WORKFORCE DIVERSITY AND CORPORATE GOVERNANCE. A Quantitative Analysis of Diversity and Inclusion in Texas Fortune 1000 Companies August 2016

Transcription

1 WORKFORCE DIVERSITY AND CORPORATE GOVERNANCE A Quantitative Analysis of Diversity and Inclusion in Texas Fortune 1000 Companies August 2016

2 As Founder and Chairman and as the Chief Executive Officer of the National Diversity Council (NDC), we are proud to present the inaugural issue of the Texas Fortune 1000 Diversity & Inclusion Annual Report. Without question, 2016 has been eventful for the NDC and our surrounding community, and the events of the year make this report timelier than ever. We all continue to witness how rapidly changing demographics are altering the face of the available workforce, particularly in majority minority Texas largest urban areas. This is great news as we see diversity as a gain and not a deficit. Yet along with an increased focus on diversity and inclusion, leading to a more representative workforce, not all has been a gain. As a matter of fact, there is quite a diversity gap when it comes to positions of executive leadership and on boards of directors. This report, which looks at Texas Fortune 1000 corporations illustrates this in a very simple way. Texas largest corporations continue to lag behind the nation in overall racial, gender and ethnic diversity, especially so when it comes to corporate governance. We hope this report stimulates conversation, focus, and helps bring about much needed change and action. Particular attention is paid to those Fortune 1000 corporations located in Texas 2 largest metropolitan areas. For the more than 2,000,000 Texas companies not included in the report, consider this a benchmark by which you can measure your own progress. We at the National Diversity Council will continue to work closely to track and publish this report on an annual basis, with the intention of helping Texas companies establish corporate governance focused on diversity and inclusion standards that will serve as model for the entire nation. We stand ready to assist, advise, or even create diversity and inclusion programs that will help your organization better recruit, retain, innovate, and become recognized as a leader in the areas of corporate social responsibility and corporate governance. On behalf of all of us at the National Diversity Council, Dennis Kennedy Angeles Valenciano Founder and Chairman National Diversity Council Chief Executive Officer National Diversity Council 1

3 TABLE OF CONTENTS FIGURES 4 EXECUTIVE SUMMARY 5 METHODOLOGY 6 CHARACTERISTICS OF THE DATA Companies Surveyed 7 ORGANIZATIONS WITH THE HIGHEST PERCENTAGE OF 9 WOMEN AND MINORITY INCLUSION MINORITY AND WHITE LEADERSHIP BY POSITION Executive Leadership in Texas Fortune 1000 Corporations 10 Boards of Directors in Texas Fortune 1000 Companies 11 CEO Positions in Texas Fortune 1000 companies 12 WOMEN IN TEXAS FORTUNE 1000 AND NATIONAL S&P 500 Women National Statistics 13 Women Executive Leadership and Board of Director Representation in 14 Texas Fortune 1000 LATINOS IN TEXAS FORTUNE 1000 AND NATIONAL S&P 500 National Latino/Hispanic Representation in the Board Room 15 Latino/Hispanic Representation in the Board Room at Texas Fortune HARRIS COUNTY (HOUSTON) FORTUNE 1000 Harris County Demographics and Racial Composition of Executive 17 Leadership and Boards of Directors Harris County Women in Executive Leadership and Boards of Directors 19 DALLAS COUNTY FORTUNE 1000 Dallas County Demographics and Racial Composition of Executive 20 Leadership and Boards of Directors Dallas County Women in Executive Leadership and Boards of Directors 22 COMPANIES WITH PUBLISHED DIVERSITY & INCLUSION STATEMENTS Texas Fortune 1000 Companies with Published D&I Statements 23 Minority and White Executive Leadership for Texas Fortune 1000 with 24 Published D&I Statements 2

4 Minority and White Boards of Directors for Texas Fortune 1000 with Published D&I Statements CONCLUSIONS AND POINTS FOR DISCUSSION REFERENCES

