‘We are fundamentally a racist and sexist society’: How top companies in US are struggling to diversify leadership

Darren Walker, president of the Ford FoundationI think shareholders and stakeholders of public companies have a right to this information, and I believe this information is valuable data because it will also give you some sense of accountability of these public statements.For those companies holding out, the reasons vary. Many are reluctant to disclose EEO-1 data for fear of being cast in a negative light. They contend that the annual diversity reports they publish better reflect their workforce than the data collected by the federal government.Exxon Mobil, FedEx, Walgreens Boots Alliance and T-Mobile were among the companies that refused to provide their EEO-1 filings to USA TODAY.“There has been an unprecedented consciousness raising that came out of the killing of George Floyd,” Walker said. “I don’t think there is any CEO in America who can consider himself or herself an excellent leader of a public company without diversity.”After Floyd drew his final breath under the knee of a white police officer in Minneapolis, hundreds of companies issued statements condemning discrimination and pledging to play a bigger role in battling systemic racism. For decades, corporations have perpetuated racial inequalities in hiring, pay and promotion that directly contribute to the wealth gap that has widened over the past decade, said Valerie Rawlston Wilson, a labor economist who runs the Program on Race, Ethnicity and the Economy at the independent nonprofit Economic Policy Institute.The typical white family has eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family, according to the Federal Reserve.The typical white family has eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family, according to the Federal Reserve.Black workers are especially underrepresented in industries and occupations with the fastest growth in pay.Valerie Rawlston Wilson, a labor economist, runs the Program on Race, Ethnicity and the Economy at the independent nonprofit Economic Policy Institute.Economic Policy InstituteThe Conference Board, a private research group, found that Black men with bachelor’s degrees earned 24% less than white men with those degrees in 2019, up from 18% in 2010. For Black women, the gap in wages with white men was even greater at 26%, also much worse than in 2010.The coronavirus put the economic fallout from occupational segregation into even sharper relief as people of color were among the hardest hit by the pandemic. More white people hold leadership, management and professional roles that come with higher pay, better benefits and more flexibility, helping them “maintain health and economic security by virtue of being in a certain kind of job,” Wilson said. Workers who interact with customers face-to-face or crowd into warehouses are disproportionately women, Black and Hispanic. They were more at risk of losing their jobs during the pandemic, often because of health or child care issues.Among the 54 S&P companies surveyed by USA TODAY, 1 in 15 Black or Hispanic workers held management jobs compared with 1 in 7 white workers.About 1 in 4 white workers held a professional position compared with just 1 in 9 Black or Hispanic workers. Again, the gap was worse at the surveyed corporations than the nation’s overall workforce. “These kinds of occupations come with benefits that have ripple effects to one’s broader economic well-being and the well-being of your family and your community,” Wilson said.At most of the companies, 81% of Black and Hispanic workers are in lower-level labor and operations jobs, compared with 60% of white employees.Diversity consultant John Graham calls it the “plantation effect.”The hierarchies of corporations, he said, echo the strictures of Jim Crow discrimination and white people – mostly men – call the shots.“The model hasn’t changed much. The facades have,” said Graham, author of “Plantation Theory: The Black Professional’s Struggle Between Freedom & Security.” John Graham wrote “Plantation Theory: The Black Professional’s Struggle Between Freedom & Security.”John GrahamUSA TODAY found that at the top of the S&P 100 companies surveyed, gaps for people of color were double or triple those in the U.S. workforce as a whole. The lack of executive-level representation is even starker for women of color.John Graham’s “Plantation Theory: The Black Professional’s Struggle Between Freedom & Security”John GrahamNon-Hispanic white people make up 64% of the U.S. workforce yet are 78% of S&P 100 executives. White men, who comprise about one-third of the workforce, occupy more than half –  55% – of the jobs at the top.By contrast, Black people, who make up 11% of the U.S. workforce, are just 4% of leadership ranks in the S&P 100 group surveyed. Black women are among the least represented at just 1.7% of all U.S. executives. Take Ford in 2020. Nearly a quarter of its employees are Black, which is a greater share than at any other of the S&P 100 companies analyzed by USA TODAY and about twice the rate of the U.S. workforce. Yet only 7% of executives and 10% of managers at Ford are Black.For Ford to reach parity at the top with its overall workforce, it would have to add 75 Black executives to the existing 24 Black company leaders. It also would have to hire 1,500 new Black managers, which is almost twice as many as are currently in those roles. These patterns exist in newer industries, too. In 2020 at NVIDIA, a graphics processing chip manufacturer that’s one of the top companies by market capitalization in the S&P 100, Black people account for just 1% of the entire workforce, the lowest among the firms surveyed by USA TODAY. The management and professional ranks of the chipmaker are also 1% Black, and its senior leadership is less than 1% Black.