The Value Gap: The tech industry has a ‘moral imperative’ to take action on inequity, new Silicon Valley leader says

“Maybe, just maybe, I’m the guy,” Thomas, who was most recently a Barclays BCS, +2.59% investment banker, told MarketWatch in an interview. He spoke about what he brings to his position at SVLG, the policy-advocacy group founded by Hewlett-Packard co-founder David Packard, which now has more than 350 member companies that include some of the biggest names in tech and business.

Thomas also addressed questions about how the tech industry can help close racial and wealth gaps that are particularly pronounced in the valley, where 13% of households hold more than 75% of the region’s wealth, according to the Silicon Valley Index.

This interview, the latest installment of The Value Gap, has been edited for length and clarity.

MarketWatch: You’re the first African-American CEO of SVLG. Can you talk about the significance of that during this time?

Thomas: I’m California-born and raised, a small-town kid from Lompoc who grew up in a military family. My dad is a Vietnam vet, Air Force vet; my mom a retired RN. She’s from the Caribbean, a West Indian from Trinidad [and] Tobago, and my dad is from rural Alabama. He was born and raised in the segregated South.

My family obviously had a different set of life experiences than me; I’ve been so fortunate in many ways. It has really imbued in me [a] sense of identity, purpose, and I hope a real sense of authenticity in understanding what it feels like to be on the outside looking in to opportunity, prosperity and success. As a small-town guy, I’m here in the tech capital, and I still sometimes feel like a fish out of water seeing the magnitude of opportunity that we have here. It’s incredible.

I went to Cornell and studied business and government, where I met my wife, and then grad school for public policy at the London School of Economics, then straight out of grad school to Sen. Dianne Feinstein’s office.

Sen. Feinstein has been the largest and most profound influence in my professional life and career. I became a senior member of her staff during the Great Recession. The confidence she had in me, whatever she saw in me — if you think about a Black executive and the type of deep confidence you need to put yourself out there, for these types of positions, you have to believe you can do it and believe you belong. I can’t say enough about her.

For the past 10 years, I’ve been working at Barclays. My role has been focused on public-sector and social-impact banking, first leading Silicon Valley and California coverage, and then most recently our social-impact work on the West Coast. I have a background that is unique, clearly a set of unique experiences as a Black American is part of this. I’m also a business executive, which might not be typical for a position like this. But I have cross-functional expertise, which is understanding politics and policy.

What drew me to this role is the moment that is unique, and I believe an opportunity that is very limited. Our companies must capitalize on this, from a business standpoint, for revenue, for competitiveness, and also there’s a moral imperative. We’re working on innovative proposals and ideas, steps our member companies can collaborate on and take to drive change. We have more than 350 of the biggest and most influential companies not just in Silicon Valley but the world — if we get 116 of them to get on board with the type of change we’re talking about, it is going to change corporate culture in America.

And that’s why I left a very comfortable investment-banking job to make the transition.

MarketWatch: For years, Silicon Valley tech companies have said they’re committed to diversity in their workforces. But as we know, the changes they’ve made have been incremental, and the numbers show it. How can SVLG help?

Thomas: We have a moment of moral reckoning in this country. [Democratic vice presidential nominee] Sen. Kamala Harris has spoken to this. A realization of the many inequities in our society. I believe there is a finite window to act. The theme is moving with alacrity, a sense of urgency, because all I know is what I’ve seen with my two eyes. I’m not young. If these moments are not capitalized upon, we revert to the status quo. We cannot allow this moment of reckoning in our country to pass without taking action.

Again, there’s a moral imperative. But I’m here to ensure the competitiveness and strong business climate in our region and the success of our member companies. I’m a revenue-oriented business person. It’s critical to the bottom lines of my companies to lead and excel in this area.

What’s different today? We have two things to do: We need to hire more Black executives and employees, from the C-suite down. We need to fund Black entrepreneurs. The same holds for Latinx and Native Americans.

I’m fortunate to be dealt a very strong hand of very influential executives. So as we think through solutions, we are starting top-down at the executive level because that’s where we have access and ability to move with alacrity to see change.

I was very blunt and direct with Jed York [the incoming chair of SVLG and owner of the San Francisco 49ers] when he asked me my thoughts on diversity. I was heartened and very pleasantly surprised that I did not need the numbers, data and supporting information that I had at my fingertips to make my case about why it’s necessary. Because he asked me, “How do we do it? I’m on board.”

As I talked to other members of the board, the question was not why, how, “well, let’s write some letters and in three years come back to this” or something.

It was [former SVLG CEO] Carl Guardino who recognized this as a priority, and he has already put a committee of 87 executives in place. I didn’t expect that — and I’ll be honest about it, I was extremely heartened by that. And that is why I’m having these conversations today, and I’ve got a set of life experiences, maybe, that allow me to speak more bluntly and directly about it. What I hope the executives and board members and members of our community take away is that they have someone authentically committed to driving change.

Maybe, just maybe, I’m the guy who can speak to the business executives and our community leaders, and when they hear me, they know I’m not just talking — I believe what I’m saying.

