at John Hancock Financial, WCVB (the ABC-TV Boston affiliate), and the Gillette Company. In 2010, President Obama appointed Fulp as a US representative to the sixty-fifth session of the UN’s General Assembly. She lives with her husband, C. Bernard (“Bernie”) Fulp, in Boston. Follow her on Twitter at @Carol_Fulp and visit her website.