“We are purposefully creating opportunities to increase the Black population, and all underrepresented groups, at every level of our company,” NVIDIA said in a statement to USA TODAY.In 2016, 93% of Amazon’s 105 top executives were white, making it the company with the highest percentage of white people in those top jobs among the S&P 100 companies USA TODAY surveyed.More than three-quarters of the Amazon executives – 78% – were men, according to most recent federal data Amazon has released publicly.The company declined to provide more recent EEO-1 data, but USA TODAY reviewed company leadership using an internal Amazon staff directory.Not a single Black executive reported directly to CEO Jeff Bezos, who stepped down July 5, and little more than a handful sit on the teams of his direct reports, according to the review. Bezos’ successor, Andy Jassy, has no direct reports who are Black.Amazon told USA TODAY it doubled the number of Black directors and vice presidents last year and has similar goals for 2021, focusing on increasing the number of Black women in midlevel and higher corporate roles.×After George Floyd’s murder, top corporations pledged to fight systemic racism. But deep racial inequalities persist, new data shows. Share this storyLowe’s is one of the few S&P 100 corporations led by a Black CEO, Marvin Ellison. Nearly 14% of top executives, 10% of managers and 11% of professionals at the national home improvement chain he runs are Black, according to 2020 EEO-1 data the company provided to USA TODAY. Nearly 16% of the Lowe’s workforce is Black.Marvin Ellison is CEO of Lowe’s.Pool photo by Andrew HarrerHispanic representation isn’t as high. About 9% of managers and 5% of professionals but none of Lowe’s top executives are Hispanic, though nearly 13% of the workforce is. Nearly 80% of top executives are white and 75% are men. Ellison told USA TODAY that when he joined Lowe’s three years ago, the management team was even less diverse.  Today, he said, “we have representation in the room that represents the diverse thoughts and buying habits of the people we are trying to serve.” As the nation gets less white and more racially diverse and companies scramble to serve a changing market, having a diverse workforce is fast becoming a business imperative.People gather at George Floyd Square in Minneapolis.Stephen Maturen, Getty ImagesBlack spending power is on track to reach $1.8 trillion by 2024, and the buying power of the U.S. Hispanic population is expected to top $2.3 trillion by 2025, according to Nielsen research.Sen. Bob Menendez, D-N.J., introduced a bill that would require companies to reveal the ethnic and gender diversity and the veteran status of their boards of directors and executives. He said corporate America should embrace diversity “not because it’s a philanthropic thing to do, but because it’s about creating market share.”Sen. Robert Menendez, D-N.J.; Nell Minow, vice chair of ValueEdge Advisors, a consulting firm specializing in corporate governance issues
Sen. Robert Menendez, D-N.J.; Nell Minow, vice chair of ValueEdge Advisors, a consulting firm specializing in corporate governance issues
LEFT: Sen. Robert Menendez, D-N.J. RIGHT: Nell Minow, vice chair of ValueEdge Advisors, a consulting firm specializing in corporate governance issues
GETTY IMAGES; PABLO MARTINEZ MONSIVAIS, APDespite decades of research findings, it took the Me Too movement’s shattering revelations of harassment and abuse of women to kickstart support for greater gender diversity.Then came the thunderclap that shook the nation: Floyd’s murder on May 25, 2020. The subsequent outpouring from the nation’s largest companies ended decades of corporate silence on anti-Black racism and police killings.