Recent shareholder resolutions have shown that companies are under more pressure than ever to release information about the diversity of their workplaces, according to a consultant who specializes in the issue.
“This is no longer a nice to do, it’s a must do,” said Meredith Benton, principal at the consultancy Whistle Stop Capital and a consultant with the Berkeley, Calif.-based workplace diversity advocacy group As You Sow.
Benton said the disclosure of diversity, equity and inclusion (DEI) information is not only relevant to the stock performance of companies, but something investors now expect. “Investors have been asking for this data for a long time and we have seen sort of a slow increase,” she said.
The push for disclosure from investors predates the killing of George Floyd and the protests for social justice, she said. But those incidents brought about a cultural shift and awareness that have increased investors’ understanding of the importance of the topic. “Now we are waiting for the companies to catch up,” she said.
A recent initiative by As You Sow, aimed at showing the current level of DEI disclosure from companies, revealed “a serious lack of statistical data on gender and racial diversity,” Benton said. But she noted that many leading companies are making significant efforts to move toward more transparent communications and honest conversations.
The group’s Workplace Equity Disclosure Initiative review of S&P 500 companies found that 70% of them have published statements about their commitment to a diverse workplace, she said. But despite strong statements from some companies about the importance of diversity, they have declined to provide meaningful data to show their workplaces are diverse and inclusive, she said.
Benton said As You Sow is seeking such data from companies because they are “sort of the equivalency of the balance sheet from a human capital perspective as it relates to diversity. ... We are asking for statistics on recruitment rates, retention rates and promotion rates."
The group’s DEI scorecard revealed that the largest companies by market cap and by headcount are most likely to release meaningful workplace diversity and inclusion data. Forty-six percent of the 100 largest companies by market cap in the S&P 500 released their consolidated EEO-1 forms, which show workplace composition, and more than one in four within the 100 largest employers in the S&P 500 did the same. More than half (57%) of the companies that fall within both categories released EEO-1 form, the report noted.
The scorecard gender data was easier to come by than data about race and ethnicity. More than one in four of the largest 100 companies released their recruitment rates of female employees, nearly one in five released retention rates of female employees, and one in 10 released recruitment rates of female employees.
“There are companies that tell me they are really committed to justice and inequality and that they are committed to transparency, but they don’t believe they should share their numbers. It’s absolutely mindboggling,” Benton said, adding that companies need to be pressed on why they're not supplying the information. “How much money would it cost you to fix this problem? What do you need to fix this problem? And why do you believe you can’t fix it?”
Financial services companies that made it to the top of the scorecard for disclosing DEI data included financial services companies BlackRock, State Street and Goldman Sachs. Others in the group include Intel, Alphabet and Walmart, Hewlett Packard, Twitter, Apple, Johnson & Johnson and NVIDIA.
Companies with no disclosures or extremely limited reporting included financial services firms Raymond James Financial, Willis Towers Watson, Ameriprise, Charles Fifth Third Bank and Franklin Resources. Others on the list include Berkshire Hathaway, Colgate Palmolive, Best Buy, Assurant, Loews Corp., and Marsh & McLennan Companies.
Benton said companies that refuse to release their data are becoming outliers. But she said As You Sow will continue to push for the information.
“We have had a very clear voice from the investor community that this is something they want to see leadership on,” she said. “When your investors say we want you to do this work, you do it.”