Financial executives have a large role to play in promoting the diversity of their employees and companies. Apart from societal conventions, it just makes good business sense.
General Motors (GM), having just avoided collapse and having outsiders navigate the auto giant through tough times, did something extraordinary late in 2013. For the first time, GM promoted a woman. Mary Barra, to the role of chief executive officer. Barra, who started with the company as an intern 30 years ago, served most recently as the chief of product development and quality for all GM cars and trucks. Arguably, she will be one of the highest-profile female CEOs in the United States and possibly the world.
While this move represents a positive step for diversity at the highest levels of corporate management in North America, is it a true reflection of what is occurring overall?
Diversity and company policies to promote it have certainly gained attention in recent years. Many companies have launched initiatives promoting diversity in the workplace, but often the numbers indicate much remains to be accomplished.
According to the Calvert Investments 2013 Diversity Report Examining the Cracks in the Ceiling: A Survey of Corporate Diversity Practices of the S&P 100, a "leaky" pipeline to management persists. For example, notes the report, women are often hired as frequently as men, however, their representation in management roles decreases with each step up the corporate ladder. The report says 56 percent of S&P 100 companies have no women or minorities in their highest-paid senior executive positions.
Also, the report stresses, although women make up 19 percent of board of director positions within the S&P 100, they represent only 8 percent of the highest-paid executives.
A separate report from Forbes Insights titled Diversity & Inclusion; Unlocking Global Potential, Global Diversity Rankings by Country Sector and Occupation, states that out of 1.5 million chief executives in the U.S., just one-quarter are women, and only one in 10 represents an ethnic minority. The report shows long-established cultural norms persist and that "tackling these diversity challenges in the U.S. and abroad is going to be extremely challenging."
There are. however, steps that can tip the balance, and much of it can come from the C-suite and CFOs of the companies interested in making headway on the diversity challenge.
Deborah Dagit has been a chief diversity officer for more than 22 years, including 12 years at Merck--her most recent position with a large company. Currently, she runs a diversity consulting practice in Washington, NJ. She says diversity is a long-term commitment that requires genuine support from the very top of an organization.
"Companies that make progress not only have verbal commitment but...