Based on analysis of DiversityInc Top 50 data, we find that the most successful consumer-facing companies implement the following best practices:

Homepage & Layout

• A diversity presence is on the homepage or one click away: 100 percent of DiversityInc Top 50 companies do this.
• “About the Company” section should include a link to the diversity page: 82 percent of DiversityInc Top 50 companies do this.
• A search of keywords (“diversity”, “diversity statement”, “CEO statement on diversity”) should quickly get the reader to diversity content.

• Diversity content should directly connect D&I with business results internally and externally.
• Diversity content should include the CEO’s personal diversity statement and reasons a diverse and inclusive management team and workforce is mission critical to business goals; 94 percent of DiversityInc Top 50 companies include a CEO personal quote and have a corporate-vision statement that incorporates diversity.

• Images throughout the website (not only in the diversity section) should be of individuals (preferably employees) from underrepresented groups in leadership roles and/or connecting with company brands.
• To be well esteemed, a company needs to be branded. Examples of innovations and other accomplishments derived from D&I should get the spotlight.
• People with disabilities should be able to easily navigate your site.

Among DiversityInc Top 50 companies within the consumer-products sector, Procter & Gamble and the Kellogg Company are standouts.

On Procter & Gamble’s homepage, clicking on Purpose and People takes you to a page that makes the company’s business case for D&I.

Our shared Purpose attracts and unites an extraordinary group of people, P&Gers, around the world—the most diverse workforce in P&G history. Together, we represent around 150 nationalities. Our recruiting and development philosophy to ‘build from within’ fosters a strong culture of trust and shared experiences. Our diversity, our shared culture and our unified Purpose are the defining elements that enable P&G to touch lives and improve life every day.

In P&G’s 2011/2012 Diversity & Inclusion Annual Report, Chairman and CEO Bob McDonald links P&G’s mission—“to touch and improve lives, now and for generations to come”—to innovation and diversity and inclusion. Images throughout P&G’s website connect the company and its brands to underrepresented groups.

Similarly, John Bryant, President and CEO of Kellogg, makes his company’s case in The Kellogg Diversity & Inclusion Story:

Promoting inclusion is essential to our business as well. An actively inclusive, welcoming and respectful work environment promotes employee engagement, drives innovation, improves retention and boosts productivity—all of which contribute directly to our bottom line.

From the Kellogg Company homepage, clicking Corporate Responsibility gets you to the area of the website that includes Kellogg’s D&I page. This section presents the company’s major workplace and marketplace D&I efforts, its results with diverse suppliers, and where it is in its thinking and actions around diversity and inclusion. About Kellogg Company provides images that connect the company, its brands and its people with underrepresented groups. D&I best practices are employed to improve consumer, retailer and supplier relationships, and to establish Kellogg as an employer of choice.

Both CEOs state that mission-critical work gets done with D&I throughout their organizations. Both companies’ websites exhibit thought, commitment and results.

–Denyse Leslie, Senior Vice President of Consulting, DiversityInc

The post Ask DiversityInc: Who Has the Best Website for Diversity? appeared first on DiversityInc.

Michele C. Meyer-Shipp
Michele C. Meyer-Shipp has been named vice president and chief diversity officer of Prudential Financial, succeeding Emilio Egea, who retired. In her new role, Meyer-Shipp is responsible for leading and directing all diversity-and-inclusion initiatives for the company, and for ensuring ongoing compliance with federal and state equal employment opportunity/affirmative action laws and requirements. Prudential is No. 9 in The 2012 DiversityInc Top 50 Companies for Diversity.

Meyer-Shipp joined Prudential in April 2010 as vice president and counsel in the Employment and Labor Law group. She has also been general counsel for the Waterfront Commission of New York Harbor, vice president and diversity manager in Merrill Lynch’s Global Wealth Management division, and director of the state of New Jersey’s Division of Equal Employment Opportunity and Affirmative Action. Prior to that, she was a practicing attorney.

Meyer-Shipp is an active member of the Association of Corporate Counsel, the Minority Corporate Counsel Association, Corporate Counsel Women of Color and the National Employment Law Council. She earned a bachelor’s degree at Rutgers School of Criminal Justice and her juris doctor at Seton Hall University School of Law.

R. Fenimore Fisher
R. Fenimore Fisher has been named a deputy commissioner and the chief diversity and EEO officer for the City of New York. He is responsible for the leadership of the Office of Citywide Diversity and Equal Employment Opportunity, and will design and implement strategies to position the city as a world-class leader in diversity and inclusion. Prior to his appointment, Fisher was managing partner of the R. Fenimore Fisher Group, a global D&I and alternative dispute-resolution firm. Fisher previously served as vice president of diversity initiatives and analysis for Walmart and as executive director of the Rainbow/PUSH Coalition’s Wall Street Project.