“My father always says that change comes about when what has been perceived as a misfortune is perceived as an injustice,” said Nell Minow, vice chair of ValueEdge Advisors, a consulting firm specializing in corporate governance issues. “We have reached that tipping point. This is now a market response to the perception of market risk.”With that risk in mind, corporations are making moves to diversify cubicles and corner offices.White people hold 74% of executive slots, 67% of management positions and 56% of all other jobs at Coca-Cola, which is headquartered in majority-Black Atlanta. The company, which paid $192.5 million in 2000 to settle allegations it routinely discriminated against Black employees in pay and promotions, said it aims to have its workforce mirror U.S. census data for race by 2030.Just to achieve parity with the U.S. workforce at the executive level for one racial group, Coca-Cola would have to hire 21 Black executives, an increase of 51%. Reaching equitable representation for Hispanics would require hiring 35 executives, increasing their ranks at the company’s top level by 64%, USA TODAY found.About 77% of executives at rival Pepsi and 71% of managers are white. The company based in Purchase, New York, said it would add 28 Black associates to its executive ranks, and it plans to spend $400 million over five years to “help create equal opportunities for Black Americans.” Adding that many Black executives would bring the company into parity with the U.S. workforce.As the banking industry comes under growing pressure to fix the racial wealth gap its business practices helped create, the nation’s largest bank, JPMorgan Chase, committed $30 billion to help promote racial equity, including a pledge to underwrite home loans for Black and Hispanic borrowers. It announced plans to hire 300 more Black and Hispanic wealth advisers by 2025. White people hold 79% of executive positions and 58% of management roles.McDonald’s, which has wrestled with allegations of racial discrimination for years, ties 15% of executive bonuses to meeting targets including diversity and inclusion. It is working to increase the number of people of color in its U.S. management ranks by 2025 and reach gender parity in senior roles by 2030. The company’s latest EEO-1 shows that 62% of workers but only 31% of executives are women. Though most women workers are nonwhite, 21 of the 28 female executives are white.Medtronic may not be a household name like McDonald’s, but the Fridley, Minnesota-based firm is one of the world’s largest medical device makers. It says it’s working to diversify its workforce, including midlevel managers, and has made diversity goals part of annual management reviews.Over the past five years, it has doubled the representation of Black employees at the vice president level and increased the overall ethnic diversity of managers, according to Sally Saba, the company’s chief inclusion and diversity officer. Eighty percent of Medtronic’s executives, 76% of managers and 63% of all other workers are white, according to the company’s EEO-1 data.Duke Energy, a power and natural gas holding company based in Charlotte, North Carolina, has the highest percentage (87%) of white people in management among all the companies that released data to USA TODAY. At the top of the company, 82% of Duke executives are white, the 12th-highest of the companies that released data. Joni Davis, vice president of diversity and inclusion and chief of staff at Duke Energy, said her company is committed to changing those figures, and she said Floyd’s death was an “accelerant” to have “courageous conversations” among employees to change the culture at Duke Energy.Scholars said part of the problem is the misguided belief that corporations are run as meritocracies that give everyone an equal shot on the basis of their abilities.“Meritocracy is a convenient excuse for not doing the recruiting and retention work it would take to diversify,” said Victor Ray, assistant professor of sociology and African American studies at the University of Iowa. “Meritocracy itself is a racialized idea.”Victor Ray, assistant professor of sociology and African-American studies at the University of IowaMeritocracy is a convenient excuse for not doing the recruiting and retention work it would take to diversify. Meritocracy itself is a racialized idea.Companies often blame the lack of diversity on too few qualified candidates, not on the barriers to employment that researchers identified such as hiring from insular networks and workplace cultures that make people of color feel excluded.According to Adia Harvey Wingfield, a sociology professor at Washington University in St. Louis, research shows that when companies cling to these beliefs, “they are more likely to miss the ways their internal practices reproduce unequal outcomes along racial and gendered lines.” “Sometimes these inequalities happen as a result of hiring discrimination. Other times they occur through cultural dynamics that marginalize workers of color. Many companies also rely on measures that do not work, such as diversity trainings that have been shown to foster resentment without necessarily boosting the numbers of underrepresented workers,” Wingfield said. “Ultimately, the data suggest that these aren’t pipeline problems – they are organizational ones that leave qualified Black and brown workers overlooked and excluded from leadership roles.”Adia Harvey Wingfield, a sociology professor at Washington University in St. LouisUltimately, the data suggest that these aren’t pipeline problems — they are organizational ones that leave qualified Black and Brown workers overlooked and excluded from leadership roles.Only by removing bias can companies begin to identify the full range of candidates who have the talent and skill to succeed, said