Diversity Hiring Policies

The striking race gap in corporate America

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https://www.washingtonpost.com/business/interactive/2021/black-executives-american-companies/?itid=hp-top-table-main

A small fraction of top executives are Black — and the people tapped to fix it often struggle to boost inclusion

(Luisa Jung for The Washington Post)

By Tracy JanDec. 15, 2021944

Days had passed since George Floyd’s murder, and Lee Jourdan, then Chevron’s chief diversity and inclusion officer and one of the highest-rankingBlack executives at the oil giant, was struggling for the right words. “I’m scared,” he wrote at last in a company blog post. What he needed from his Chevron colleagues was “a collective recognition that racism exists” — including at work, “hidden behind titles and badges and smiles.”

Over the next year, Jourdan said he saw White senior executives striving like never before to understand what it’s like to be Black at Chevron. But he was disappointed with the results of Chevron’s efforts to increase Black representation at the company.

“It became a battle between how far do we want to lean into this and not wanting to turn folks off,” Jourdan, who retired from Chevron in May,said in an interview.Story continues below advertisement

Eighteen months after the country’s leading businesses pledged to address racial inequality within their ranks, a Washington Post review of the 50 most valuable public companies reveals thatBlack employees represent a strikingly small fraction of top executives — and that the people tapped to boost inclusion often struggle to do so.

According to the analysis, only 8 percent of “C-suite” executives — the highest corporate leaders, often those reporting to the CEO — are Black.

[George Floyd’s America: Examining systemic racism and racial injustice in the post-civil rights era]

At least eight companies — Walmart, Nvidia, Cisco,Pfizer,T-Mobile, Costco, Honeywell and Qualcomm — list no Black executives among their leadership team as of December, according to information they supplied to The Post.

The percentage of Black executives in the C-suite equals or surpasses America’s Black population of 12 percent at 10 companies. Within that group, Black executives made up at least 20 percent of the C-suite at five companies — Merck, UPS, AT&T, UnitedHealth Group and Home Depot.

Fourteen companies declined to share the racial composition of their top executives.

“It became a battle between how far do we want to lean into this and not wanting to turn folks off.”— LEE JOURDAN, CHEVRON’S FORMER CHIEF DIVERSITY AND INCLUSION OFFICER

The review also shows that the diversity chiefs whom companieshave increasingly relied on to foster inclusive workplaces and expand career opportunities for underrepresented groups are often not adequately empowered.

Only 13 companies include their diversity chiefs in top leadership, the review showed.Without that seat at the table, some current and former chief diversity officers say they have limited influence and authority to push through their initiatives.

Diversity chiefs face pressure to create opportunities for all underrepresented groups, including women and LGBTQ employees. But many say special attention must be paid to Black employees, who typically trail other racial demographics in senior leadership ranks. Since Floyd’s death, more corporations are beginning to acknowledge the role racial bias has played in how Black employees are treated and evaluated, hampering their chances of promotion. However, some diversity chiefs and consultants question how corporate America will respond to an increasing public backlash.

“At the end of the day, I measure success by what’s happening with Black representation in these organizations,”said Rosalind Hudnell, Intel’s longtime chief diversity officer who retired in 2018. “If you have a chief diversity officer and their CEO has said ‘we care about Black lives’ and there are no Black lives in the C-suite, success has not been achieved.”

The Business Roundtable, which represents the CEOs of more than 200 companies, declined to respond on the record to The Post’s findings and instead pointed to its members’ efforts to advance racial equity since Floyd’s death, including “creating opportunities for employees of color to take on managerial positions.”

“Real progress has been made, and Business Roundtable CEOs know that much more is needed to close the racial wealth gap and address other inequities faced by communities of color,” the BRT wrote in November in the one-year update to its racial equity initiative.

[The Forgotten Ferguson: Four years after Michael Brown was shot by police, the neighborhood where he was killed still feels left behind]

Since Floyd was killed by police in May 2020, the 50 biggest companies have pledged nearly $50 billion toward racial justice causes, according to a previous Post analysis. Virtually all have reported to shareholders a renewed commitment to diversity and inclusion.

Mentions of “diversity” and “inclusion” in annual reports filed to the Securities and Exchange Commission jumped sixfold from 2019 to 2020, according to a Post analysis. In 2020, 46 of the 50 companies included at least one diversity-related word in their filing. Just 17 did so in 2019. The word “racism” did not appear.

