Corporate Diversity Improves, Marginally
By Simone Aliya
A diversity of products, thinking, and consumers combine to create a dynamic and vibrant global marketplace. Especially for companies that operate around the world, it therefore makes sense that diversity within senior management and boards of directors could provide an edge.
However, the third Survey of Corporate Diversity Practices of the S&P 100 from Calvert Investments reports that few women and minorities are making it into the board room and executive suites of S&P 100 companies (the 100 largest publicly traded companies in the U.S.).
The Calvert Report acknowledges progress year-over-year, while also demonstrating that it’s marginal progress. The data shows S&P 100 companies collectively hiring and even actively recruiting more women and minorities.
At the same time, the report illustrates a fact that we must not overlook as investors. Women are not making it as far up the corporate ladder as their male counterparts are. While the number of women appearing on S&P 100 boards has risen from 18 to 19.7 percent since 2010, only eight percent of these women are highest-paid executives. This is a little less than one woman, on average, per company.
The Calvert Report also identifies a major inadequacy in disclosure of corporate demographic data. Forty percent of the S&P 100 companies do not publicly report on workforce diversity, and more than half provide only partial data. Thus, it’s fair to say that inadequate reporting is a limiting factor for determining each company’s overall commitment to diversity initiatives. It’s also fair to say that full and transparent reporting by race and gender in all employment categories is in itself a key indicator of corporate commitment to diversity.
Barbara J. Krumsiek, Chair, President and CEO of Calvert Investments, urges companies to take a more comprehensive approach to creating rich, dynamic workplaces. Such changes are imperative in an increasingly complex global marketplace. Gender and racial diversity at the highest level can be a valuable corporate asset. Innovative and humane companies are most attractive to the public and to investors, and can deliver superior shareowner value, over time.
Mention of specific companies or securities should not be considered a recommendation to buy or sell that security. Past performance is no guarantee of future results.
Posted: March 20, 2013