A member of the New Jersey State Bar Association, Fisher serves on the national leadership council for GLSEN (the Gay, Lesbian & Straight Education Network) as well as the corporate advisory council for the Congressional Black Caucus Foundation. Fisher holds a bachelor’s degree from Louisiana State University, a Juris Doctor from Ohio Northern University and a labor-mediation certification from Cornell University.

Jennifer “Jae” Pi’ilani Requiro
Jennifer “Jae” Pi’ilani Requiro has been named national manager of diversity and inclusion at Toyota Financial Services. Her responsibilities include diversity-and-inclusion education and executive scorecards, mentoring and Toyota Business Partnering Groups. She also develops strategies to increase market share, capture more multicultural customers and increase partnerships with diverse suppliers. Requiro has a bachelor’s degree from UCLA.

Barbara Frankel
Barbara Frankel, senior vice president and executive editor of DiversityInc, has been named to the newly established global advisory board for WEConnect International, a corporate-led nonprofit that facilitates sustainable economic growth by empowering and connecting women business owners globally. Others named to the 22-person board include Kathleen Matthews, executive vice president and chief global communications and public affairs officer, Marriott International; Julie Oyegun, chief diversity officer, the World Bank Group; and Catherine Rodgers, vice president, Global Opportunties and Business Development, IBM.

Margaret E. Burke
Margaret E. Burke has been admitted into PricewaterhouseCoopers’ partnership. In her ongoing role as U.S. Advisory human-capital leader, Burke oversees the strategic development, direction and implementation of the Advisory practice’s recruitment, development, talent management, rewards and retention programs. Burke holds a bachelor’s degree from Mount Holyoke College. PricewaterhouseCoopers is No. 1 in the DiversityInc Top 50.

Tracy Nolan and Pushpendu Pal
CVS Caremark has appointed Tracy Nolan and Pushpendu Pal to new positions, Nolan to vice president of strategic product delivery and Pal to senior vice president of the information technology division within the company’s prescription benefit management (PBM) business. Nolan, who comes to CVS from WellPoint, is responsible for operationally expanding flagship product offerings and for newly developed products and programs. Pal’s promotion is a reflection of his work in leading the division in delivering stable and robust internal-application services and deploying information technology.

Terrez Thompson
The Coca-Cola Company has promoted Terrez Thompson to vice president of global supplier diversity. She will lead and promote the company’s efforts to maximize procurement opportunities with diverse businesses as suppliers, contractors and subcontractors. Thompson has held a variety of roles in more than 25 years at The Coca-Cola Company, including controller of The Coca-Cola Trading Company. The Coca-Cola Company is No. 46 in the 2012 DiversityInc Top 50.

Kevin Jennings
The Arcus Foundation, a leading global foundation advancing pressing social-justice and conservation issues, has named Kevin Jennings as executive director. Jennings was previously CEO of Be the Change Inc., where  he was instrumental in launching the Opportunity Nation campaign to promote economic opportunity and social mobility in America. Jennings has also served as assistant deputy secretary of education under President Obama and founded the Gay, Lesbian & Straight Education Network (GLSEN). Jennings has a bachelor’s degree from Harvard College and master’s degrees from Columbia University Teacher’s College and New York University’s Stern School of Business.

Jesus Soto Jr.
Pacific Gas and Electric Company (PG&E) has appointed Jesus Soto Jr. to further solidify the leadership team charged with building the nation’s safest natural-gas delivery system. He will serve as senior vice president of gas transmission, operations, engineering and pipeline integrity. Soto is responsible for overseeing four major functions: public safety and integrity management; project engineering, design and management; gas transmission; and gas system operations.

Richelle Parham
Richelle Parham, chief marketing officer of eBay North America, has been elected to the board of directors of Scripps Networks Interactive. At eBay, Parham directs the company’s core marketing functions. She is also responsible for brand engagement, driving eBay’s seasonal marketing calendar and leading its customer-insights and marketing-analytics functions.

Richard Mark
Richard Mark has been promoted to chairman, president and CEO of Ameren Illinois. Mark’s responsibilities include the company’s natural-gas and electric delivery business, customer service, natural-gas and electric supply, community relations and government relations. Prior to joining Ameren in 2002, he spent five years as COO and six years as president and CEO at St. Mary’s Hospital in East St. Louis, Ill.

