Diversity is a feat which various organizations and top multinationals pride themselves in. Diversity speaks of important and interrelated dimensions of human identity such as race, ethnicity, gender, socio-economic status, nationality and age 1 e.t.c ‘From Neil Armstrong’s walk on the moon to the Wright brothers’ flight, Americans take a lot of pride in being the first to achieve major milestones. Yet when it comes to board diversity, that pioneering spirit seems to be waning’ 2 .
This Article will examine Diversity in terms of Color and Diversity in terms of Sex in Fortune 500 companies’ board membership constitution.
DIVERSITY IN TERMS OF SEX:
After being named to Facebook’s board last week, Kenneth Chenault was added to Airbnb’s board of directors as well. Chenault is the company’s first independent board member, as well as its first African-American 3 . However, it is important to note that Airbnb’s board remains all male in its sex constitution. This speaks of unequal representation in board membership and could affect the overall image of Airbnb. Rather surprisingly, Airbnb still maintains its position as a top internet platform that brokers short term lodging rentals, hosted music and tourism events, with revenue totaling 2.6 Billion USD as at 2017.
’There’s an uptick of female representation nearly everywhere we look these days’ 4 .Procter & Gamble, the world’s largest advertiser, is working on having 50% of its ads directed by women in the next five years. And now data shows that women are making their way into more and more boardrooms across the U.S 5 . This is in fact a stride in the right direction.
Today, women constitute 31% of new board directors in the 3,000 largest publicly traded companies across the US. The 248 women added to boards in the first five months of the year represent the highest female percentage in at least ten years, and the implication of this according to the WSJ (Wall Street Journal) is that 2018 could end as a record year 6 .
The 2016 Global Board Diversity Analysis, which examines and analyses board data from 1,491 public companies across 44 countries came across the finding that while the U.S. initially led the charge in diversifying corporate culture, it has lagged behind much of the developed world over the past four years. 7
‘In 2012, women accounted for 19% of board seats on U.S. companies, while women in Western Europe held about 15.6% of seats. Four years later, the U.S. has seen incremental progress—women now make up about 20% of directors—while that percentage has jumped to
25.6% in Western Europe’ 8 .
DIVERSITY IN TERMS OF COLOUR:
Following the attempt to completely wipe out discrimination on terms of sex, colour, sexual orientation e.t.c by the United Nations in its Universal Declaration of Human Rights, various corporate entities across the globe have continuously attempted to increase diversity in staff
constitution and all the way to board room.
However, certain top corporations have been criticized for absence of diversity in board membership. A good example is Facebook, however ‘The tech giant, which currently has two women and one African American on its nine-member board, will be applying a “diverse slate
approach” to new board appointments, according to Facebook COO Sheryl Sandberg’ 9 .
It is reported that even if only 16 Fortune 500 companies share detailed demographic information about their employees and if that group were one giant U.S. company, it would take at least 26 skyscrapers to give each of those 5,089 executives and senior officials a corner
office. Of those high ranking officials, 80% are men and 72% of those men are white. 10
Below is a sample of demographic data of 16 Fortune 500 companies according to Fortune reporting.
‘Using those 16 companies as a representative sample for the entire Fortune 500 cohort would result in a pretty wide margin of error: 24.3%. So, it’s important to point out that the workforce at 16 companies that share data isn’t a perfect predictor of the other 484. However, it seems likely that women at Fortune 500 companies see better representation in senior official roles than they do among CEOs’ 11 .
Also below is a demography of Racial and Ethnic representation in Fortune 500 companies’ leadership according to Grace Donnelly for Fortune Reporting.
1. Stacy Jones, ‘White Men Account for 72% of Corporate Leadership at 16 of the Fortune 500 Companies’ (June 9, 2017)
2. Natasha Bach, ‘Sheryl Sandberg Explains How Facebook Will Answer Criticism That Its
Board Is Too White and Too Male’ (June 1, 2018)
3. Natasha Bach, ‘Women Are Being Added to Boards at a Record Pace—But the Most
Powerful Seats Are Still Reserved for Men’ (June 21, 2018)
4. Natasha Bach, ‘Airbnb Adds Another Man to Its All-Male Board’ (January 26, 2018)
5. Valentina Zarya, ‘1 Big Reason There Are So Few Women on U.S. Corporate Boards?
Directors Egos’ (February 8, 2017)
6. Wintlett Taylor-Browne (Luther College), ‘What is Diversity’ (12 September, 2018)