The struggle to find a place at the table for minorities and women inside America’s boardrooms continues.
Numbers emerging from the nation’s biggest tech firms highlight a disturbing trend. Women and people of color are barely represented. Only 2% of employees from the biggest tech firms in Silicon Valley are black. Fewer hold board, upper management and middle management positions. And in a country where shareholders rely on their board members to make the big decisions, there are few voices to champion or lobby the demands or requests of minority or female shareholders.
It’s particularly unsettling to people of color especially when corporations enjoy record profits by tapping into the more than $1 trillion in purchasing power of the African-American community.
A Credit Suisse analysis that looked at performance of 2360 companies around the world over a six-year period found companies with one or more women on the board have consistently delivered higher average returns on equity, better average growth and higher price or book value.
Another recent study
by the 2013 Catalyst Census: Fortune 5oo Women Board Directors and the 2013 Catalyst Census: Fortune 500 Women Executive Officers puts the situation into alarming perspective. Among their findings:Women held only 16.9% of corporate board seats in 2013, indicating no significant year-over-year uptick for the eighth straight year. Black women hold 3.2% of all board seats.
Ten percent of companies had no women on their boards; more than 67% of companies had no black female directors. And women held only 8.1% of top earner slots.
New York City Comptroller Scott M. Stringer is one leader forging the drive for Corporate America to open its doors to diversity. He spoke with BlackEnterprise.com about the steps his office is taking to temper today’s culture of corporate exclusion.
RELATED: Dismal 2%: Tech Diversity Reports Abysmal For Blacks
BlackEnterprise.com: You followed up on a campaign promise and appointed Carra Wallace as the first-ever chief diversity officer overseeing city agencies. You called her the “cop on the beat.” When did it become obvious to you the city needed a chief diversity 0fficer?
Scott M. Stringer: NYC procures $6 billion in goods—money spent anywhere from hiring law firms, accountants or even ordering paper and paper clips. Of that money, only 2.7% is allocated to women or minority owned businesses. So right then and there, I knew we needed someone to monitor city agencies and work to increase that paltry sum of money. We are launching our own advisory council on minority and women’s business issues and we are going to measure diversity metrics. It includes reporting procedures and accountability mechanisms for companies and investment managers and asking them the tough questions.
Your office has mentioned a letter-grading system to be unveiled in the coming months. It‘s expected to be the most comprehensive assessment of city agency performance in advancing M/WBE procurement to date. Can you address that, and what are the grades so far?
That process is ongoing. We are doing an analysis of the kind of grading
system for city agencies. We think it’s imperative that city agencies have robust minority- and women-owned business programs that actually result in the increase of the amount of money that goes to these companies. We are hopeful that through our efforts and holding agencies to a higher standard we can move the needle.New York City is the most diverse city in the world. In light of all the stories and reports about the lack of diversity in America’s boardrooms, how can this city lead the way in opening more doors for minority and women-owned businesses?
In February, I sent a letter urging the SEC to encourage corporate disclosure of spending dedicated to diverse suppliers. And in April, I sent 20 letters on behalf of the pension funds to our largest holdings including Apple, Pfizer and American Express asking them to disclose their performance of supplier diversity programs. All these companies are talking the talk, but without full disclosure it’s impossible to measure commitment. So we’ve asked companies to disclose performance data to shed light on their programs effective by September.
How is your office working with other comptrollers and state treasurers like Denise Napier of Connecticut to make sure the companies they invest in aren’t “male, pale and stale,” as one of your letters indicated.
By monitoring our city agencies. On a national level, we’re holding companies to a new way of disclosure on supplier diversity. And we have to monitor board diversity. It is obviously vital to a company’s success and an essential element to robust decision making. We need to strengthen the boards’ independent thinking and oversight. The time for delay is over, the talent is available and the task of board leadership demands that talent. The days of male pale and stale should be a look back on how we were not where we need to be.