Wells Fargo's CEO apologized for blaming the company's lack of diversity on 'a very limited pool of Black talent.' Here's why that attitude is pervasive and harmful to workers.

• Wells Fargo CEO and president Charles Scharf issued a public apology Wednesday following a report by Reuters citing racially insensitive comments made by the executive.
• Scharf said that the bank had trouble reaching its diversity goals because there was not enough qualified minority talent, according to Reuters.
• It's important to discuss why that argument is false and damaging to the Black community, as well as to other marginalized communities.
• "There is Black talent available at the entry, middle management, and senior leadership levels for any company in any industry," Christie Lindor, CEO of diversity, equity, and inclusion consultancy Tessi Consulting, told Business Insider.
• The real problem is racist behaviors and practices that ultimately prevent the recruitment and retainment of Black talent, Lindor told Business Insider.

Wells Fargo CEO and president Charles Scharf issued an apology on Wednesday after a report by Reuters cited racially insensitive comments made by the executive.

In a Zoom meeting this summer, Scharf said that the bank had trouble reaching its diversity goals because there was not enough qualified minority talent, two participants on that call told Reuters.

That same message also appeared in a memo that the CEO sent out.

"While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of Black talent to recruit from," Scharf said.

On Wednesday, the CEO wrote, "I apologize for making an insensitive comment reflecting my own unconscious bias. There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise."

Scharf is certainly not the only executive who implied that the reason there isn't more diversity is because there aren't enough diverse applicants. He's just one of a few that have been caught publicly saying it.

Greg Glassman, the founder and CEO of CrossFit, resigned in June over inflammatory comments he made about the Black Lives Matter movement. Michael Lofthouse, CEO of Solid8, a cloud computing firm based in San Francisco, resigned after video surfaced in July of his racial tirade against an Asian family.

While issuing an apology is a step in the right direction, it's important to address why his comments are wrong and damaging.

The argument that there isn't enough Black talent or talent from marginalized backgrounds is just plain false, diversity, equity, and inclusion (DEI) strategists tell Business Insider.

"There is Black talent available at the entry, middle management, and senior leadership levels for any company in any industry," said Christie Lindor, CEO of DEI consultancy Tessi Consulting.

She is the author of the forthcoming book, "Why great people quit good jobs: 10 ways to create a progressive, high performing, and radically inclusive culture."

The real problem is racist behaviors and practices that ultimately prevent the recruitment and retainment of Black talent, Lindor told Business Insider.

There is plenty of Black talent. Companies are just not working hard enough to recruit, cast a wide net, and incentivize people to leave existing jobs and/or relocate.

Cheryl Ingram, CEO and founder of DEI strategy consultancy Diverse City, agreed.

"Wells Fargo's leader needs to understand that majority white companies often have limited access to minority populations for a number of systematic, institutional, and individual reasons," she said.

For example, when it comes to referring people in the recruitment process, consider that three out of every four white people don't have any Black friends. Or take a look at bias in hiring. Research has shown that hiring managers favor résumés with white-passing names.

And then there's retainment.

Black and brown people are also much less likely to have a work sponsor, or someone who champions them in conversations that decide who gets promoted, research shows. People are more likely to mentor those with whom they have more in common, experts said.

Ingram called on the bank to practice more anti-racist practices in recruiting and retaining Black employees.

"If you're not contributing to the problem to stop it you are a part of it," she said.

As part of Wells Fargo's apology statement, the bank promised to increase its efforts to reach out to diverse talent.

Tiffany Jana — diversity, equity, and inclusion strategist and co-author of the book "Subtle Acts of Exclusion" — said posting a job opportunity online and hoping Black talent come to you is not a viable recruitment strategy.

"The competition for Black talent is fierce, so the companies that are winning are the ones who demonstrate how much they value Black talent by closing the compensation gap between Black and white employees," Jana, who uses they/them pronouns, told Business Insider.

"There is plenty of Black talent. Companies are just not working hard enough to recruit, cast a wide net, and incentivize people to leave existing jobs and/or relocate," they said.