5 FIGURES Figure Description Page 1 Number of Minorities and Whites in Executive Leadership, Executive Leadership Racial Demographics Number of Minorities and Whites on Boards of Directors, Boards of Directors Demographics, Texas CEO Demographics, Women in S&P 500 Companies 13 7 Gender in Executive Leadership Positions, Gender in Board Positions, Disproportionate Hispanic Representation in the Corporate Boardroom Latinos and Texas Boards of Directors, Harris County (Houston) Racial Demographics, Harris County Ethnic Demographics, Executive Leadership and Board Positions in Harris County, Gender in Harris County Companies, Gender in Harris County, Dallas County Racial Demographics, Dallas County Ethnic Demographics, Demographics of Executive Leadership and Board Positions in Dallas County, Gender in Dallas County Companies, Gender in Dallas County, Diversity and Inclusion Statements in Texas Fortune Minority and White Executive Leadership in Companies with D&I Statements, Executive Leadership Demographics in Companies with D&I Statements, Minority and Board Positions in Companies with D&I Statements, Board Demographics in Companies with D&I Statements,

6 EXECUTIVE SUMMARY Across cities in Texas, the public and stakeholders are increasingly demanding that corporations place people on equal grounding with profits. To address this fundamental aspect of Corporate Social Responsibility (CSR), Texas major corporations are implementing Diversity and Inclusion (D&I) practices and programs that are leading to a more diverse workforce. Yet, when it comes to leadership, there is still much to do. This research examines the demographic composition of executive leadership (EL) and the boards of directors of 100 Texas Fortune 1000 companies. In particular, it documents the current underrepresentation of women and historically underrepresented groups (referred to hereinafter as minorities ) in the boardroom and in senior leadership roles. Facts worthy of note: White men held approximately 75% to 80% of all leadership positions in the Texas Fortune 1000 companies, and the percentage of the seats held by white parties (men and women) remained above 90% in Dallas County and Harris County (Houston). Although minorities are becoming an ever larger part of the population in these two counties, there is a significant gap in representation when it comes to leadership. Of the slightly more than 40% of Texas Fortune 1000 companies that publicized their Diversity and Inclusion Statements, 79.4% of their leadership positions are held by white men. This statistic showed there were no meaningful differences in the makeup of the leadership positions for those companies with diversity statements on their websites and those without such statements. When compared to companies across the United States, Texas companies do not meet national averages for representation of women in leadership positions. Across the United States, women comprised 29.3% of all executive leadership positions and 19.9% of all board of director positions. In Texas Fortune 1000 companies, women held 14.3% of executive leadership seats and 16.0% of board positions. Hispanics and Latinos comprised 16.0% of the population of the United States in 2013, but more than twice that (39%) in Texas (Pew Research). Nevertheless, only 3.12% of board seats in U.S. corporations were held by Hispanic or Latino individuals in 2016 and only 2.4% in Texas. 5

7 METHODOLOGY The study is based on quantitative data collected from 100 Fortune 1000 Companies across the State of Texas. We have defined positions of leadership to include two possibilities: 1) Executive Leadership, defined as individuals in senior management and 2) the members of the Boards of Directors. To measure racial and ethnic diversity across the companies, we looked at biographical information on directors and executive leaders. We retrieved this information from official company websites or other public sources including and In cases where this data was not publicized, we sent s to media and news departments in the companies requesting additional biographical information. Diversity was measured from a census-based approach, drawing racial and ethnic categories from the most recent 2010 United States Census Survey. Under this approach, minority included all individuals who would be identified as Black or African American, American Indian or Alaskan Native, Asian, Pacific Islander, Hispanic or Latino, or Other. We also compared company minority demographics to larger scales. Using the 2010 United States Census data, we retrieved demographic data for racial and ethnic minorities in Harris and Dallas Counties and compared this data to data for Fortune 1000 companies in those counties. In addition, we retrieved national gender statistics in S&P Companies from and national statistics on Hispanics or Latinos on corporate boards from the Hispanic Association on Corporate Responsibility (HACR). The companies public commitment to Diversity and Inclusion was also considered when gathering data. In order to gauge their commitment and whether this had any effect in company leadership demographics, we evaluated companies who had clear Diversity and Inclusion statements on their company websites, outside of the standard Equal Employment Opportunity (EEO) Policy Statement. 6