Daisy Auger-Dominguez
Daisy Auger-Dominguez joined the Disney/ABC Television Group as vice president of organization and workforce diversity. Auger-Dominguez focuses on helping the company attract, develop and retain diverse talent in support of business objectives, and is responsible for continuing to develop the company’s diversity-and-inclusion strategy, goals and plans. She previously served as a diversity executive at Time Warner and Moody’s Corporation. She has a bachelor’s degree from Bucknell University and a master’s degree from New York University.

Ramona G. Blake
Ramona G. Blake has been appointed director of diversity and inclusion at TIAA-CREF Financial Services. She is responsible for diversity-strategy design and implementation, special initiatives and training in the following areas: marketplace, supplier, workforce and workplace. Previously, Blake was manager of diversity and inclusion at PSEG. She has a bachelor’s degree from Cornell University and a Certified Diversity Professional certificate from Cornell’s ILR School.

Dermot J. O’Brien
Dermot J. O’Brien has been named chief human resources officer and corporate vice president at Automatic Data Processing. In his new role, O’Brien works with ADP’s senior leadership team to develop workforce plans and programs that align with ADP’s overall strategic objectives. His responsibilities include forecasting ADP’s global talent needs; implementing initiatives that effectively attract, develop, deploy and retain a diverse talent population; overseeing succession planning and management development; and improving ADP’s already strong levels of employee engagement. Prior to joining ADP, O’Brien was executive vice president of human resources at TIAA-CREF. A Dublin, Ireland, native, O’Brien has a bachelor’s degree from Pace University. ADP is No. 27 in the 2012 DiversityInc Top 50.

Dr. Antonio Flores
Dr. Antonio Flores, president of the Hispanic Association of Colleges & Universities (HACU), invited DiversityInc CEO Luke Visconti to become a member of the organization’s 17-member Corporate & Philanthropic Council. The council’s goal is to provide guidance and assistance to Dr. Flores and the association’s development division and public-affairs office to ensure its mission, programs and events receive support and that its strategic plans are realized. Other council members include: Raymond Arroyo, Aetna; Alma Guajardo-Crossley, General Motors; Jim Fjelstul, Sodexo; Jerry Gattegno, Deloitte; and Angel Herrera, ARAMARK.

Anthony Salcido and Mónica Gil
The Hispanic Scholarship Fund inducted six new members into its Alumni Hall of Fame on Oct. 17 in New York City. The 2012 inductees are: Dr. Yolanda García Romero, professor of history, North Lake College; Mónica Gil, senior vice president, public affairs and government relations, Nielsen Company;  José P. Chan, MIT Sloan Fellow in Innovation and Global Leadership and adjunct professor, Parsons the New School for Design; Cyrus Amado Salazar, equal opportunity manager, U.S. Air Force; and Gilbert and Jacki Cisneros, president and vice president, The Gilbert & Jacki Cisneros Foundation. Additionally, Melanie L. Healey, group president, North America of HSF partner company Procter & Gamble, accepted an honorary recognition on behalf of P&G for contributing more than $4 million to HSF since 1986.

The post Prudential’s New CDO, Plus Toyota Promotes Diversity Leader [Slideshow] appeared first on DiversityInc.

Over the last 10 years, resource groups have evolved from being social networks to goal-oriented drivers of innovative solutions. They are key business resources that can be leveraged to deliver recruitment, engagement, talent development, and marketplace solutions.

In DiversityInc’s Resource Groups diversity web seminar, DiversityInc Senior Vice President and Executive Editor Barbara Frankel discusses the best practices of these groups, including common types and membership structures, and their potential impact for organizations.

Jennifer Christie, chief diversity officer and vice president, executive recruitment, American Express (No. 14 in the 2012 DiversityInc Top 50), and Jeffery Smith, associate director, global diversity, Procter & Gamble (No. 5), both share case study insights from their organizations’ successful employee-resource group programs. American Express was DiversityInc’s 2011 Top Company for Resource Groups.

Takeaways from this web seminar include:

• How to increase membership throughout the workforce
• How American Express used its Latino group to increase pre-paid card sales
• How Procter & Gamble’s resource groups —such as its LGBT group and its group for people with disabilities—were able to enhance market relations

Watch Diversity Web Seminar on Resource Groups: Connect With Customers for Top Sales Results.

The post Diversity Web Seminar on Resource Groups: Connect With Customers for Top Sales Results appeared first on DiversityInc.

Synopsis:

At our spring event, DiversityInc convened a panel of executives from global companies who grapple with these issues and have devised successful business solutions for global talent development.

