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US FDIC Report Reveals

US FDIC Report Reveals "Good Ol' Boys Club" Culture

by Starling Insights

Starling Insights Editorial Board

May 13, 2024


Last week, the US Federal Deposit Insurance Corporation (FDIC) published the results of an independent review of its culture, which labeled the agency a "good ol' boys club" rife with favoritism and insularity. The FDIC commissioned the report late last year after a bombshell report about rampant sexual harassment and discrimination among its employees.

The report, conducted by law firm Cleary Gottlieb, highlighted widespread instances of sexual and racial harassment, with over 500 current and former employees interviewed. FDIC Chair Martin Gruenberg acknowledged the report's findings in an internal memo, pledging to implement its recommendations. Those recommendations included appointing an internal leader for cultural transition, hiring an external auditor to monitor progress, and implementing various other changes to policies and procedures.

However, Gruenberg himself has faced criticism for his alleged "angry" leadership style and short temper. According to the report, the duration of Gruenberg's time as Chair and the allegations made against him "may hinder his ability to establish trust and confidence in leading meaningful culture change." This is made worse, the law firm argues, by his "apparent inability or unwillingness to recognize how others experience certain difficult interactions with him." 

Lawmakers, including Republican Rep. Patrick McHenry and Democratic Rep. Bill Foster, have since called for Gruenberg's resignation in light of the report's findings. "The independent report released today details his inexcusable behavior and makes clear new leadership is needed at the FDIC," McHenry said. However, Democratic Senator Sherrod Brown stopped short calls demanding resignation, emphasizing the need for Gruenberg to take responsibility and enact fundamental changes. 

Gruenberg said he remained committed to fostering a workplace where all employees feel safe and respected. "Hundreds of our colleagues reported painful experiences of mistreatment and feelings of fear, anger, and sadness," Gruenberg wrote. "I accept the findings and recommendations of this report and thank the special review committee for their exhaustive work."

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