MarketWatch: What about diversity beyond the workforce? Critics of some of your member companies, for example Facebook Inc. FB, -0.44% and Palantir Technologies Inc. PLTR, , say those companies’ policies actually hurt minorities. (For example, Facebook is currently under fire for failing to remove posts that were flagged as calls to violence in Kenosha, Wis., until after protesters there were killed this week. And Palantir has long been criticized by activists over its work with immigration authorities.) How can SVLG help encourage those companies to think about diversity in a holistic way?

Thomas: Carl [Guardino] deserves this credit. He moved to formalize racial and equity issues as a platform. We have 87 executives focused on this. Every decision we make, every policy, every proposal that we view, there is now a lens to what the corollary impacts are.

We will have open dialogue first behind closed doors, being very direct in what I see and where I believe there is support for change. Once we’ve had these conversations, we will collaborate and find ways to support our companies and make the changes we can.

Driving change and a reorientation of thinking in very large organizations takes time. But I tell you what, if we get executives and managers in these roles who look different and have a different set of life experiences, I bet you they will pick up on some things others may not have.

These are not issues to be resolved tomorrow, but it’s urgent and critical that action is taken soon. On our board there is strong support for a structured approach that is mindful of competitiveness and our place in society.

MarketWatch: What about the criticism against companies that have a two-tier wage system for their workers, such as gig companies that employ many independent contractors who California law says should actually be classified as employees? The employment status of gig workers contributes to racial and wage gaps.

Thomas: We sent a letter to California Gov. Gavin Newsom urging him to work with gig-economy workers and Transportation Network Companies (TNCs) to fashion a resolution that allows drivers to remain independent while providing them the benefits, rights and protections available to all workers under state and federal law.  The potential for significant job losses and harm to our state’s economy during this challenging time are of very serious concern. Both Uber UBER, +2.60% and Lyft LYFT, +2.99% are SVLG member companies.

MarketWatch: Housing inequality is a longtime problem in the valley and is being exacerbated by this pandemic. According to one estimate, more than 40,000 households in Silicon Valley risk eviction during this economic crisis. What is SVLG’s role when it comes to housing?

Thomas: One of the selling points in bringing me in as a business executive who does have a policy perspective is that I’ve worked in infrastructure for the past 10 years.

As I presented to the SVLG board, it’s about continued policy leadership related to permitting and environment and all the issues that allow projects to be in a position to be placed online, coupled with market-based solutions. Housing is a great example because these are revenue-generating and revenue-sustaining projects.

There is a social-impact investing movement in this country. I’ve been part of this, having led a deal of the year in social impact.

There is far more money sitting in these funds that need to be earmarked for high-impact projects than actual projects. At SVLG, we should be working to connect the dots — between our elected officials and the projects that are shovel-ready and high impact, between our member companies that have impact funds of their own, between large institutional investors that are looking to put impact dollars to work.

These can be issued tax-exempt; there are a lot of ways to structure it. Affordable housing is an example. There are innovative ways to use impact investment and dollars to get projects funded, and Mayor Sam Liccardo is a leader around this thinking with his affordable-housing initiatives in San Jose.

This is where I hope to bring my experience in the private sector to bear. I believe, based off feedback I received, that this was a big component of why I was hired: understanding how infrastructure is financed and funded.

MarketWatch: How does SVLG plan to tackle education and transportation as ways to address economic inequality in the valley?

Thomas: We are deeply engaged in the work to diversify the STEM pipeline, and it starts at the K-12 level with some of our elementary-school programs as well as our Leadership Summits, where young men and women have a chance to engage with successful tech leaders who can inspire them to achieve. 

At the next level, our Community College to Career Initiative has been a major priority for us. Nearly 80% of community-college students are minorities, and more than half are women. Community College to Careers connects our 350-plus member companies with 19 community colleges in Silicon Valley for quality career positions that do not require a four-year degree. We also know that community colleges provide nearly half of the University of California system’s STEM students — investing in our community colleges today means more Black and brown tech business leaders tomorrow.

Regarding transportation, SVLG has adopted racial justice and equity as a pillar of our organization. That means when we evaluate any infrastructure issue or bill, we do so with a lens looking at the impact it has on our minority communities. Transportation is a critical area for equity and inclusion. How we get where we go affects our opportunities in jobs and housing, so our transit system must have frequency, affordability and connectivity.

Frequent transit is more equitable transit: Not every member of our community is on a 9-to-5 work schedule at a desk, so having more frequency during what are considered “off hours” in the early morning and in the evening levels the playing field for many workers. This is why we take part in advocating for CalTrain and BART extension and service expansions through ballot-initiative campaigns and working with public officials. Highly connected public transit can induce density that can help make housing more affordable — this is happening now in and around new and future BART stations in San Jose.

Also, how we travel affects the air we breathe, and we know minorities are disproportionately affected by pollution.

MarketWatch: What is your approach to this emergency that we find ourselves in — this pandemic?

Thomas: When we talk about impact, one of the components to that is immediate impact. Under Carl’s leadership, we’ve raised almost $9 million for COVID relief funds and PPE. We are a key part of the recovery task force [in Silicon Valley]. Simply put, we must continue that work.