Apple. Amazon. Google. Facebook. CVS. Visa.
All know these iconic companies. They represent household names that owe a significant portion of market share and revenue growth to African American consumers. They also fail to have a single African American among their governance ranks. Four--Facebook emerged among the S&P 250 during the past year--are repeat offenders, having been on last year's listing of "America's Largest Public Companies Without Black Directors."
In doing the research that led to the black enterprise Registry of Corporate Directors, our listing of black board members from the 250 largest companies on the S&P 500, we discovered that 74 companies--29.6%--do not currently have a single black director in their boardrooms. Moreover, as a group, the number of companies without such representation didn't budge from last year (see list).
Among the worst have been tech companies. Google Executive Chairman Eric Schmidt made the following commitment to Rainbow PUSH Founder and President Rev. Jesse Jackson at the company's May shareholders' meeting: "While today we're extremely happy with the diversity on our board, and we agree that when we have additional board openings, I can assure you, we will look for every qualification and specifically people of color, additional female board members.... It is a core policy of Google to be diverse, and we take it very seriously."
A number of other corporate representatives responded to our questions about their lack of black board members. Apple stated that the company's board charter was recently amended. It now reads: "The nominating committee is committed to actively seeking out highly qualified women and individuals from minority groups to include in the pool from which board nominees are chosen."
Yahoo maintained that although it does not "have any African American board members, we actually addressed many of your questions at our annual shareholder meeting."
Hewlett-Packard, which hasn't had a black director on its board since 2011, stated that it was finding new board members and that it does "work with a search firm with a lens to diversity."
The reality is that these companies will not change their board compositions without pressure. For instance, Jackson told be: "We found that [tech companies] had been fighting vigorously against EEO [Equal Employment Opportunity] reports because their records had been so horrendous, until they were embarrassed by the numbers." The civil rights leader said that the findings "broke the ice" with most CEOs, but still none have confirmed that black board members were currently within their consideration set or nominating pipeline.
Non-tech companies such as TJX Cos., the parent of discount retailer T.J. MAXX, have issued similar statements: "While we do not currently have an African American board member or a formal policy with respect to board diversity, we do take into account many factors when evaluating our board and considering new board members. The factors include geographic, gender, age, ethnic and racial diversity as well as diversity of experience."
Bottom line: Diversity is not a priority. As one governance expert maintained, companies that fail to have board inclusion communicate to the world how little they value diversity on each rung of the corporate ladder.
These boards should exercise economic reciprocity ensuring that they reflect market share contributions from African Americans. If these corporations continue to shun black participation on boards, they may find the next stage of response may well be loss of African American consumer dollars at the cash register.
JOHN ROGERS & CHARLES TRIBBETT of the Black Corporate Directors Conference on the value of blacks on corporate boards
What has been the progress of proposed initiatives to increase the number of black board members?
John Rogers: My understanding is that the group that meets out West has been very aggressive and forceful at pushing giant tech companies out there to have their Jackie Robinson moment, and to go to the Facebooks, the Apples, the major, main names, I think is so important. The Texas group has this idea of [getting] the private equity world to open up to certain people of color and companies that they take private. This year's conference, we will have David Rubenstein coming in from the Carlyle Group talking about how we encourage these giant institutions that are controlling so much of corporate America and pick the people to put on the board.
Charles Tribbett: Thanks to work that black enterprise has done as well as others that really help them narrow down which companies don't have African Americans on their boards, they are now reaching out to CEOs and heads of nominating committees. They can personally call that person and talk to them about when they have a slot coming up, they should think about diversity.
Share with our audience how black board representation significantly expands opportunities for all.
Tribbett: When blacks go on boards, they are part of the CEO succession planning. [You have someone to fight] for candidates that can be elevated to the president role or presidents of divisions where African Americans are now running 2,3,5 billion-dollar P&Ls for a company. Even if they don't get the CEO job. they get recruited to become candidates for CEO opportunities elsewhere. The more you have on the board, the greater the odds that diversity occurs at the company across the board.
Rogers: Once we are there and people see us, alongside white directors, more often than not I see African American directors move into these leadership roles. People say,' Hey, these guys are pretty good here. Actually they are really the best, we are going to make them chairman of the whole company or CEO." It shows how talented our folks are. We just need an opportunity to get in the room.
--Derek T. Dingle
NYC Comptroller SCOTT STRINGER on how government can promote board diversity
What is stopping boards from bringing in people from diverse backgrounds?
It's a question that we need to address. I believe that too many companies have not taken this seriously, and it's been to their detriment. We need to reflect the ability of getting energy on boards. It's just that simple: If you have diverse boards, you tend to do better.
Boards listen to their shareholders, but women and minorities don't have people on the inside. How do we explain to minorities and women alike that this problem constitutes a clear and present danger?
In terms of board diversity and supplier diversity, strengthening minority- and women-owned businesses, it's all within the goal of strengthening our pension funds and creating a more vibrant economy. When I see companies diversify their boards, when I see companies speak to the issue of supplier diversity, I know those are going to be good companies that the Pension Fund of New York City will want to invest in, And I think there's a lot of public pension funds who share that view. Part of my job is to be a fiduciary to identify companies that have good corporate practices, bringing in more people of color and women on the boards to create more vibrant companies.
How is your office working with other comptrollers and state treasurers to make sure companies they invest in aren't "male, pale, and stale?"
Three things we're doing. One, monitoring our city agencies: two, on a national level, we're holding companies to a new way of disclosure on supplier diversity; and three, we believe very strongly that we have to monitor board diversity. 1 believe very strongly that board quality is vital to a company's success. And diversity is an essential element to robust decision making. The time for delay is over. The talent is available. The task of board leadership demands that talent-so the days of 'male, pale, and stale1 should be a look back on how we were, not where we need to be.
JESSE JACKSON on bringing inclusion to Silicon Valley
Share with us your campaign concerning corporate boards in Silicon Valley.
First of all Silicon Valley has been a highly segregated valley. This includes Apple. eBay, and Amazon, all of them. All of them are all-white, male boards of directors, and a few white women for the most part. And the board of directors was one issue. The other was the C suite issue.
We found that they had been fighting vigorously against EEO reports because their records had been so horrendous, until they were embarrassed by the numbers. And Google broke the ice, now Yahoo is coming in. We think that exposing the EEO reports opens the door to the whole discussion about boards of directors.
For example, now, the successor to Bill Gates as Microsoft board chairman is John Thompson, who ran Symantec very well. And I think that Dave Drummond from Google is now on one of the major boards. Once we had begun to open up the discussion, they felt the media pressure of exposure.
How have you been lobbying tech companies to encourage them to increase diversity...