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Corporations have come a long way from posing questions about the relevance of diversity. Studies and statistics about emerging demographics, minority spending power, and the globalization of the marketplace have moved
the discussions well past whether or not a corporation should embrace diversity to how it can make inclusion part of its corporate fabric. There have also been numerous examples of the bottom-line benefits of diversity. In 2006, several of the 500 largest publicly traded companies headed by women outperformed the Standard & Poor’s 500 index. African American senior executives including Merrill Lynch & Co. Chairman and CEO Stanley O’Neal, Aetna Chairman and CEO Ronald A. Williams, and Time Warner Chairman and CEO Richard D. Parsons have also significantly driven stockholder value in companies that were struggling before they took the helm.
But despite forecasts of continually changing demographics and a variety of success stories, many corporations still struggle with actually making diversity work. It doesn’t, however, prevent many of these companies from waving a diversity banner. Since diversity has become one of the biggest corporate trends in recent times, companies have been offering intentions of support but not quite committing to policies, resources, and strategies for effective implementation.
Although BLACK ENTERPRISE has been covering diversity practices for 36 years — long before it was labeled as such — we have been statistically tracking corporate behavior in this area for three years through surveys sent to the top 1,000 publicly traded companies and 50 leading global companies with significant U.S. operations. These surveys judge diversity performance based on the representation of African Americans and other ethnic minorities in four key areas: corporate boards, total workforce, senior management, and corporate procurement. For the past two years, all four areas had been equally weighted to develop a list of the Best Companies for Diversity. This year, however, as BE reveals its list, we decided to draw a more definitive line in examining the commitment that companies say they have made to diversity by weighing more heavily on two of the four categories: procurement and senior management.
Experts agree that although all four areas are important in determining a company’s commitment to diversity and inclusion, it is easier to measure that commitment in the categories of procurement and senior management. “Those two areas are high-impact areas, and you can have high impact immediately as well as tremendous influence,” explains Marlon Cousin, managing partner of the Marquin Group, a diverse executive recruiting firm based in Atlanta.
“You can measure senior leadership and its impact on policies and programs that affect minority issues such as mentorship and talent management or the understanding of new, emerging markets. You can measure the outreach effect that supplier diversity has on communities in creating jobs and opportunities. When a minority supplier employs 25 more people because of a contract with a large corporation, that creates economic stability and educational growth within families,” he continues. “It’s important, but it’s hard to measure the effect of board participation or a workforce where employees are more involved in