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Industry News

 

Women, Minorities Make Gains in Board Room, Lag in Executive Suite

Friday October 24, 2008

 

Bethesda, Md. — Oct. 21
A survey tracking diversity initiatives at the 636 companies that make up the Calvert Social Index reveals that 83 percent of leading companies have at least one woman or minority on their boards, but only 38 percent have a woman or minority among their five highest paid executives.

That disconnect is one finding highlighted in "Examining the Cracks in the Ceiling: A Survey of Corporate Diversity Practices in the Calvert Social Index." The survey shows significant progress and continuing challenges for women and minorities in corporate America.

"Calvert has long advocated for greater diversity, both at the board level and within the management structure," said Barbara J. Krumsiek, Calvert President and CEO. "Although board diversity trends are encouraging, we should remember that future board members are often selected from top management, a group which is still overwhelmingly white and male."

Krumsiek said Calvert has long taken a leading role in fostering diversity at its portfolio companies, pointing to her firm's development of model charter language on board diversity in 2003, and actively engaging with companies in the Calvert Social Index Fund to increase their board diversity. She said the survey will be an important tool in fostering further progress on diversity issues.

Among the survey's highlights: 

• Almost all companies target diversity but few have met the strictest standards. Only nine companies within the survey showed no public commitment to diversity, but only 3 percent demonstrated diversity excellence.
• Increased disclosure is needed. To manage diversity, companies have to be able to measure it. Still, only 7 percent of companies surveyed provide the detailed demographic data required for full EEO-1 disclosure, making it difficult to assess progress for women and minority employees.
• Performance varies by sector. On average, companies in the technology sector performed the best, closely followed by companies in the consumer cyclical sector. Companies in the energy sector lagged.
  

The survey measured progress in 10 areas: EEO policy, internal diversity initiatives, external diversity initiatives, scope of diversity initiatives, family-friendly benefits, EEO-1 disclosure, highest paid executives, board diversity, director selection criteria and overall corporate commitment. Through a combination of in-house and third-party research, Calvert assigned companies a numerical score of 0, 5 or 10 points in each area. These scores were then combined for an aggregate score, ranging from 0 to 100.

For more info: http://www.calvert.com