8 CHARACTERISTICS OF THE DATA Of the 100 Texas Fortune 1000 corporations, 53 were headquartered in Houston (Harris County) and 25 were in Dallas County. For the remaining 22 companies, 6 had their headquarters based in San Antonio, 6 in Plano, 2 in Fort Worth, and one company in each of the following cities: Angleton, Austin, Denton, El Paso, Galveston, McKinney, New Braunfels, and Southlake. Plano and McKinney are contiguous suburbs of Dallas. Harris County COMPANIES SURVEYED 1. Adams Resources & Energy, Inc. 28. Linn Energy, LLC 2. Anadarko Petroleum Corporation 29. Marathon Oil Corporation 3. Apache Corporation 30. MRC Global Inc. 4. Baker Hughes Incorporated 31. National Oilwell Varco, Inc. 5. BMC Software, Inc. 32. Newfield Exploration Company 6. Buckeye Partners, L.P. 33. Nexeo Solutions Holdings, LLC 7. Calpine Corporation 34. Noble Energy, Inc. 8. Cameron International Corporation 35. Oceaneering International, Inc. 9. CenterPoint Energy, Inc. 36. Oil States International, Inc. 10. Concho Resources Inc. 37. Patterson-UTI Energy, Inc. 11. ConocoPhillips 38. Pioneer Natural Resources Company 12. Crown Castle International Corp. 39. Plains GP Holdings, L.P. 13. Dresser-Rand Group Inc. 40. Quanta Services, Inc. 14. Enlink Midstream 41. Service Corporation International 15. Enterprise Products Partners L.P. 42. Southwestern Energy Company 16. EOG Resources, Inc. 43. Spectra Energy Corporation 17. EP Energy Corporation 44. Stewart Information Services Corporation 18. Exterran Holdings, Inc. 45. Superior Energy Services, Inc. 19. FMC Technologies, Inc. 46. Sysco Corporation 20. Genesis Energy, L.P. 47. Targa Resources Corp. 21. Group 1 Automotive, Inc. 48. The Men's Wearhouse, Inc. 22. Halliburton Company 49. Trinity Industries, Inc. 23. HCC Insurance Holdings, Inc. 50. Waste Connections, Inc. 24. Insperity, Inc. 51. Waste Management, Inc. 25. KBR, Inc. 52. Westlake Chemical Corporation 26. Kinder Morgan, Inc. 53. Willbros Group, Inc. 27. Kirby Corporation 7

9 Dallas County 1. American Airlines Group Inc. 14. GameStop Corp. 2. AT&T 15. HollyFrontier Corporation 3. Atmos Energy Corporation 16. Kimberly-Clark Corporation 4. Brinker International, Inc. 17. Lennox International Inc. 5. Celanese Corporation 18. Michaels Stores, Inc. 6. Comerica Incorporated 19. Neiman Marcus Group LTD Inc. 7. Commercial Metals Company 20. Primoris Services Corporation 8. Dean Foods Company 21. Southwest Airlines Co. 9. Energy Future Holdings Corp. 22. Sunoco LP 10. Energy Transfer Equity, L.P. 23. Tenet Healthcare Corporation 11. Flowserve Corporation 24. Texas Instruments Incorporated 12. Fluor Corporation 25. Valhi, Inc. 13. Fossil Group, Inc. Outside of Harris and Dallas County 1. Alliance Data Systems Corporation 12. RadioShack Corporation 2. American National Insurance Company 13. Rent-A-Center, Inc. 3. Benchmark Electronics, Inc. 14. Rush Enterprises, Inc. 4. Cinemark Holdings, Inc. 15. Sabre Corporation 5. CST Brands, Inc. 16. Sally Beauty Holdings, Inc. 6. D.R. Horton, Inc. 17. Tesoro Corporation 7. Denbury Resources Inc. 18. Torchmark Corporation 8. Dr Pepper Snapple Group, Inc. 19. United Services Automobile Association 9. iheartmedia, Inc. 20. Valero Energy 10. J.C. Penney Company, Inc. 21. Western Refining, Inc. 11. NuStar Energy L.P. 22. Whole Foods Market, Inc. 8