Many companies only began discussing diversity

in their 10-K filings to the SEC last year

How frequently companies used the terms “diversity,” “inclusion,” “equality,” “racial” and “justice” in their annual reports to the Securities and Exchange Commission. Almost every company said “diversity” or “inclusion,” while just 13 said “equality” or “inequality.”

* Seven companies filed their 2020 10-K reports before a Nov. 9, 2020 SEC rule change required a section on human capital. Note: Uses of these words in unrelated contexts were excluded.

Source: Post analysis of SEC 10-K filings

Chevron added a “Diversity and Inclusion” section to its 2020 SEC report —but only in reference topromoting “neurodiversity” and supporting “women reentering the workforce” — not race.

A Chevron spokeswoman said the SEC filing describes measures intended to “further advance” the company’s diversity and inclusion practices.

While 27 of the 50 companies surveyed by The Post report tying a portion of executive compensation to diversity measures — with McDonald’s, Google, Procter & Gamble, PayPal, Apple and Wells Fargo having made the change since Floyd’s murder —few outline the criteria for determining such awards.Wells Fargo, for example, compensates senior leaders for increasing gender, racial and ethnic representation in executive ranks.

[Corporate America’s $50 billion promise]

And while pay equity studies, a tool used to identify racial disparities, are now widespread, more than a dozen companies do not break out minority groups by race, confining their reports to White and minority employees. Company statements on having successfully achieved pay equity often mask gaps between how different minority groups are faring.

“Companies say they want to tackle systemic racism, but people are so uncomfortable talking about race,” said Mary-Frances Winters, whose consulting firm works with corporations on diversity, equity and inclusion. “Most of our clients do not want to talk about ‘white supremacy’ culture. They are most comfortable using terms like ‘belonging’ and ‘inclusion’ because they are nice terms.”

How the 50 most valuable companies stack up on these diversity measures

COMPANYCHIEF DIVERSITY OFFICER DEMOGRAPHICSWHO CDO REPORTS TOIS CDO IN C-SUITE?IS EXEC. PAY TIED TO DIVERSITY?PCT. OF C-SUITE WHO IS BLACK
AT&TBlack manHR22%
AbbVieBlack woman9%
AbbottBlack manHR9%
AdobeBlack manHR
Alphabet (Google)Black womanHR
AmazonBlack womanHR4%
AppleBlack womanHR6%
Bank of AmericaBlack womanHR7%
Berkshire Hathaway
Broadcom
ChevronBlack womanHR18%
CiscoBlack womanHR0%
Coca-ColaBlack womanHR10%
ComcastBlack/Asian womanCEO14%
CostcoWhite manCEO0%
DanaherWomanHR
DisneyBlack womanHR
Eli LillyWhite womanHR6%
Exxon Mobil
Home DepotBlack manHR20%
HoneywellBlack womanCEO & HR0%
IntelBlack womanHR
JPMorgan ChaseBlack manCOO8%
Johnson & JohnsonBlack womanCEO & HR9%
MastercardBlack manCAO3%
McDonald’sBlack manHR
MerckBlack womanHR25%
Meta (Facebook)Black womanCOO8%
MicrosoftWhite womanHR14%
NetflixBlack womanHR13%
NextEra Energy
NikeBlack womanHR19%
NvidiaHispanic womanHR0%
Oracle
PayPalBlack womanHR8%
PepsiCoWhite womanHR4%
PfizerBlack manHR0%
Procter & GambleWhite womanCEO6%
QualcommBlack manHR0%
SalesforceHispanic womanHR6%
T-MobileWomanHR0%
Tesla
Texas Instruments
Thermo Fisher ScientificBlack womanHR10%
UPSBlack womanCEO25%
UnitedHealth GroupBlack womanHR22%
VerizonHispanic womanHR
VisaBlack womanCEO7%
WalmartBlack manHR0%
Wells FargoHispanic manCEO11%

Click to expand

Note: Jump to full methodology.

Sources: Corporate responses to Post inquiries and company reports. The list of the 50 most valuable companies is from S&P Global Market Intelligence, as of April.

Building empathy in the C-suite

As millions took to the streets to protest Floyd’s death, Jourdan sensed momentum behind efforts to address systemic racism within corporate America — including at Chevron. To his surprise, the company tweeted “black lives matter” and proclaimed support for “all those seeking systemic change.” CEO Mike Wirth shared Jourdan’s blog post and urged employees to reflect on their biases.

