Financial Abuse and Chief Diversity Officers

2020-10-11 Financial Abuse (Max Kraynov)

Yes, It’s a Problem

  • Technically, any restriction of access to money as a means to change someone’s behaviour can be classified as abuse. There are parties that statistically have more funds and discretion to use them or withdraw access to them - typically they’re male, but there are cultures (e.g. Russian) where a wife would get all the money from her working husband and be fully in charge of the family funds, including giving allowances to her money earning husband.

  • Thus, still in 2020 some aspects of financial abuse can be attributed to the cultures.

  • It’s important to recognize that it’s a two-way road, so any attempt of one spouse to restrict access of another spouse to employment or obtaining of benefits is financial abuse, too. (Obviously, the decision of one parent to stay home with toddler-aged kids for financial reasons, i.e. the cost of daycare, hardly counts. This is a huge issue for working parents in Australia, for instance, where yours truly paid $2000+ per month to keep my youngest in daycare for 4 days a week.) However, any sabotaging of one partner of the other partner’s current employment or career prospects also counts as abuse.

  • There’s a completely different theme also counting as financial abuse – using online/mobile banking facilities in the unintended ways to deliver insults and abusive messages. An example of this would be sending several transfers of $0.01 with nasty messages (please use your imagination, I don’t want to give you this sort of ideas). While you can block someone on email / messengers / phone, you can’t block bank transfers, and (in the light of the World Mental Health Day that has just passed – 10 Oct 2020) any further abuse can be even more damaging. This is a widespread problem, according to Commonwealth Bank of Australia: they found 8000 questionable messages over the course of 3 months.

The solution

  • First and foremost, successful dealing with any type of abuse requires having a trusted party – someone the person can turn to. A good plan is thinking of someone early on, before the signs of troubles show up.

  • For the first type of financial abuse (depriving of funds or earning power) the solution is, unfortunately, to look for ways to fund one’s own life – government support, friends and family, or really anything the person is legally entitled to. The danger of it is that it’s the #1 reason why people re-enter their previous toxic relationships. And the Stockholm syndrome can easily be imagined into this picture.

  • When it comes to abusive messages via bank transfers, the solution is to contact the bank immediately. (Sadly, people don’t understand that such problems are more severe than they look.) This problem is generally recognized in the banking industry, and while in many jurisdictions banks can’t proactively raise this issue with law enforcement agencies to eliminate abuse (due to customer data privacy), they’d be happy to provide all the details of the bank transfer to be used as evidence. But banks can (and often will) close the offender’s account – no one wants a PR nightmare on their own hands.

Demand for Chief Diversity Officers is High, but So is Turnover (WSJ, 2020-07-13)

  • The job is in demand but has a quick revolving door (3-year tenure).

  • key concern is inability to institute change despite a mandate (but more often than not – no meaningful resources or teams) to do things ranging from more-equitable hiring/promotion to participation in product decisions.

  • It matters who the CDO reports to:

Legal —> focus on compliance

HR —> focus on hiring and promotion

Marketing —> focus on maintaining a public image

CEO —> that’s where things get really serious.

  • In companies with revenues of $3B+ the median CDO comp (including LTC + bonus) is $600k p/a with a base of $350k.