Diversity Still Lacking on Corporate Boards
THE RESULTS OF U.S. SENATOR ROBERT MENENDEZ’S (D-N.J.) RECENT SURVEY of women and minority representation among the senior management of Fortune 500 companies found representation of women and minorities represented significantly below their relative presence among the national population. This hardly comes as a shock, yet the statistics provide an opportunity to see exactly where diversity stands— and how far it still needs to go.
“Words, pictures, numbers, facts, graphics, statistics, specks, waves, particles, motes. Only a catastrophe gets our attention. We want them, we need them, we depend on them,” writes novelist Don DeLillo in White Noise.
The study by the country’s sole Hispanic senator found minorities represent a total of 14.5% of directors on corporate boards and overall have less representation on executive teams than they do on corporate boards. White men, meanwhile, comprise nearly 70% of executive team members and 68% of corporate boards.
Menendez’s survey was one of the most successful of its kind, garnering input from 219 corporations on the Fortune 500 list and 71 on the Fortune 100 list.
The survey found Hispanics the most underrepresented of any ethnic group, comprising 3.28% of board members and 2.9% of executive teams, about one-fifth their representation in the U.S. population (15% or 45 million people). African Americans fared the best of any minority group in the survey. The average percentage of African Americans on corporate boards is 10.4%, but that is still not proportional to their U.S. population of 37 million (12%). Interestingly, the African American percentage increases slightly to 10.86% among corporations with a written diversity plan, and decreases to 5.47% among corporations that do not have a plan. This means that one out of every nine board members is African American among corporations with written plans, as opposed to one out of every eighteen for corporations without such plans.
Minority representation in general suffers in corporations that do not have written diversity plans. The number of minorities at the board level drops about 5 percentage points from 15.5% to 9.62%.
Corporations are aware of the effectiveness of diversity plans. An overwhelming majority (82%) of those that responded to the survey said they have formal, written diversity plans and a clear majority said they have targets for diversity at the executive management and procurement level. However, having such plans does not always correlate to increased diversity and the report warns against only investing in written diversity plans.
The report closes with a list of best practices recommendations. There are no innovative surprises. The report stresses investing in diverse communities, building relationships with diverse organizations, implementing mentoring programs, linking success on diversity to bonuses, and tracking supplier diversity.
The report uncovered no fast-track solutions to diversity because there aren’t any. Sometimes, it seems that the advancement of diversity is painstakingly slow, but when looked through a generational lens, progress is easy to distinguish. Senator Menendez does a great service by keeping the national spotlight focused on the progress of diversity. DB
From the September/October 2010 issue of Diversity & The Bar®