By Ann Saphir

(Reuters) – The search for the two top U.S. central banksers is about to begin. This will serve as a test of what has become a rallying cry for advocates of diversity, that boards do matter.

After public outrage over the personal securities trading of Robert Kaplan and Eric Rosengren, President Boston Fed Jerome Powell pledged that he would seek diverse candidates to fill in for their jobs.

The Fed Governor Lael Mindard, and Janet Yellen (ex-Fed Chair), have made significant changes to their boards.

In all twelve regional Fed Banks, 51% are female directors and 48% are from minorities.

It’s a much larger group than the typical U.S. company board and it marks a significant change in Fed policy from just a few decades ago. Fed insiders believe the boards makeovers serve two purposes: to gain broader insights on the economy, and to allow for a greater selection of regional bank presidents to be found.

Graphic: On Fed bank boards, some classes more diverse than others, https://graphics.reuters.com/USA-FED/DIVERSITY/qzjpqgxdgpx/chart.png

Kaplan was one of the few white directors who got the job at Dallas Fed in 2015.

Half of the directors that could be involved in Kaplan’s replacement are female. A quarter of them are from minorities.

In 2007, Rosengren was appointed to the Boston Fed Board. The board consisted of two white women and one black member.

Four of six directors responsible for selecting a new Boston Fed President are women this year. Two directors are from minorities.

Critics worry that it isn’t enough.

Rosengren was an economist and had been working at the Boston Fed for many years before being chosen to be its chief. Kaplan, though not a Fed veteran, had a lengthy career working on Wall Street for Goldman Sachs (NYSE :). He was also a director of the Dallas Fed’s search firm.

“The problem is that it’s a very insiderish process for selecting some of the most important leadership in the Fed,” says Benjamin Dulchin, director of the Center for Popular Democracy’s Fed Up campaign who helped author a study showing Fed board directors tend to represent financial institutions or big business, rather than more typical American economic pursuits.

The Fed may have to look beyond the current search round for qualified candidates if it is able to focus its diversity efforts. On one hand, you can count how many Blacks are among hundreds of Fed economists.

Raphael Bostic is currently the U.S. Fed president and was the sole Black policymaker. However, he has been a University of Southern California professor since the 1990s.

Neel Kazhkari, Minneapolis Fed chief, is the only minority of 18 Fed rate-setting officials. He had never been affiliated to the Fed before. Three of the other Fed bank presidents are women, and all the others are men.

Washington Fed Board members are selected by the White House. The lineup at the board is less diverse. Six of the six members are white while only two women are on it.

Graphic: Fed bank boards are increasingly diverse, https://graphics.reuters.com/USA-FED/DIVERSITY/oakpeymbgpr/chart.png

Boston and Dallas did not provide any details on their plans for searches. Boston, however, said Friday that they had a board with “a wonderful mixture of individuals” but added that the search committee is “committed and committed to doing an excellent job with openness, breadth and rigor.”

Fed Banks typically seek a new chief from a hiring committee led by their chair and advised by an external search firm.

Fed’s Washington-based Board offers input and provides final approval.

The process is only open to non-banker directors, six out of nine members on each bank’s board.

The six chosen are to represent America’s public at the central banking institution. One-half are selected by member banks while the Fed Board selects the other half. The three remaining members are bankers and chosen by the member banks as representatives of banks.

BOSTON

One Black man and one white woman lead the board of directors at this bank.

The board chair Christina Hull Paxson is Brown University’s president depuis 2012. A economist, her research interests include children’s health and economics.

Corey Thomas (the deputy chair) runs Rapid7 Inc., a cybersecurity company. He is also the chief Black officer of an publicly traded Massachusetts company.

Roger Crandall is the Massachusetts Mutual Life Insurance CEO for over a decade. As the majority of Fortune 500 chief executives, Crandall is white.

Lizanne is the CEO of Talbots Women’s Clothing Retailer, which is owned now by Sycamore Partners. Her parents were Danish.

Kimberly Sherman Stamler, president of Related Beal is a real estate developer.

Lauren Smith was the first chief equity officer and strategist at the CDC Foundation. A former pediatrician, Smith is now the Massachusetts medical director of public health.

DALLAS

The board of directors at the bank is headed by two white men.

Greg Armstrong was the chair of the board and ran Plains All American Pipeline LP from its inception until his retirement. He continues to be a director.

Thomas Falk was the vice chair and ran Kimberly-Clark Corp, (NYSE:), from 2002 through 2019.

Claudia Aguirre serves as president and chief executive officer of BakerRipley. BakerRipley provides community and education services to Houston. Her parents were Mexican.

Cindy Taylor, who has been the CEO and president of Oil States International (NYSE 🙂 Inc. since 2007, is a pioneer in energy services.

Renard Johnson founded and is the CEO of METI El Paso, a professional service company.

Smith Graham, an investment management company founded by Gerald Smith (NYSE:), was established in 1990.