Marc King’s latest Instagram post is a quote from Dr. Suess – “You have to be odd to be number one.”
But King’s elevation to Keller Williams president this week isn’t odd in one way – he’s a white man. King also replaces a white man, the abruptly departed Josh Team, and reports to another white man, Carl Liebert, the CEO of the brokerage’s holding company, KWx.
These moves were orchestrated by another Caucasian male, Gary Keller, the brokerage’s co-founder and executive chairman. Keller, in turn named another white man, Matt Green, new head of agent and partner experience, and recruited Chris Cox, a white man, to helm technology and digital.
Some of Keller Williams’ own agents slammed the white male musical chairs.
“All white guys,” Christopher Paul, a Keller Williams agent in Southern California, said in an Inman News Facebook thread Tuesday. “There is incredible talent that also includes diversity out there. But no. The good old boy strategy still at play. This was an opportunity missed.”
So, did Keller Williams make an unforced error?
The answer partly lies in the brokerage’s mysterious and still unfolding executive turnover.
But Keller’s diversity shortcomings at the top of the organization are an issue at most big residential brokerages. The crux, say those who study diversity in brokerages, is twofold: The real estate industry’s legacy of racism and discrimination, and an uneven gender power dynamic.
The National Association of Realtors’ most recent member survey was done in 2017, and found that 64% of agents and brokers identified as female, and 34% as male. Those numbers reflect a longstanding dominance of women in residential real estate.
“Residential real estate attracted women because it has the flexible hours that corporate America traditionally didn’t have,” said Suzanne Hollander, a professor of real estate law at Florida International University, who also advises at the school’s Office to Advance Equity and Diversity. “There are also low barriers to entry.”
Many female real estate agents head local franchisees and helm executive positions.
In fact, 55% of all Keller Williams’ franchise operations are headed by women, the company stated in response to questions for this story. Keller Williams currently has multiple female executives including Ann Yett, its chief financial officer for the last 15 years, and Mo Anderson, a vice chair who had a 10-year stint as CEO that ended in 2005. In the past, Mary Tennant held the role of president between 1995 and 2014.
Several other brokerages mirror Keller’s current setup, with men in the very top positions but female CFOs (and divisional vice presidents).
These include Compass, where Robert Reffkin is CEO and Kristen Ankerbrandt serves as CFO, and Realogy, with Ryan Schneider as CEO and Charlotte Simonelli CFO. RE/Max leadership includes CEO Adam Contos and CFO Karri Callahan.
During earnings calls, CFOs give granular details about a company’s revenue and expenses. CEOs explain what the numbers mean.
“The male leadership is odd indeed, [due to] the lower echelons [being] female dominated,” said Gilles Duranton, a professor of real estate at the University of Pennsylvania.
Residential real estate, Hollander said, has a greater obligation to put women in executive positions due to the sheer number of female professionals.
“In corporate America there is an old boys club, but we shouldn’t have that in an industry that is 64% women,” Hollander said.
Keller Williams sharply disputes the idea that an inner sanctum of men dictates company policy.
“As a company, we are by agents for agents,” said company spokesperson Darryl Frost. Big decisions, Frost added, are done in consultation with committees like the Social Equity Task Force, created last year by the company’s International Associate Leadership Council meeting.
“You go to conferences,” said one California real estate broker, “And the landscape is still white, white, white. You’d think you were in a snowstorm.”
That same NAR survey found that 80% of members identify as white, 10% as Hispanic, 6% Black, and 5% Asian, with some respondents identifying with multiple races. Those numbers are backed by U.S. Census Bureau statistics, which report that less than 6% of all real estate agents are Black.
In addition to minority under-representation, residential real estate is still reckoning with reports – such as a Newsday exposé in Long Island in 2019 – that overt racial discrimination persists, as well as the legacy of redlining, which has limited the economic mobility of millions.
Executive leadership at the biggest brokerages is not entirely without minorities. Robert Reffkin, the CEO of Compass, is Black, and has used his platform to focus on economic inequality among races. Last June, for example, the Compass CEO appeared on CNBC and instructed that the companies’ real estate agents spend 15% of their work-related expenditures on black-owned businesses.
Compass, however, appears to be the exception. The nation’s two largest brokerages, Realogy and Berkshire Hathaway Home Services, are headed by white men.
For example, Berkshire Hathaway Home Services has a white male chairman, CEO, executive vice-president for business development, and CFO. The company noted in a statement that it has a vice president for diversity and inclusion in Teresa Smith, and “are laser focused on implementing training programs” including “leadership training that foster diversity, equity, and inclusion.”
Realogy’s Chief People Officer Tanya Reu-Narvaez also emphasized training, though she focused specifically on recruiting minority leaders.
Reu-Narvaez, a 19-year-veteran at Realogy, acknowledged that Black, Hispanic, and Asians have been “severely underrepresented” in residential real estate. She pointed to a program started last year to provide financial incentives and mentorship to non-white real estate professionals who wish to helm brokerage franchises.
That real estate still lacks in minority leadership is unsurprising, said Duranton of Penn.
“Not that this is right, fair, or equitable, of course,” Duranton said, but high-volume brokerages make money selling expensive houses, “And these expensive houses are typically in rich, white neighborhoods, and people typically want a broker that looks somewhat like them.”
Added Duranton, “You run the business when you bring in a lot of money.”
Hollander believes the lack of leadership starts with the absence of any education pipeline bringing Blacks and Hispanics into the profession, or making minority leaders in other occupations aware of real estate.
There are few real estate schools, Hollander noted. It’s a word-of-mouth profession “no one ever told them about.”
Keller’s next moves
“Obviously, Keller Williams knows that diversity is important, because they have all those diverse pictures on their website,” Hollander said, noting an unidentified Black woman adorning the company’s “About Us” page.
Industry insiders have struggled to make sense of Team’s departure. It came less than a week after Team took centerstage at the company’s live streamed annual meeting. The news was first delivered not in a company statement, but by Team himself, on the erstwhile executive’s personal Facebook page.
“From what I see, the people elevated now are veteran brokerage guys,” said Steve Murray, co-founder of RealTrends, which is owned by HousingWire. Team – like Liebert, who was brought in just four months ago – had no prior experience in real estate.
Murray speculated that Gary Keller was at least aware that his brokerage’s latest leadership shakeup could receive blowback.
“Gary is a very bright guy,” Murray said. “He’s in touch about what’s going on in the world.”
Frost, the Keller Williams spokesperson, said that “diversity and inclusion is an absolute priority for Keller Williams,” important factors, “That remain in the consideration set when we hire.”
Keller Williams may soon have a chance to show such words – and images on its website – mean something. Sources within the company said this past week that more executive hires are on the way.
As another recent Marc King Instagram post put it, “May the next few months be a period of beautiful transformation.”