10 ORGANIZATIONS WITH THE HIGHEST PERCENTAGE OF WOMEN AND MINORITY INCLUSION IN EXECUTIVE LEADERSHIP AND BOARDS OF DIRECTORS Of the 100 Texas Fortune 1000 corporations surveyed, those organizations with the highest percentage of women and minority inclusion (Black or African American, American Indian or Alaskan Native, Asian, Pacific Islander, Hispanic or Latino, or Other) in executive leadership positions or on boards of directors, were as follows: COMPANY 1 Kimberly-Clark Corporation 2 Commercial Metals Company 3 Texas Instruments Incorporated 4 CenterPoint Energy, Inc. 5 EP Energy Corporation 5 Alliance Data Systems Corporation 7 Brinker International, Inc. 8 Tesoro Corporation 9 J.C. Penney Company, Inc. 10 United Services Automobile Association 11 Waste Management, Inc. 11 Oil States International, Inc. 11 Sally Beauty Holdings, Inc. 11 Energy Future Holdings Corp. 15 Flowserve Corporation 16 AT&T 17 Baker Hughes Incorporated 18 American Airlines Group Inc. 18 Marathon Oil Corporation 20 Cinemark Holdings, Inc. 21 Comerica Incorporated 22 Benchmark Electronics, Inc. 23 Dr Pepper Snapple Group, Inc. 24 Westlake Chemical Corporation 25 Whole Foods Market, Inc. 9

11 MINORITY AND WHITE LEADERSHIP BY POSITION Executive Leadership in Texas Fortune 1000 Corporations Figures 1 and 2 are based on the table immediately following, which shows a total of 910 executive leadership seats in Texas Fortune 1000 companies in Total Seats Percentage of Seats White Men % White Women % Minority Men % Minority Women 8 0.9% 10

12 Boards of Directors in Texas Fortune 1000 Companies In 2016, there were a total of 752 seats on the boards of directors of Texas Fortune Of these seats, white men and women dominated the statistics. Minority men and women combined totaled less than 10 percent of the seats. Total Seats Percentage of Seats White Men % White Women % Minority Men % Minority Women % 11

13 CEO Positions in Texas Fortune 1000 Companies Both white women and all minorities were overwhelmingly underrepresented at the CEO level in There were no Black, Latina, or Asian women CEOs in Texas Fortune 1000 companies. Total Seats Percentage of Seats White Men % White Women % Black or African American Men % Black or African American Women 0 0% Hispanic or Latino Men % Hispanic or Latina Women 0 0% Asian Men % Asian Women 0 0% 12

14 WOMEN IN TEXAS FORTUNE 1000 AND NATIONAL S&P 500 Women National Statistics Figure 6 offers a view of women in S&P 500 companies, courtesy of Catalyst. This information was updated in June The statistics to note for this report are women CEOs at 4.2%, Executive Level at 25.1% (29.3%, as shown in the table on the following page), and Board seats at 19.9%. Figure 6 13

15 Women Executive Leadership and Board of Director Representation in Texas Fortune 1000 Although women on boards approach the national percentages, women in executive leadership positions in the Texas Fortune 1000 are less than half of the S&P percentages. Texas Fortune S&P Exec Leadership Men 85.7% Exec Leadership Women 14.3% 29.3% Boards of Directors Men 84.0% Boards of Directors Women 16.0% 19.9% 14