Participants:

Nancy Calderon, Americas Region Chief Administrative Officer and U.S. National Partner in Charge of Operations, KPMG, No. 22 in The 2012 DiversityInc Top 50 Companies for Diversity

Linda Clement-Holmes, Chief Diversity Officer and Senior Vice President of Global Business Services, Procter & Gamble, No. 5 in the DiversityInc Top 50

Pat Rossman, Chief Diversity Officer, BASF, one of DiversityInc’s 25 Noteworthy Companies

Sarah King, Executive Vice President of Human Resources, Wyndham Vacation Ownership (Wyndham Worldwide is one of DiversityInc’s 25 Noteworthy Companies)

Here are their best practices for global talent development:

1. Align global talent development with corporate business goals: Senior management should regularly review top talent globally as well as the diversity of slates for openings.
2. Stay true to global values, especially on human rights, while respecting local cultures: Offering a wide range of diversity-training programs that address global cultural competence at a local level is important, especially regarding LGBT and women’s issues.
3. Convince talented managers about the benefits of global assignments: Companies need to identify employees during the “sweet spot” of their career: early enough that life circumstances (i.e., family, homeownership, etc.) more easily allow for travel, yet late enough that the role is meaningful. 

Other best practices revealed in this article include providing global cultural-competence training and education for employees and their families before doling out assignments; helping ex-pats re-adjust at home; and leveraging multicultural and multinational resource groups. 

Click here to read this 1,396-word report, featuring case-study examples from these four global companies and additional video clips.

The full article is available to DiversityIncBestPractices.com subscribers. Not a subscriber? Click here to request subscriber information and pricing.

For more on global diversity, read Ask DiversityInc: Who Has Global LGBT Groups?

The post 6 Best Practices on Global Talent Development appeared first on DiversityInc.

In this “Corporate Political Spending: Why Shareholders Must Weigh In” white paper, NorthStar Asset Management’s Julie Goodridge and Christine Jantz reveal the complex history behind shareholder activism, the controversy and repercussions of several headline-making company gaffes and the steps that leaders need to take to ensure their company contributions don’t create a values conflict with diversity and inclusion.

Download the “Corporate Political Spending: Why Shareholders Must Weigh In” PDF to view footnotes and sources.

INTRODUCTION

Beginning with the divestment campaigns of the 1970s, shareholder pressure on companies to disclose their impact on global communities has been broadening and increasing.  Shareholder resolutions addressing toxic waste, executive compensation, the inclusion of gender identity in Equal Employment Opportunity (EEO) policies, and most recently corporate political contributions, have created consumer, stakeholder and employee awareness of the impact of corporate behavior on public perception and company value.  In response to this type of stakeholder engagement, as well as media coverage of corporate impact on communities, many public companies have chosen to preempt concerns about their environment, sustainability and corporate governance (ESG) records.  Rather than simply adhering to local or federal laws as standards for good behavior, these companies have hired teams of employees to develop, identify, and broadcast corporate values and “good works” to investors and consumers alike.

However, do stated company values truly act as the moral compass for company behavior?  Or does marketing hype create a screen for companies to appear as good citizens, while relying on government regulation as the minimum guideline for appropriate behavior?  We believe that a company takes the high road when their values are clearly defined, and their activities in the global community reflect adherence to their self-defined values.  As shareholders, we invest in companies because we make a choice, based on available data, to participate in the profit from the company’s sales of goods and services.  When the data we examine is misrepresented, shareholder value is put at risk.  As socially responsible investors, we do not limit our scope of concern to corporate accounting scandals.  We examine stated company values and the degree to which those values are reflected in company behavior. When we identify discrepancies, we seek stakeholder engagement as a remedy.  Most recently, we have focused on the nexus of company values and their political contributions.

Given the huge public policy outcry related to the Supreme Court decision in the 2010 Citizens United v. Federal Election Commission case, our firm, NorthStar Asset Management, Inc., examined the treasury and Political Action Committee (PAC) contributions of the companies on our firm’s “buy list,” as compared to the voting records of politicians who received their contributions. At each company, we examined the EEO policies related to protections in the area of sexual orientation, as well as the company’s stance on environmental concerns.  We found that stated company values were not reflected in the voting records of the companies’ supported politicians, and in many cases the stated views of the supported politicians were in direct opposition to company values.

We believe that if corporate political contributions violate  company values, then corporations are risking the good name of the company and, consequently, shareholder value.  Corporate contributions that contradict company values pose a direct and immediate risk to shareholder value.  Our perspective is that in order to minimize risk to shareholder value, corporate standards for political giving must include a congruency analysis between anticipated political spending and the company’s values.  And further, that because it is shareholders who are placed at risk through poor management decisions on political spending, the onus is on shareholders to pre-approve political spending decisions.