“Here was an opportunity to really lock in our racial equity plan while everybody was still up in arms about what happened,” Jourdan said he thought at the time.

[CEOs say they are committed to racially inclusive economic growth, but is it just talk?]

But he said he had to tread carefully, mindful that the energy industry was relatively conservative and more White than other sectors. Black people represent 4 percent of oil and gas workers. (ExxonMobil, for instance, is one of the corporate giants that doesn’t have a diversity chief. Instead, a spokesman said diversity is a priority that is spread throughout the company.)

And while some companies rushed to embrace Juneteenth as a paid holiday, Chevron does not grant employees the day off to mark Martin Luther King Jr.’s birthday, a federal holiday since 1983.Story continues below advertisement

Every year, Black employees looked to him to get it done, Jourdan said. And every year, he was charged with explaining why the answer would be no. That did not change with Floyd’s death.

“I had to put the corporate hat on and I would say, ‘Chevron does provide a floating holiday so if it’s important to you, you can take it off,’ ” Jourdan said. “I would like to have seen Chevron give MLK Day as a holiday. It was never comfortable saying no to them, but I had to choose my battles.”

Chevron said it encourages employees to use their “personal choice” day for any holiday the company does not recognize.

[Facebook’s race-blind practices around hate speech came at the expense of Black users, new documents show]

Jourdan instead focused on changes he felt were more immediately deliverable — such as injecting a measure of accountability into the “diversity objective” long required of every Chevron employee as part of their annual performance review.

In the past, he said, “sometimes people would say they attended a Hispanic event and had some Mexican food.”Now employees can choose from a list of options such as joining an employee network representing different backgrounds or reading about critical race theory and other topics.Story continues below advertisement

But his overarching objective was to give Black people a better shot at competing for top assignments and executive positions. Jourdan and his boss Rhonda Morris, the chief human resources officer who at the time was Chevron’s sole Black C-suite executive, started by getting White senior leaders to learn more about the routine biases Black employees face at work.

Jourdan recalled watching a video, along with top executives, in whichone Black manager shared the hurt and embarrassment she felt while waiting in a conference room to meet with another manager, a White woman, who peered into the room several times before realizing that she was in the right place.

[Corporations are working with social media influencers to cancel-proof their racial justice initiatives]

Black employees also met regularly with C-suite executives one-on-one to help them empathize with what it’s like to be Black at Chevron — “so they understand the head winds that we face that they don’t have to face,” Jourdan said. Often the only Black person in the room, Jourdan said he is always conscious of how negative stereotypes play into how he is treated by his White peers. “You have to prove that you are more than what they perceive a Black man to be,” he said. “You’re always starting in a hole.”

Chevron declined to make any White executives available for an interview. Wirth has said that Chevron is deeply engaged in internal discussions about understanding biases and assumptions about Black colleagues.

“What are the things that I may not be as consciously aware of as I should?” Wirth told the Milken Institute, an economic think tank, last year. “What should we be doing better inside the company to create opportunities?”

Jourdan faced more difficulty persuadingChevron to provide Black employees with official “sponsors” in senior leadership — mostly White men who could advocate for them, replicating the informal networks that have long benefited other mostly White men. “It’s a hidden path to success that people are not aware of and don’t have access to,” Jourdan said.

Jourdan was able to convince the chief financial officer to pilot a formal sponsorship program open to high-performing employees from all demographics.But many executives have yet to embrace sponsorship, seeing it as preferential treatment, Morris said.

“Sponsorship is something that could get someone’s back up, making our progress not as fast as I’d like it to be,” Morris said. “If you push something on someone, it’s not going to work.”

Jourdan and Morris have had other successes in addressing systemic racism. They persuaded Chevron to introduce stronger measures to root out bias in promotions. The company started by training and assigning“inclusion counselors,” neutral observers, to sit in on twice yearly job assignment and promotion meetings to listen for biases and help decision-makers avoid “group think.” If an employee was not shortlisted for a promotion because no one in the room knew that candidate well, the inclusion counselor may advise that the committee take the time to talk to someone who does.Story continues below advertisement

In the past year, the company hasbuilt on this by examining racial disparities in project assignments, performance rankings, and attrition and promotion rates, and started mitigating for hidden bias. “Sometimes we look at the end game and say we’re being objective, that this is a meritocracy and we’re promoting so-and-so because they have high performance, worked on the right projects, networked — and all three of those things are influenced by subjectivity and bias,” Jourdan said.

