Even if only 16 Fortune 500 companies share detailed demographic information about their employees, it’s important to point out that the data that is available represents the race, gender and job category of more than 800,000 people – everyone from the CEO through service staff.
That’s an awful lot of workers. If that group were one giant U.S. company, it’d be second only to Walmart in terms of size.
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And it would take at least 26 skyscrapers to give each of those 5,089 executives and senior officials a corner office.
(The average skyscraper has about 50 floors; the U.S. Equal Employment Opportunity Commission fully explains which job titles get the “executive/senior officials and managers” designation in a footnote here.)
Of those high ranking officials, 80% are men and 72% of those men are white.
Using those 16 companies as a representative sample for the entire Fortune 500 cohort would result in a pretty wide margin of error: 24.3%. So, it’s important to point out that the workforce at 16 companies that share data isn’t a perfect predictor of the other 484. However, it seems likely that women at Fortune 500 companies see better representation in senior official roles than they do among CEOs.
The Most Powerful Women team reported on Wednesday that 32 of the CEOs on this year’s list are women. It’s an historic high-water mark that pushes their representation to 6.4%.
Seventy-three percent of the senior executives, men and women, are white. The rest are 21% Asian, 3% Latino/a, 2% black, 0.6% two or more races, 0.2% Native American and 0.1% Native Hawaiian or Pacific Islander.
Compared to the demographics of the overall employed workforce, Asian and white workers at these 16 companies are overrepresented in senior leadership by 15 and 10 percentage points, respectively. Latino/a and black executives are underrepresented by 9 and 13 percentage points.
People who represent two or more races are three times as common in the overall workforce as they are in senior executive roles. Meanwhile, Native Americans and Hawaiians or Pacific Islanders are underrepresented by 0.3 and 0.4 percentage points.
There’s lots of evidence, statistical and otherwise, that corporations struggle most with increasing diversity among their top leadership.
In fact, a former senior executive at American Express – which is ranked at #85 on this year’s list – talked to the Wharton School about in 2006.
He’s quoted in the Wharton article saying that just the mere presence of blacks in the CEO or chairman positions have an impact.
“It promotes change among the employees who are able to look at their peers in an entirely different light than [they did] in the late 1970s when I was in government,” said Weldon J. Rougeau, who was director of federal contractor compliance at the Department of Labor during the Carter administration.
“That’s all very good,” he continued. “Does it mean that there are not any problems in the workplace? No, of course not.”
At the time the article was published, American Express’s first black CEO, Kenneth Chenault, was 5 years into his now 16-year tenure. When he was named as the head of the company in 2001, he became the third black CEO of a Fortune 500 company.
TIAA’s (then TIAA-CREF) Dr. Clifton R. Wharton, Jr. was the first in 1987. In 1999 he was followed by Fannie Mae’s Franklin Raines, who was eventually ousted after the 2008 mortgage crisis. As of the release of the 2017 list, there are currently four black CEOs among the cohort: Roger W. Ferguson, Jr., another TIAA CEO; Kenneth C. Frazier of Merck; Chenault at American Express; and J.C. Penney’s CEO Marvin R. Ellison.
In January Xerox’s Ursula Burns, who became the first black woman CEO on the list in 2009, stepped down from her post. That meant there were no more black women among the Fortune 500 CEOs and that was still true when the new list was released yesterday.
There are just two women of color on the list: Geisha Williams, the Latina who runs PG&E and Indra Nooyi, the Indian American (she would be counted in the Asian category on an EEO-1 Report) CEO at PepsiCo.
One of those problems Rougeau may have been referring to when he talked about corporate diversity in 2006 is the way tokenism manifests for high-ranking people from marginalized communities. They wind up bearing the implicit responsibility to make sure other employees who look like them achieve a similar level of success.
That, said Dr. Kira Banks, leaves too many people on the bench when it’s time to increase corporate diversity and retention.
She’s an associate professor at St. Louis University and co-founder of The Mouse & The Elephant, a consulting firm that helps corporations execute on diversity initiatives. (They tell the story behind their name, based on a 2010 book by Laura Liswood, here.)
When Banks looked at the above diversity data for senior executives at 16 Fortune 500 companies, she was careful to point out that it need not be a depressing reminder that women and people of color – and other marginalized groups that aren’t counted on the EEO-1 Report – struggle to make it to the upper echelons of corporate America.
Rather, she said, we should delight in the number of potential allies who work for these titans of industry.
“I think the burden is on the predominantly white men in these positions to be intentional in speaking out about the pipeline and mentoring issues. It shouldn’t be our goal to say, ‘Hey, look, there’s another Asian woman who’s in this leadership position and that means I can make it too,’” she said.“That perpetuates tokenization.”
It’s often the case that the demographics of leadership are treated as a death sentence for the upward mobility of minority employees.
It wasn’t until last August that Business Roundtable, an association of CEOs whose companies represent 15 million workers, specifically cited diversity at the top of its list of characteristics to consider for board composition in its Principles of Corporate Governance guide.
“Diverse backgrounds and experiences on corporate boards, including those tho represent a broad range of society, strengthen board performance and promote the creation of long-term shareholder value,” the report said.
This was such a significant departure from previous editions of the report that it got a call out in The New York Times’ DealBook.
And on that point, it would seem the CEO group and Banks agree.
“You don’t have to be a person of color or a woman or a person from another marginalized identity to be a champion for diversity,” she said.