16 LATINOS IN TEXAS FORTUNE 1000 AND NATIONAL S&P 500 National Latino/Hispanic Representation in the Board Room According to information obtained from the Hispanic Association on Corporate Responsibility (HACR), board representation of Latinos/Hispanics does not adequately correspond with the dramatic shift in U.S. demographics much less Texas even more dramatic Latino/Hispanic rise. According to Pew Research, Texas population of Latino/Hispanic is already at 39%, almost twice the HACR 2020 U.S. projection. Figure 9 15

17 Latino/Hispanic Representation in the Board Room at Texas Fortune 1000 A sizeable gap exists between the Latino/Hispanic population in Texas (39%) and the 2016 Latino/Hispanic boards of directors representation in the Texas Fortune 1000 (2.4%). Texas Fortune National (HACR) percentages, 2013 Latino Boards of Directors 2.4% 3.12% Minority Boards of Directors 7.3% White Boards of Directors 92.7% 16

18 HARRIS COUNTY (Houston) FORTUNE 1000 Harris County Demographics and Racial Composition of Executive Leadership and Boards of Directors Figure 11 below illustrates the racial demographics of Harris County according to the 2010 census. Figure 12 shows the Hispanic or Latino population mix versus Non-Hispanic or Latino. Figure 13 shows the racial and ethnic (there are only 2 categories of ethnicity Hispanic or non- Hispanic) boards of directors in Harris County,

19 Houston Fortune Houston Population 2010 White 93.5% 56.6% Black or African American 2.4% 18.9% American Indian or Alaskan Native 0.7% Asian 2.6% 6.2%% Pacific Islander 0.7% Other Race 14.3% Two or More Races 3.2% Ethnicity The 2010 statistics (latest officially available) show that Harris County had a Hispanic/Latino composition of 40.8%, but there is only a 1.4% representation in executive leadership or on boards in Houston Fortune Houston Population 2010 Non-Hispanic or Latino 98.6% 59.2% Hispanic or Latino Total 1.4% % 40.8% 18

20 Harris County Women in Executive Leadership and Boards of Directors The chart on the left (Figure 14) shows the 2016 gender composition of executive leadership and boards of directors of Fortune 1000 corporations located in Harris County, while the chart on the right (Figure 15) shows that in 2010 women accounted for more than 50% of the Houston population. 12.3% 87.7% Men Women 50.2% 49.8% Men Women Figure 14: Gender in Harris County Companies, 2016 Figure 15: Gender in Harris County, 2010 Houston Fortune 1000 Houston Population Men 87.7% 49.8% Women 12.3% 50.2% 19

21 DALLAS COUNTY FORTUNE 1000 Dallas County Demographics and Racial Composition of Executive Leadership and Boards of Directors Figure 16 is based upon the first table below. It shows the racial demographics of Dallas County, while Figure 17 focuses solely on the ethnic breakdown. Dallas County has a Hispanic or Latino total population (2010) of 38.2%. Figure 18 shows that the executive leadership and board representation of all minorities in 2016 is 7.7% 20

22 Dallas Fortune Dallas Population 2010 White 92.3% 53.5% Black or African American 3.1% 22.3% American Indian or Alaskan Native 0.7% Asian 1.2% 5.0% Pacific Islander 0.1% Other Race 15.5% Two or More Races 2.8% Ethnicity The table below illustrates the disparity between the Hispanic/Latino population (in 2010) and the executive leadership and board positions in Dallas Fortune Dallas Population 2010 Non-Hispanic or Latino 96.6% 61.8% Hispanic or Latino Total 3.4% 38.2% 21

23 Dallas County Women in Executive Leadership and Boards of Directors The chart on the right (Figure 20) shows the 2010 gender breakdown in Dallas County, while Figure 19 on the left shows the 2016 gender composition of executive leadership and boards of directors of Fortune 1000 corporations located in Dallas County. Dallas Fortune Dallas Population 2010 Men 81.6% 49.4% Women 18.4% 50.6% 22

