Dive Brief:
- Is there too much emphasis on race these days? Most (62%) Black and Latinx Fortune 500 board directors surveyed by Ariel Investments said race receives too little attention from their company's leadership; whereas most White male workers (54%) and nearly half of White women (40%) surveyed by Ariel said their leadership team pays too much attention to race. The investment company, with the help of Momentive, polled 151 Black and Latinx Fortune 500 directors and 4,958 U.S. workers nationally.
- Many directors of color told Ariel and Momentive they believed companies pursue DEI goals in the best interest of marginalized employees and shareholders, or because of concerns around social inequality. Meanwhile, 62% of workers said pursuit of DEI goals was motivated by PR or political concerns.
- Notably, 42% of Latinx men and 28% of Latinx women in the worker survey said there's too much C-suite emphasis on race. Likewise, 32% of Black women and 35% of Black men in the same poll agreed.
Dive Insight:
These data points ultimately shed light on mismatched understandings between board members, corporate leadership and workers at-large, regardless of the C-suite's actual intentions. One Ariel and Momentive finding touches on this explicitly: 37% of board directors surveyed said their companies' leadership is out of touch with the actual experiences of their marginalized employees.
These findings reflect tension HR and talent pros may encounter within their organizations given the undeniable increase in diversity and inclusion conversations following the police murders of Breonna Taylor and George Floyd.
For example, board director representation by race has been slow to reach parity despite an uptick in recent months. Last year, Heidrick & Struggle found that 28% of Fortune 500 board seats went to Black people in 2020. (Compare that to 10% of board appointments in 2019.) Three-fourths of these Black director appointments were made after May 2020, the month that Floyd was murdered.
Additionally, the 2021 edition of Corporate Board Practices in the Russell 3000, S&P 500, and S&P MidCap 400 detailed this phenomenon. Across all three indices, more than 78% of newly appointed directors were White, researchers at The Conference Board and ESGAUGE found. In the Russell 3000, representation for Black, Latinx, Asian, Hawaiian and Pacific Islander board directors increased by fractions of a percentage point.
Board diversity may matter little without the opportunity and skills to effect change. Forty-one percent of diverse directors told Ariel and Momentive that their boards don't regularly oversee risks that potentially affect communities of color. And about half (45%) said their boards don't prepare leaders for "effective" DEI oversight.
Corporate companies are often "pale, male and stale," a quip NASA administrator Daniel Goldin made about the STEM fields in the 90s. Forty years removed from Goldin's remark, that phrase continues to strike a nerve. If the aforementioned studies are any confirmation, corporate America has to fix some key structural issues before it can shake free from Goldin's epithet.
