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WORKSPAN
REWARDING READS |

Representation: A Force in the Journey to Equality

“Rewarding Reads” is a space for articles and personal essays meant to be thought-provoking and informative for human resources professionals, from sharing the “human” perspectives on workplace issues to book reviews of business titles we find inspiring. Have an essay or blog post to share? Contact us at workspan@worldatwork.org.

Historic times call for historic measures — and monumental milestones. If 2020 has anything left to prove, it’s that people often draw their own conclusions from data, especially eye-opening data that should bring pause to us all. Since the global pandemic took root, women are leaving the U.S. workforce at a rate four times higher than men, according to the U.S. Bureau of Labor Statistics.

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As staggering as that statistic may sound, it’s not altogether surprising — caregiving responsibilities often fall on the shoulders of women. But many other visible and significant indicators this year illustrate that women and people of color are stepping up and finally shattering the glass ceiling.

On the heels of a presidential election that has Kamala Harris poised to become the first woman and woman of color as vice president of the United States, CVS Health this week named Aetna president Karen Lynch as the company’s new CEO, effective February 2021. This will make CVS Health the largest Fortune 500 company led by a woman.

Indeed, you might say it is in vogue these days for companies to take a particularly hard look in the mirror and at the makeup of their boards, executives, and general employee population. Some are adopting policies and strategies to build a diverse workforce and meet the goal of equality. Broader representation is a considerable force in the journey to equality, said Scott Cawood, CEO of WorldatWork.  

“As we see more women and people of color assume roles like CEO and vice president of the United States, it will open doors for more groups that have traditionally been excluded from accessing the most powerful positions in organizations, including the U.S. government,” Cawood said. “The additional benefit will be for consumers and citizens who gain from more diverse perspectives and experiences that ultimately enrich everyone’s life.”    

The crowning career achievements of Harris and Lynch are notable, as was the news reported this summer that Lisa Su of Advanced Micro Devices had become the first woman to top The Associated Press’ annual survey of CEO compensation. In addition, the Miami Marlins just today named Kim Ng as their next general manager in a historic move for Major League Baseball. Ng is the first woman and the first Asian-American GM in the league.

Despite these advancements, women remain significantly underrepresented as CEOs, making up just 5% of S&P 500 companies.

“Advancing women and other underrepresented groups . . . takes more than simply establishing diversity, inclusion and belonging programs,” said Holly Paul, chief human resources officer at FTI Consulting. “It takes a culture that enables impactful change and encourages honest dialogue and mutual respect.”

Law changes also could move the needle on fair and effective representation. In California, for example, boards of directors at more than 600 publicly held companies headquartered in the state must meet certain diversity requirements by the end of 2021 because of a new law signed by Governor Gavin Newsom. The law (AB 979) requires at least one person from an underrepresented community to be appointed to a company’s board by the end of next year. The law also dictates that by the end of 2022, corporate boards with four to nine members must have at least two individuals, and those with more than nine members must have at least three individuals, who are from underrepresented communities.

More Than Lip Service
Calls for diversity, equity and inclusion (DEI) at every level of leadership across multiple organizations — including tangible, concrete and actionable initiatives by government and public affairs organizations — continue to soar as social movements rise across the country, according to Roll Call, a source for news on Capitol Hill since 1955.

In addition to a growing list of state and city government mandates, many corporate-sponsored DEI efforts abound. To wit, Starbucks recently announced it will begin tying executive compensation to the company’s diversity goals in 2021.

Starbucks did not share specifics as to how executive pay will be impacted. But it did set goals for increasing the number of Black, Indigenous and People of Color (BIPOC) employees at all levels of the organization. Those goals include achieving at least 30% BIPOC representation at all corporate levels by the year 2025, and at least 40% representation in all retail and manufacturing roles in the same timeframe.

The link between compensation and DEI remains an infrequent practice. Mercer estimates that only 15% to 20% of S&P 500 companies include DEI metrics in their executive incentive plans. Only about 5-10% of those companies have an objective, quantitative DEI metric, while other companies include DEI goals and accomplishments as part of subjective individual or strategic performance metrics.

“Advancing DEI in the workplace is hardly a new idea, but many past DEI initiatives have fallen short of the real accountability needed to solve the problem,” said Gregg Passin, senior partner at Mercer. “Companies that want to pay more than lip service to their DEI goals are considering linking DEI goals directly to executive incentive plans.”

In other words, Corporate America, put your money where your mouth is.

About the Author

Dan Cafaro Bio Image

Dan Cafaro is the director of publications at WorldatWork.


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