24 COMPANIES WITH PUBLISHED DIVERSITY & INCLUSION STATEMENTS Texas Fortune 1000 Companies with Published D&I Statements In researching the websites of Texas Fortune 1000 corporations, only 41 had specific D&I statements (different from the standard EEOC disclosures). However, our research also indicated that there was not a major distinction in the progress of women and minorities in leadership positions and on boards between those who published and those who did not. 23

25 Minority and White Executive Leadership for Texas Fortune 1000 with Published D&I Statements Figures 22 and 23 highlight the 2016 distinction between minority men and women and white men and women in executive leadership positions in 2016, for those companies with published D&I statements. Total Seats Percentage of Seats White Men % White Women % Minority Men % Minority Women 6 1.5% 24

26 Minority and White Boards of Directors for Texas Fortune 1000 with Published D&I Statements As Figures 24 and 25 illustrate, of the 336 boards of directors positions, 71.7% were occupied by white men in 2016 for companies with published D&I statements. Combined with white women, the concentration becomes 87.8%. Total Seats Percentage of Seats White Men % White Women % Minority Men % Minority Women % 25

27 CONCLUSIONS AND POINTS FOR DISCUSSION Most companies are beginning to adopt Corporate Social Responsibility attributes into their marketing strategies. They realize that consumers and vendors place a value on innovation, fairness, and inclusiveness. Many companies are redirecting and repackaging their products and services to address ever-changing demographics. Increasing market share, broader brand appeal, brand acceptance, and brand loyalty are just some of the benefits. Having employees involved in CSR outreach initiatives helps the community and improves employee morale, aiding in both recruitment and retention. The public relations value of a good CSR strategy is obvious. Corporations that are slow to see the value of CSR programs fall behind their competitors. While large strides have been made by the more progressive organizations, our research shows that internal CSR diversity and inclusion initiatives fall woefully short when it comes to moving minorities and women into executive leadership and board of director roles. To be sure, when measured over extended periods of time, progress is obvious but, as this report shows, demographic changes are outpacing corporate leadership and governance change. With few exceptions, Texas lags behind national averages. Clearly, publishing support for diversity and inclusion programs is a positive step, but an actual increase in minority and women representation on both boards and in leadership positions needs to become a priority. Our experience shows that an increasing number of job applicants (particularly Millennials) look at the corporate governance demographics of potential employers. This report does not reflect any data on Texas Fortune 1000 supplier diversity programs. However, our observation is that most Texas Fortune 1000 corporations (and many others) are making an effort to have their suppliers diversity and inclusion goals be compatible with their own. We encourage all organizations to create and publish their supplier diversity policies and to measure and publish their suppliers results, including corporate governance statics, as well. This report is intended to encourage open, honest conversation. We decided to not publish the Texas Fortune 1000 companies who scored lowest for minority and women inclusion and executive leadership and board of director participation. If you are one of the Texas Fortune 1000 corporations not shown on page 9, we encourage you to compare your current statistics with this report and to make a commitment for improvement. If you are one of the more than 2,000,000 businesses in Texas, you now have information that will allow you to evaluate your own diversity and inclusion progress. Keep in mind that Texas is below national norms, and that the goal is not just diversity in the workforce, but rather diversity and inclusion in leadership and board roles. 26

28 REFERENCES Bénabou, R., & Tirole, J. (2010). Individual and Corporate Social Responsibility. Economica, 77(305), new series, Catalyst. (2016). Women in S&P 500 Companies. Retrieved from knowledge/women-sp-500-companies Hispanic Association on Corporate Responsibility. (2013). Disproportionate Hispanic Representation in the Corporate Boardroom [Graph]. Retrieved from Pew Research Center Hispanic Trends. Retrieved from U. S. Census Bureau. (2010). American FactFinder fact sheet: Dallas County, T.X. Retrieved June , from DPDP1/ US48113 U. S. Census Bureau. (2010). American FactFinder fact sheet: Harris County, T.X. Retrieved June , from DPDP1/ US