No Perfect Corporate Diversity Score as Women and Minorities Remain Underrepresented

Highlights

  • Just 3 percent of companies were deemed 'excellent? in their diversity performance.
  • Six of 10 companies (59 percent) offer at least one or more family-friendly benefit to their employees.
  • Johnson & Johnson emerged as the diversity leader, with an index score of 90.
Out of more than 630 companies surveyed, not one received a perfect diversity score, according to the recently released Calvert's Social Index, the corporate investor's internal diversity ratings initiative. As an investor, Calvert has an interest in companies that operate on inclusion and diversity. To that end, Calvert developed its index to measure where to focus its efforts.   The index showed that most companies do not have a solid diversity approach or strategy, and therefore have a long way to go in terms of increasing representation of women and minorities. Johnson & Johnson emerged as the diversity leader, with an index score of 90.  

Calvert examined diversity policies, programs, and performance metrics, in addition to a wide range of 10 diversity indicators. Calvert reviewed organizations broadly, identifying leaders, average and underperformers, in an unprecedented evaluation of this kind.

Companies reviewed scored across Calvert's diversity ratings scale; unfortunately, most landed in the bottom half. Just 3 percent were deemed 'excellent? in their diversity performance. Nine companies revealed no public commitment to diversity. In addition, a limited number of companies disclosed the representation of women and minorities at a variety of levels of their organizations or indicators of how well these groups are advancing. Lack of disclosure inhibited Calvert from making qualitative evaluations of diversity efforts, instead reporting on their existence alone. It comes as no great surprise that companies that scored highest in commitment also scored high in the other nine indicators of excellence in diversity. In fact, companies that were more committed were also more likely to disclose their practices. The study showed that technology companies rated higher in the index, followed closely by the consumer industry.  

For each indicator, Calvert found:

  • Equal Employment Opportunity: Two-thirds (66 percent) of companies evaluated had policies that explicitly prohibit discrimination based on sexual orientation. Just 17 percent address discrimination based on gender identity and/or expression.
  • Internal Diversity Initiatives: More than one-third (37 percent) of companies in the index support some kind of internal diversity initiative, such as mentoring, networking, and employee resource programs and affinity groups.
  • External Diversity: Forty-three percent of evaluated companies operate with an external diversity initiative, such as recruitment geared toward diversity and supplier/vendor diversity outreach programs.
  • Scope of Diversity Initiatives: Thirty-percent of companies have programs that specifically target one or more traditionally underrepresented group, while 12 percent have programs that target three or four groups. The remainder of companies, 58 percent, did not score at all in this area.
  • Family-friendly benefits: Six of 10 companies (59 percent) offer at least one or more family-friendly benefit to their employees. The most utilized benefits include flexible work arrangements, domestic partner benefits, child care assistance and support, adoption benefits, extended leave for new parents, subsidized health and wellness benefits, and community involvement.
  • EEO-1 Disclosure: Just a mere 7 percent of companies in the index allowed EEO-1 disclosure, a comprehensive breakdown of a company's workforce by race and gender across employment categories and an indicator of hiring, retention, and advancement practices organization-wide.
  • Highest-Paid Executives: The majority ' 62 percent ' of companies have no female and/or minorities among their highest-paid employees. Just 9 percent of companies have two or more female and/or minority corporate officers.
  • Board Diversity: In contrast to the highest-paid executives category, at least one woman and/or minority serves on the board of a large number (83 percent) of companies. In fact, 53 percent of companies rated have two or more women and/or minorities on the board.
  • Director Selection Criteria: In their selection of directors, just more than half (53 percent) mentioned diversity in some form, with 12 percent of companies deemed 'strong? in their use of language regarding diversity.
  • Overall Corporate Commitment: Twenty-eight percent of companies generally show a commitment to diversity, measured by the extent to which a company's commitment permeates its culture. Sixteen percent of rated companies show a firm commitment, with extensive programs including external recognition, tying pay to diversity performance, diversity councils or committees, and/or board accountability for reaching diversity goals.
Calvert concludes with guidance to companies as to how to make the much-needed improvements to their diversity initiatives. To review Calvert's recommendations and the study in its entirety, click here.

Written by: Bright Horizons Blog Editor

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