Charlice Hurst, an assistant professor of organizational behavior at the University of Notre Dame Mendoza College of Business. “There are many excellent Black managers and senior managers languishing in professional and managerial positions,” she said. “Often, they lack the networks and mentorship that tend to be crucial for making the leap to the next level.”Charlice Hurst is an assistant professor of organizational behavior at the University of Notre Dame Mendoza College of Business.Matt Cashore/University of Notre DameEven when corporations hire Black and Hispanic workers, unequal pay and lack of promotions, microaggressions and feelings of isolation drive high rates of alienation and attrition, researchers say.The Ford Foundation’s Walker said the problems in corporate America are systemic, so the solutions must be, too: Corporations should scrutinize their practices not just in the area of hiring but also in retention, promotions and workplace culture.“That is where we lose minority talent,” he said. “They are recruited with great promise, and then something happens when they come to a company.”Oscar Veneszee, a decorated 23-year Navy veteran, joined Facebook in 2017 to recruit fellow military veterans and individuals from underrepresented groups. He said he’s been denied promotions that would have earned him higher pay, and Black job candidates he personally referred to the company were not hired.“If you’ve got one leg tied and two hands tied behind your back and you get into the company, but then you are rated as mediocre, that doesn’t sit well with me,” said Veneszee, who is Black. “You must be hiring the best that my community has to offer, and then you’re telling me the best my community has to offer is average at your company, when they are not average anywhere else in the world.”Oscar Veneszee sued Facebook for alleged discrimination.Oscar VeneszeeFloyd’s death “woke up every responsibility I have,” said Veneszee, who still works for the company. He ran for county commissioner where he lives in Florida, and he sued Facebook, alleging discrimination and a culture of bias in evaluations and promotions. Based on his complaint and others, the Equal Employment Opportunity Commission is conducting a systemic probe into Facebook’s hiring practices. “I am simply asking Facebook to properly evaluate how they value Black people and the work we bring to the table,” said Veneszee.“It is in our interest for it to be a place where everyone can do their best work,” said Facebook diversity chief Maxine Williams.Martin E. Klimek, USA TODAYFacebook’s diversity chief Maxine Williams declined to comment on the lawsuit and on the probe.“It is in our interest for it to be a place where everyone can do their best work,” she said of Facebook.Burns, who sits on the boards of Exxon, Uber and MIT, fields calls from corporations every day as she fights for racial equity in the corner office and the boardroom. “I get tired of talking about it, but I will not stop,” she said. “We are willing to help if they want us to help them, but I am not going to spend my time trying to convince corporations that this is a good thing to do. If shareholders, consumers and governments continue to allow them to operate this way, we get what we deserve.”Contributing: Kelly TykoHave a tip? Reach Jessica Guynn at jguynn@usatoday.com or on Twitter @jguynn, Jayme Fraser at jfraser@gannett.com or on Twitter @jaymekfraser, Craig Harris at craig.harris@usatoday.com or 602-509-3613 or on Twitter @CraigHarrisUSAT and Dian Zhang at DZhang@gannett.com or on Twitter @dian_zhang_Every year, companies send the U.S. Equal Employment Opportunity Commission a one-page form called an EEO-1, counting workers by race, ethnicity and gender in 10 occupation categories. The U.S. Census Bureau also produces a summary of the American workforce that uses the same industry, occupation, race and ethnicity definitions as the EEO-1. USA TODAY compared how well represented Black and Hispanic people were at these companies versus the overall labor force. For some stories, we zoomed in on Census statistics for an industry associated with companies for which we had data: five companies in tech, six banks and seven food or retail corporations. We also reviewed corporation websites for racial and gender identities of board members, confirming with company officials as needed. Explore our database of EEO-1 employment records.Reporting and analysis Jessica Guynn, Jayme Fraser, Craig Harris, Dian Zhang, Charisse JonesEditing Michelle Maltais, Steve Suo, David BrinkerhoffDigital design and development Colin Smith, Andrea Brunty, Kyle OmphroyGraphics Carlie ProcellPhotography, videography and photo editing Jarrad Henderson, Jack Gruber, Emily Johnson, Christopher PowersSocial media, engagement and promotion Josh RiveraStories like this are possible because of our subscribers like you. Your support will allow us to continue to produce quality journalism.Stay up to date by signing up for one of our newsletters.Sign upPublished
4:08 am UTC Jul. 14, 2021
Updated
1:41 pm UTC Jul. 16, 2021


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