Survey Says Companies Still Lagging on Diversity

This post was originally published here.

The U.S. will be a majority-minority nation in the coming decades, but you wouldn’t guess it by looking at the gender and minority representation among the top executives and corporate boards of America’s most successful companies, according to the just-released 2017 Corporate Diversity Survey from U.S. Senator Bob Menendez of New Jersey.

According to the Pew Research Center, the percentage of the U.S. population comprised of non-Hispanic whites will decline from 62 percent today to 46 percent by 2065. At that point, Pew estimates that the country will be approximately 24 percent Hispanic, 14 percent Asian, and 13 percent African American.

Little progress since 2010

But in Menendez’s survey of the Fortune 100 (with 61 companies responding), white men continue to represent the majority of corporate board seats at 50.8 percent and 53.4 percent of all executive team positions. Women comprised 25.3 percent of all executive team positions and racial or ethnic minorities represented 16.3 percent.

African-Americans held 10.9 percent of corporate board seats, Latinos 4.9 percent and Asian-Americans 3.6 percent. Native Americans did not hold a single board of directors position among the sampled companies. Women of color made up 5.6 percent of corporate board membership.

“Our survey results suggest that progress on diversity has been sluggish at best,” Menendez said in releasing the report Dec 12, adding that women and people of color only saw an average two to five percent increase in overall representation since 2010. “While these numbers demonstrate tangible progress, we cannot lose sight of the fact that women are half of the country’s population, people of color are more than a quarter, and the nation is only growing more diverse.”

Make diversity numbers public

Menendez, chair of the Senate Democratic Hispanic Task Force and the highest-ranking Latino in the U.S. Congress, has long championed corporate diversity; this the fourth such survey undertaken by his Senate office. Of course, Menendez’s own conduct has caught plenty of attention over the past few years.

The senator has faced his own clashes, largely over ethics. He was indicted on federal corruption charges in 2015 for allegedly accepting hundreds of thousands of dollars in gifts and bribes, although his trial ended last November with a mistrial. The Justice Department dropped the charges in January 2018. The Senate Ethics Committee, however, admonished Menendez in April. In a closely watched race, he managed to win his third term in the Senate in the mid-term election with 54 percent of the vote in a blue state that has not elected a Republican senator since 1972.

Transparency and accountability, however, are at the center of Menendez’s mission when it comes to corporate diversity. His survey noted that only 37.7 percent of the companies sampled have numeric targets for diversity at the executive team level and only 11.5 percent set specific targets for diversity on their Board of Directors.

Menendez was joined by Cedric L. Richmond, chair of the Congressional Black Caucus, Judy Chu, Chair of the Congressional Asian Pacific American Caucus and Joaquin Castro, Chair-elect of the Congressional Hispanic Caucus (who is said to be making a Presidential run in 2020) in co-signing a letter to the U.S. Equal Employment Opportunity Commission (EEOC).

They are asking that the EEOC, which conducts a wide-ranging survey of every employer in the U.S. with 100 or more employees, to make public any data categorized by race, ethnicity, and gender for executive and senior-level officials and managers for America’s 500 top-performing companies, beginning in the year 2000 and every year going forward.

“We believe public information and transparency are the first stepping-stones towards a more inclusive America,” the legislators wrote.

AT&T’s diversity chief says work not done

In a press call presenting the survey’s findings, Menendez was joined by Chu, Castro, Corey Anthony, Chief Diversity Officer for AT&T, Idalia Hill, Communications Lead for the CEO Action Network and Cid Wilson with the Alliance for Board Diversity.

“You absolutely have to have commitment throughout your organization, from the very top to the employees who are interacting with the customers,” Anthony said, noting that AT&T CEO Randall Stephenson has set “clear expectations” around four pillars for diversity and inclusion and AT&T publishes an annual Diversity & Inclusion Report.

While AT&T’s workforce is similar to other technology, media, and telecommunications companies (over 30 percent female and 40 percent people of color), the number of black employees is nearly 10 percent higher than the average for these companies and the number of Latino employees is about 6 percent higher, according to AT&T’s 2017 Diversity and Inclusion Report. People of color make up 36.9 percent of AT&T’s management.

Supporting the CEO Action Pledge

Stephenson is among the more than 150 CEOs who have signed the CEO Action for Diversity & Inclusion Pledge, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace. By participating, CEOs pledge to promote a workplace that respects and welcomes diverse perspectives and experiences.

“We have very clear policies and accountability around diversity and inclusion and while we are proud of the work we’ve done, we are not declaring victory. There are opportunities for us to improve and we are always in continuous improvement,” Anthony said at the press conference.

One such action AT&T has taken, according to Anthony, is increasing both the dollar spend and the number of diverse suppliers among AT&T’s suppliers. Menendez’s survey noted there is plenty of room for improvement here across the board: on average, companies only spent about 8.3 percent of their procurement of goods and services budget on women-and-minority-owned businesses.

How to push the pace of change

Among Menendez’s recommendations: CEOs must lead the way, incentivize progress by tying diversity goals to bonuses, build a pipeline of qualified minorities and women and embrace transparency.

“As more companies open up about their diversity and inclusion practices, consumers will be faced with the choice of sponsoring those that reflect their values and interest while shying away from companies that choose to remain homogeneous and non-transparent,” Menendez said.

Image credit: Office of Senator Bob Menendez

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