Jourdan said he had pushed Chevron to publicly share promotion data disaggregated by race, but the company was not yet ready to do. Transparency would go a long way toward dispelling assumptions of the White male majority that people of color are getting all the promotions, he said.

[How two Black CEOs got corporate America to pay attention to voting rights]

“That’s where Chevron needs to go deeper — to make sure leaders really understand the root of those issues,” he said.

Morris said Chevron is on a “transparency journey” and shared candidate demographics and the names of colleagues who sit on job selection teams with employees during its 2020 restructuring.

Creating space

Jourdan’s views about opportunity were shaped by his upbringing in Rowland Heights, Calif., in the 1960s and early ’70s. The only Black people in town, he said, were the five members of his immediate family — his mother, a teacher and mathematician who computed numbers by hand for aeronautical programs similar to the women depicted in the movie “Hidden Figures”; his father, who rose from a shoeshine boy during the Great Depression to a logistician on President Ronald Reagan’s Star Wars nuclear defense program; and his two brothers.

Despite his parents’ achievements, Jourdan recognized that skills and drive alone do not guarantee success. There must also be opportunity. “They were unicorns,” Jourdan said. “They worked very hard and did very well. So it is possible. But the stars have to align.”

A high school gymnast who was recruited into the U.S. Military Academy, Jourdan had worked at three other energy companies before landing at Chevron in 2003. He became a vice president leading Chevron’s business development in Southeast Asia, an opportunity he credited to a White executive who he later recognized had been his sponsor.

“What I’ve found makes the difference is someone has to create space for you — space that seems to exist already if you’re in the majority,” he said.

[Wall Street says it cares about diversity. But most big banks won’t share complete workforce data.]

When he returned to Houston for a role placing senior managers around the globe, he asked an analyst to run the numbers on the dearth of Black leaders. He was so disheartened by the report that he packed his bags in the middle of the afternoon and went home. His wife urged him to do something about it, inspiring him to take on the role of diversity chief in 2018.

In 2019, at Jourdan’s urging, Chevron became the first major oil and gas company to publicly share disaggregated demographic data by employee rank and race, he said — information that was already being reported annually to the federal government. (Forty of the 50 biggest companies surveyed by The Post now release such data.)Story continues below advertisement

Black employees represented just 3 percent of Chevron’s executive and senior managers, the lowest of any demographic, while minorities overall reached 19 percent of senior ranks. And yet, he said he was disappointed that the stark racial disparities revealed by the data did not immediately awaken the rest of the company to the challenges facing Black workers.

“When they saw Blacks were lagging, they didn’t consider that systemic racism or bias may have played a role,”Jourdan said. “It’s taken a lot for people to recognize what’s happening.”

Black employees in senior management inched to 4 percent by the end of 2020,when minorities reached 24 percent. And the overall percentage of Black employeesat Chevron has remained at 8 percent since 2014. Chevron has yet to publish its 2021 figures but a spokeswoman noted that there are now two Black executives in the C-suite.

“I don’t know if I’ve made as sustainable of a change as I would have liked,” Jourdan said.

“Until you really start to hit value points like money and promotions, you just don’t move the needle.”— WENDY LEWIS, FORMER CHIEF GLOBAL DIVERSITY OFFICER FOR MCDONALD’S

‘It was like triage’

Across corporate America, the prominence of diversity chiefs rose after Floyd’s murder — along with expectations.

At McDonald’s, Wendy Lewis, then the company’s chief global diversity officer, recalled senior executives flocking to her as a Black womanto learn “the whole critical truth”about Black employees’ experiences and seeking her expertise on how tourgentlyincrease Black representation in senior ranks.

“We typically do not sit at the innermost table,” said Lewis, who retired in September 2020 after four years at McDonald’s. “Overnight, it was like triage. You became one of the most significant players in the organization.”

But as Lewis later discovered, diversity chiefs often do not have adequate authority to drive deep change.“You rose to a higher level, but you still hit a lot of walls,” she said.

[She was Morgan Stanley’s first diversity officer. Now she’s suing the bank for racial bias.]

