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The largest US financial institutions are sending a clear message: The pandemic has shifted into their rearview mirrors. After JPMorgan Chase & Co’s management appointments earlier this week, it was Morgan Stanley’s turn on Thursday to assign fresh roles to a line-up of potential successors to its chief executive officer (CEO).

Now that the covid storm is fading in the US, it’s only natural that the question is coming up now about who should succeed James Gorman, who has been in the job for 11 years. But while Gorman’s executive rejiggering might be a textbook example of ensuring business continuity and a smooth hand-off to the next generation—still a rarity among European banking peers—there’s one glaring deficiency in his largest shake-up in more than a decade: a lack of diversity that could significantly hurt in the future.

In a lineup that has been all too common in banking—and especially Wall Street—four [Caucasian] men are now in the lead to potentially succeed Gorman. As my Bloomberg News colleague Sridhar Natarajan reported, Morgan Stanley named Ted Pick, who helped revive Morgan Stanley’s trading activities, and Andy Saperstein, who propelled the firm’s wealth-management business, as co-presidents, the most likely to succeed Gorman. Dan Simkowitz, investment management chief, was promoted to co-head of strategy alongside Pick, and Chief Financial Officer Jon Pruzan will become chief operating officer.

To be sure, there is a nod at diversity, with a woman also receiving a promotion. Sharon Yeshaya, the head of investor relations, will become CFO, but it will be a while before she can prove herself sufficiently to have a chance at getting the top job because she has not run an operating unit so far.

To Gorman’s credit, Morgan Stanley is a well-run company, regaining its stride under the Australia-born leader after the financial crisis-era wobbles. The executives he has promoted are well established in their positions, and it should be business as usual from here. Gorman spent the best part of a decade reining in risk while expanding wealth management. Last year, he pulled off not one but two large acquisitions—E*Trade and Eaton Vance—cementing the firm’s diversification away from volatile trading toward fee-generating businesses.

In the meantime, Morgan Stanley has been regaining market share in investment banking. The firm is in the top three in equities underwriting and a leader in mergers and acquisitions. Its shares have more than tripled from their post-pandemic trough to the highest in decades.

Still, the turnaround hasn’t been all smooth sailing. The $900 million hit Morgan Stanley took on the implosion of Archegos Capital Management in March made it the only large US firm to lose money on the blowup. The surprise disclosure only weeks after the losses were incurred also raised some concern about how Morgan Stanley has been managing the business and expanding in pockets of trading. Its earlier bets on some foreign-exchange derivatives had also backfired as the financial firm expanded aggressively in that space.

Only time will tell whether the Archegos episode remains an unfortunate but easily surmountable blunder. Compared with many peers, Morgan Stanley has managed to tread on fewer big landmines. So far, the firm has said it doesn’t plan to retreat in prime brokerage, the unit that caters to hedge funds and where the losses stung.

But in an era in which executives are being judged not just for their ability to turn a profit, but also for their firm’s role in society, a lack of diversity among senior managers in a position to lead the firm in the future does not look good. Contrast Morgan Stanley’s top CEO candidates with JPMorgan’s, where two women are competing head to head for the No. 1 job. While the potentially combative set-up isn’t ideal, at least there has been a concerted effort to groom a CEO beyond the usual suspects. Improving diversity is an urgent task Gorman needs to tackle well before his successor takes over, if the data is anything to go by. As of 2018, the firm’s most recent numbers, of about 1,700 executives, just 23 were African-American men and 14 were African-American women. Women held about 18% of those jobs. And the firm’s operating committee is still dominated by Caucasian men, as is the next level of management, where 60% are Caucasian men.

It’s not the image the highest-paid bank CEO in the US would want to be remembered for, surely. Before Gorman heads into the sunset—he told the board he plans to stay at least three more years—there’s plenty of unfinished business he needs to take care of.

Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance.

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