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February 15, 2000
Shareholders Assert that Equality is Good Business
A collection of shareholder resolutions this year raise equality issues from the level of employees
up to the board of directors.
SocialFunds.com --
Among the many social and environmental resolutions filed by shareholders for the coming proxy
season, several represent a growing concern about equality in the corporate environment. But
resolutions addressing racial and sexual diversity in boardrooms and managers' offices are not just
about representation, or even morality. They're about the bottom line.
 At least 26 shareholder resolutions have been
filed this year concerning equality for women and minorities in the workplace, according to the
Interfaith Center on Corporate Responsibility (ICCR), an umbrella group of religious and
institutional investors. A resounding theme among them is that corporations must embrace diversity
and inclusiveness to compete in an increasingly diverse marketplace.
"Even purely from a
public relations point of view, they're going to be more competitive," said Gary Brouse, Director
of the Equality Program at ICCR. "But also, a diversified board is going to be more competitive in
the diversified markets they have to deal with."
Seven of the resolutions sponsored with
the help of ICCR deal directly with diversity among members of the board of directors, including
those filed at Bed Bath & Beyond, Unocal, Cypress Semiconductor, and Gateway. These resolutions
strive for moving beyond the all-white male boards toward more equal representation of the U.S.
population, by asking that the companies report on efforts to encourage diversity.
Other
resolutions deal more generally with hiring and promotion practices that discriminate against
diversity, the proverbial "glass ceiling" that prevents women and minorities from being represented
in senior management positions. These resolutions, filed with Eastman Kodak, Circuit City, Home
Depot, and others, ask that the companies publicly disclose statistics identifying the sex and race
of employees in defined job categories.
The 1995 report from the Glass Ceiling Commission,
a bipartisan group charged with monitoring the advancement of equality issues in corporations,
found that women and minorities make up 57 percent of the work force, yet represent only 3 percent
of executive management positions. More women earn Masters degrees than men, yet 95 percent of
senior-level managers are men.
As if this is not impetus enough for reform of employee
hiring and advancement policies, the resolutions bring up historic litigation on discrimination
issues, such as Texaco's $170 million racial discrimination lawsuit or RR Donnelly's $500 million
federal class action discrimination suit. Loss of customers, such as the minority customers that
boycotted Denny's after 1992 discrimination complaints, are seen as a real threat to competitive
market performance.
"Unless you point these things out, unless you pressure these
companies, they're not going to make the move toward greater diversity," said Brouse.
A
new category of equal employment resolutions this year can be found in the five proposals
concerning discrimination specifically against Native Americans, filed with J.C. Penney, Pepsico,
and three other companies that have a history of such issues. Although these resolutions ask for
the same report of employee distribution as others, the supporting statements specifically address
issues of discrimination against Native Americans and negative images used in marketing.
The resolutions point out that while corporations have discontinued discriminating images and
names like Black Sambo and Frito Bandito, negative images of Native Americans like "redskin" and
"chief wahoo" remain in use. They cite a 1998 discrimination lawsuit filed by American Indian
firemen in the Chicago area for offensive and derogatory names and images used in the workplace,
calling attention to this often-overlooked minority.
"We wanted to focus our attention to
this issue, to not let this category be forgotten when we're talking about these issues," said
Brouse. "Native American people in this country have something more than a citizenship, they have a
special relationship with the government, they have a sovereignty that has to be respected, and we
don't feel that corporations are paying enough attention to this."
Resolutions against
Exxon, General Electric, and three other companies specifically address discrimination against gay
and lesbians. Although diversity and equal employment resolutions have historically included gays
and lesbians implicitly, these resolutions ask that the companies adopt explicit policy to bar
sexual orientation discrimination, citing examples of competitors who have done the same.
Although equal employment opportunity (EEO) and diversity issues have been the subjects of
shareholder resolutions for 25 years, progress has been extremely slow. Over 150 corporations now
publicly report on worker diversity and EEO information, among them Disney, Intel, K-Mart, and
Texaco, and public relation efforts in this area can be quite impressive. But are there corporate
leaders on the issue?
"If you find one, let me know," said Brouse. "Some companies just
needed to be challenged, and they've been challenged, and they've moved on. But none of them are
going to put me out of business. You do find minorities on some boards now, but does that mean the
boards are diversified? No. They have a long way to go."
©
SRI World Group, Inc. All Rights Reserved.
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