If you had to summarise current corporate commitments to diversity and equality, it might boil down to this: all talk, no action.
That’s the conclusion I began to form when I compiled new data on broad levels of employee and executive diversity and equality across a wide variety of different industries and sectors. My research was spurred by two events that occurred in 2020: the 100th anniversary in the US of women’s right to vote (in the UK, many women won the right to vote two years earlier, in 1918), and the tragedy of George Floyd’s killing in Minnesota by police. Both events renewed long-simmering debates about women’s equality in society and corporate life, as well as racial equality and diversity around the globe.
The corporate world actively joined in these debates, expressing solidarity with protests and with the Black Lives Matter movement, and professing brand values that aligned with a drive for women’s rights.
Brands are quick to voice support for these causes, which are often expressed as carefully crafted brand values or eloquent statements of brand purpose. But are companies living up to their professed values and purpose? Are companies actually funding any actions to resolve issues of racism and equality, starting within their own employee ranks, or is this lip service? Said more bluntly, is this cause washing?
One way to explore this is to look at existing levels of equality and diversity in different industries. Are companies hiring a diverse and inclusive workforce? Do organisations provide equal opportunities and career support for women and employees of colour? Are they represented in the executive leadership team and on the board? Answering these questions can help illuminate the scale of discrimination and the steps companies need to take.
My research focused on Fortune 500 and S&P500 companies, an international collection of organisations where publicly available data is readily available. I compiled data from Deloitte, Fortune magazine, the Alliance for Board Diversity, Crist Kolder Associates, and a wide variety of government data from the US and UK. I used the data to explore levels of overall diversity, C-level appointments and board makeup.
The chart below shows minority representation across the Fortune 500/S&P 500 in a variety of broad industry sectors, and shows the percent of minority CEOs, CFOs, Board seats and the underlying minority workforce in the US (this last data point varies a lot by geography). Minorities make up about 37% of the US workforce, but account for less than 10% of CEOs, CFOs or board seats. Some industries, like financial services, do much worse than the overall average: less than 4% of financial services CEOs are minorities. At the time of writing, there are only four black CEOs in the Fortune 500, and the number has actually declined in recent years.
Data from the UK shows similar results. About 6% of FTSE companies have a minority CEO, and 37% have no minority board representation.
Shown below is a similar analysis for the representation of women across various industry sectors and for different roles. About 47% of the US workforce is female, yet only about 6% of Fortune 500/S&P 500 CEOs are women, and only 13% are CFOs. About 23% of board seats are held by women. Again, there’s considerable variation across different industries: Life sciences and healthcare have the worst representation, consumer does much better.
About 5% of FTSE CEOs are female, with just under 20% of CFOs are women. About a third of board seats are held by women.
The brand crisis
An entirely reasonable reaction to this data is either disappointment or anger. It’s abundantly clear that either diversity and equality are not a top priority for businesses, or that endemic issues are at play that will be hard to overcome – or a combination of both. While it is undoubtedly true that racial and gender discrimination have many complex, deep-rooted causes, it is also true that brands that profess values of equality and diversity must honestly assess who they are and how they will promote change. Without this will and intent, and despite their often-sincere intentions, the pious promises we hear from brands can ring hollow.
The gulf that exists between what brand say and what they do on these important issues is glaring and does not go unnoticed. It erodes trust and confidence. Data from Edelman’s long running Trust Barometer research bears this out: levels of trust in all brands has fallen to an all-time low.
Brands need to do more, not say more, on these issues. This is hard work. These problems require a multi-year, well-funded, well led effort, not simply a Chief Diversity Officer with an intern, which can often seem like an empty gesture.
The route to achieving this is alignment to a clear brand purpose and commitment to specific activities that deliver on that purpose. Start by looking inward and holding the organisation accountable for its actions. Activate the brand in ways that visibly demonstrate an intention to be an agent for progress. This is a brand job, done with the support of the executive team. Brand leaders need to take a first step by being candid about how the organisations stacks up today, and what steps need to be taken to resolve issues.
Banding together with other, like-minded organisations is often a powerful way to build a coalition to attack systemic problems and create a consensus for change. Organisations that are seen to be living their values will be rewarded, both by loyal customers and by an energised workforce.