Diversity in the Workplace

The number of shareholder proponents about diversity at work has dropped by half to 16, down from 31. Just one this year is about LGBTQ rights; the rest address discrimination on the basis of race, ethnicity and gender. All seek more disclosure and action to provide equal employment opportunities. In a switch from earlier, only two of those now public are repeats, but three more also have been filed at undisclosed companies. Proponents have withdrawn two so far after agreements, but more accords are likely.

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Gender, Race and Ethnicity

EEO data reporting: Trillium Asset Management requested that Analog Devices, F5 Networks and Travelers report to investors with:

  1. A chart identifying employees according to gender and race in major EEOC-defined job categories, listing numbers or percentages in each category;

  2. A description of policies/programs focused on increasing diversity in the workplace.

A similar proposal to SEI Investments asks that the report cover “the number of minority and female employees in job categories where they are underutilized, including middle and senior level manager positions.”

The proposal is new at Analog. At F5, Trillium withdrew in 2017 after the company agreed to include diversity information in its forthcoming sustainability report, but the company did not so it refiled—then withdrew this year once the company fulfilled its commitment. At Travelers, the proposal received 36.3 percent in 2018 and 36.4 percent support in 2017.

 
 

Home Depot investors will consider a request for EEO reporting for the 18th year, in a record for resubmissions. The proposal routinely earns more than 20 percent support and in 2018 it received 48.3 percent. It asks for:

  1. A chart identifying employees according to their gender and race in each of the nine major EEOC-defined job categories for the last three years, listing numbers or percentages in each category;

  2. Asummarydescriptionofanyaffirmativeactionpoliciesandprogramstoimproveperformance,including job categories where women and minorities are underutilized;

  3. A description of policies/programs oriented toward increasing diversity in the workplace.

The 2019 proposal notes the company paid a $100,000 disability rights settlement in 2018 and settled a fair credit reporting class action suit in 2016 for $3 million.


Susan Baker
Vice President Shareholder Advocacy, Trillium Asset Management

Brianna Murphy
Vice President Shareholder Advocacy, Trillium Asset Management

DIVERSITY IN THE C-SUITE: WHY IT’S TIME TO SHINE A LIGHT ON EXECUTIVE LEADERSHIP


As a growing number of companies acknowledge the strengths of a truly diverse workforce, an area too often overlooked is executive team diversity.

The business case for workforce diversity is compelling and some companies have gone to great lengths to define a diversity and inclusion strategy. But progress is slow at the highest ranks of companies, arguably where the most important strategic and operational decisions are executed. Where workforce data is available, it often illustrates the slow progress in building racial and ethnic diversity into the C-suite. Too frequently the representation of non-white employees and women rapidly diminishes with rank.


New SASB request: At Fastenal and O’Reilly Automotive, As You Sow is testing out the applicability of material risk reporting issues defined by the Sustainability Accounting Standards Board. It asks for “a report to shareholders by 180 days after the 2019 Annual Meeting...assessing the diversity of our company’s workforce.” The proposal suggests the requested report should include data on gender for the company’s global operations and by job category in the U.S., adding race and ethnicity. It also seeks data on diversity-related legal costs and information on global diversity policies and programs. As You Sow withdrew at O’Reilly after a technical problem with the filing, but it remains pending at Fastenal.

Executive diversity: In another new proposal, Trillium Asset Management is encouraging companies to provide more reporting on their efforts to diversify upper echelons of management. It asks Bank of New York Mellon, BorgWarner, Newell Brands and Marathon Petroleum to provide an “assessment of the current state of its executive leadership team diversity and its plan to make the company’s executive leadership team more diverse in terms of race, ethnicity, and gender.” At Bank of New York Mellon and BorgWarner, it praises the companies for progress on board diversity but says they should work on opening up executive jobs to more diverse executives, where women and people of color are underrepresented. It offers similar praise to Marathon Petroleum for its diversity programs in general but also concludes more work is needed at the executive level.

At Carter’s, Trillium’s proposal is slightly different. It points out that the company’s disclosures are not sufficient to enable investors to assess the effectiveness of its efforts to expand executive diversity. It then asks for a report on its executive Strategy Board and diversification plans.