This post first appeared on the Securities Arbitration Alert blog. The blog’s editor-in-chief is George H. Friedman, Chairman of the Board of Directors for Arbitartion Resolution Services, Inc.
FINRA Dispute Resolution Services (“DRS”) has updated its neutral roster diversity statistics, showing impressive gains in most areas.
FINRA DRS launched an annual Neutral Roster Demographic Survey in 2016. Recall that this is an annual, voluntary, and confidential survey of neutrals that FINRA relies on to keep its diversity statistics accurate and up-to-date. DRS promises to publish annual survey results toward the beginning of each year and, true to its word, the Authority on December 22 posted updated 2022 demographic survey results.
In Short: Much Progress is Being Made
To track progress, FINRA: “hired a third-party consultant to survey – on an anonymous and voluntary basis – the demographics of the neutrals on our roster from 2017 to 2022. In sharing the findings, FINRA strives to provide transparency about the current makeup of our arbitrator roster. In 2022, we saw increases across a number of categories ….”
Results in the Past Year
What are the results? In a letter to the editor published in SAA 2022-48 (Dec. 22), Dispute Resolution Services’ Associate Director, Recruitment and Training Nicole Haynes said (ed: the chart is in her letter): “the results of the 2022 arbitrator demographic survey demonstrate that FINRA continues to make progress on the diversity front, particularly with respect to gender. To truly illustrate the results of FINRA’s recruitment efforts, highlighted below is a comparison of the newly added diverse arbitrators who joined the roster in 2015 and 2022.
| FINRA Arbitrator Demographic Survey ResultsFor Arbitrators Added Within the Past Year | ||
| 2015 | 2022 | |
| Female | 26% | 47% |
| Black or African American | 4% | 20% |
| Asian | 2% | 5% |
| Hispanic or Latino | 17% | 5% |
| Multi-Racial | 7% | 6% |
| LGBTQ | 3% | 9% |
Adds Ms. Haynes: “FINRA has seen a huge increase in the number of applications that we receive each year, as well as an increase in the diversity of FINRA’s arbitrator roster. Notwithstanding this success, our efforts to further diversify the arbitrator roster is ongoing. FINRA will continue to aggressively recruit new arbitrators and continue to devise innovative strategies to expand the reach of our recruitment efforts in order to meet the needs of our constituents.”
A Multi-year Lookback
We decided to look back to see what’s changed over the last several years. The headlines? The roster has definitely become more diverse, albeit slightly older. We’ve compiled the results in the chart below (ed: numbers in groups will not always total 100%*):
| Panel Demographic | Pct in 2022 | Pct in 2017 |
| Male | 65% | 72% |
| Female | 33% | 25% |
| Caucasian | 76% | 84% |
| African-American | 12% | 6% |
| Spanish, Hispanic or Latino | 5% | 4% |
| Asian | 3% | 2% |
| Multi-racial | 4% | 2% |
| American Indian or Alaska Native | 0% | 0% |
| LGBT | 5% | 2% |
| Age 60 or less | 29% | 29% |
| Age 61-69 | 29% | 27% |
| Age 70 or older | 42% | 39% |
FINRA: We’ll Keep at It
The Authority states: “While we are encouraged by these short-term results and incremental progress made, we recognize this is a long-term effort and our work is ongoing as we remain fully committed to achieving our diversity goals.”
(ed: *Since the age category covers all ages, the 2017 total should be 100% (as is the case for the other years). It adds up to only 95%, however. The explanation? In the earlier years, arbitrators did not have to answer a question in order to proceed to the next question. As a result, some of the categories do not always add up to 100%. Later, FINRA started adding the option “Prefer Not to Answer,” thus forcing a response so the category totaled 100%. **Kudos to DRS for making this data public. ***DRS separately surveyed mediators; the results are similar to those for the arbitration panel, although the roster is older – 49 percent of those responding were 70 or older. ****DataStar conducted the 2021 and 2022 surveys. Consulting firm Alight Solutions conducted the surveys from 2017 to 2020. *****The response rate was 31%, about the same as last year.)