The Post survey found that nearly three-quarters of diversity officers — a role most commonly held by Black women — at the country’s biggest companies continue to report to human resources rather than the CEO. They often lack control over budgets and other resources, hiring and promotions, and business decisions that impact corporate profits and losses, key ways of gaining power and respect, according to interviews with more than a dozen current and former diversity chiefs. Nearly all of the companies surveyed said their diversity chiefs had regular access to the CEO.

Even before Floyd’s death, Lewis began discussing concrete ways to get executives invested in diversity. She first raised the idea of tying total executive compensation to diversity goals during her job interview with McDonald’s.Story continues below advertisement

“Until you really start to hit value points like money and promotions, you just don’t move the needle,” she said. “We say we have these critical commitments and sometimes to me, the performance outcomes — the accountability — weren’t as clear as I would like it to be.”

Too often, she said, diversity goals become “loose and subjective” parts of performance reviews, treated like something extra instead of prioritized like other business objectives. Diversity work should have transparent expectations, measurements and financial rewards if it’s to be seriously valued, she said.

Ultimately, Lewis decided she could be more effective working independently as a consultant.

In February, five months after Lewis’s departure, McDonald’s announced that 15 percent of executive bonuses would be based on increasingrepresentation within leadership for women and historically underrepresented groups and creating a strong culture of inclusion.

[This retired baseball player built the largest Black-owned McDonald’s franchise operation. Now he’s suing the fast-food chain for its ‘racist’ policies.]

While she said she would have liked to see higher percentages of executive compensation tied to diversity goals — not just bonuses — Lewis praised the move.

“They have created a value around what is considered leadership performance,” she said.

McDonald’s, in announcing the new compensation incentive, said: “For the first time in our history, we’re implementing policies that hold our leaders directly accountable for making tangible progress on our [diversity, equity and inclusion] goals.”

Otherwise, Lewis said, diversity initiatives tend to be crisis driven, quick fixes. It’s not enough to hold companywide “courageous conversations,” with Black employees sharing their personal experiences with racism, she said; managers should also focus on addressing the racism.

The backlash

At Chevron, as more months passed since Floyd’s death and the country’s political divisions widened, Jourdan said his ability to communicate frankly about race and privilege was sometimes met by more internal resistance.

Following the Jan. 6 assault on the U.S. Capitol by supporters of President Donald Trump, Jourdan penned a company blog post on privilege, juxtaposing the lack of immediate military response to the rioters — nearly all of whom were White — to the deployment of the National Guard during the Black Lives Matter protests after Floyd’s murder.

“The majority White crowd got the benefit of the doubt,” he said — just as so often happens at work.

While most of the company responded positively, he said a few White colleagues chafed at the concept of White privilege. In a subsequent meeting with Jourdan, one recited an oft-quoted conservative favorite from Martin Luther King Jr.’s “I have a dream” speech, asserting that people should be judged not by the color of their skin, but by the content of their character.

To which Jourdan responded: “We do not have an environment that allows people to be judged by the content of their character.”

Kevin Schaul, Andrew Van Dam and Scott Clement contributed to this report.

Methodology

The Washington Post surveyed the country’s 50 largest companies as determined by market capitalization in April, pulled from S&P Global Market Intelligence, on their top diversity executives — including race, gender, reporting structure and details about shifts in resources and responsibilities. The Post also asked about the link between executive compensation and company diversity measures, federal demographic data, details about racial pay equity and C-suite demographics. In total, The Post collected data from 41 companies — 4 did not respond and 5 offered only limited responses.

In addition, The Post searched each company’s annual 10-K report to the Securities and Exchange Commission from 2016-2020, for mention of words including “diversity,” “inclusion,” “equality,” “racial” and “justice.” Uses of these words in unrelated contexts were excluded.

McKenzie Beard, Caroline Cliona Boyle, Heather MacNeil, Aneeta Mathur-Ashton, Vanessa Montalbano, Megan Ruggles, Nick Trombola and Carley Welch with the American University-Washington Post practicum program helped collect survey data.

Editing by Suzanne Goldenberg. Copy editing by Susan Doyle. Graphics by Kevin SchaulPhoto editing by Haley Hamblin. Design and development by Betty Chavarria.Updated December 17, 2021

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Resources: Understanding racism and inequality in AmericaTracy JanFollowTracy Jan covers the intersection of race and the economy for The Washington Post, a beat she launched in December 2016. She previously was a national political reporter at the Boston Globe.