Download the “Corporate Political Spending: Why Shareholders Must Weigh In” PDF to view footnotes and sources.

HISTORY

For several years, shareholder activists have engaged companies regarding their corporate political spending. Since the Citizens United v. Federal Election Commission ruling in 2010, corporate exposure surrounding political giving has been reported on widely and in some cases has led to public scrutiny, criticism and diminished shareholder value. Historically, shareholder resolutions have asked exclusively for disclosure of political spending. These resolutions are essential, but just as shareholder rights around issues of corporate executive compensation progressed from seeking simply disclosure to insisting upon shareholder advisory votes, which increased “accountability, transparency, and performance linkage of executive pay,” shareholder input regarding political contributions can provide checks and balances.

Unfortunately, it appears that the singular focus of past shareholder resolutions on disclosure has led to a phenomenon in which companies believe that disclosure is the most stringent requirement by which they must abide.  Corporations seem to believe that if management or company political action committees (PACs) simply disclose in arrears the extent of their political giving, then this is sufficient for shareholder and consumer satisfaction.  Our firm’s engagement with corporations and correspondence with the Securities and Exchange Commission indicates that the misconception that we are simply requesting disclosure prevails.

Currently, there is no process to hold management accountable for actual disclosed contributions to candidates working against company values. Shareholder reaction or public outcry against particularly egregious violations is happenstance. The focus of shareholder resolutions solely on disclosure has failed because it does not provide shareholders a way to voice an opinion on political contributions – hence the company (management and the board) not only assumes it can spend company resources promoting its views of what constitutes corporate “interests,” but in our experience the company may not know that these candidates uphold political policies divergent from company values. Given our concerns and fiduciary duty to protect our clients’ assets, and because of the close relationship between the company value and company values, we feel shareholders must weigh in on all corporate political activity in advance of the actual contribution.

Download the “Corporate Political Spending: Why Shareholders Must Weigh In” PDF to view footnotes and sources. 

WHO DECIDES WHERE THE MONEY GOES?

The burden of making appropriate political contribution decisions from both the general company treasury (state, local and private political committee giving) and the company PAC (state, local, federal and PAC) are at the discretion of management despite the fact that poorly used funds ultimately impact shareholder value. Corporations are permitted to contribute to federal elections only via PAC contributions.  Only eighty-eight companies in the Fortune 500 disclose their company treasury electioneering contributions, and all Fortune 500 companies disclose their PAC contributions as required by law.

Unfortunately, after our examination of underlying values as self-described by corporations in their publically available media as well as employee policies, with their political contributions through both treasury (where available) and PAC funds, we found glaring inconsistencies in corporate values and the values inherently expressed by support of various candidates for political office.  This was true not only in corporations who disclose their treasury contributions, but even in those companies who denounce treasury contributions in favor of PAC contributions. In each case, while well-meaning management teams supported candidates who were deemed to be working in the best interest of the company, corporate values relating to employment non-discrimination policies, environmental standards, and immigrant rights were consistently violated when contributions were made. Management apparently lacked the skills and knowledge to evaluate candidates based on support or opposition of the comprehensive goals and values of their own contributing business. 

Despite the fact that the corporate standard advocated by The Conference Board (TCB) in their recently published “Handbook on Corporate Political Activity” recommends corporations review their political expenditures to “examine the proposed expenditures to ensure that they are in line with the company’s values and publicly stated policies, positions, and business strategies and that they do not pose reputational, legal, or other risks to the company,” our firm has yet to find one corporation that regularly compares its values to an analysis of the politicians and political groups it supports.

We again consider the fact that perhaps the solitary focus of disclosure in past shareholder engagement with corporations is partially at fault as it has failed to encourage corporations to do anything more than consider disclosing these contributions. In our engagement efforts, it has been clear that the novel idea of congruency with self-defined corporate values had never been considered previously, despite volatile public issues such as the 2010 clash between Target Corporation’s political contribution and the backlash suffered due to that donation’s clearly values-incongruent nature (further described below). Because the board of directors and other upper management officials make all decisions regarding the destinations of company treasury and company PAC contributions, management must take into account potential discrepancies between company values and supported politicians, as well as the fact that sets of contributions risk company brand name, reputation, and shareholder value. While these officials seem to be slowly coming around to the idea of disclosing these contributions, they are failing to understand that political contributions must reflect company values.

Download the “Corporate Political Spending: Why Shareholders Must Weigh In” PDF to view footnotes and sources.

SPECIFIC VIOLATIONS OF COMPANY VALUES 

Target Corp.: In July 2010, Target Corporation donated $150,000 to the political group Minnesota Forward, which ignited a major national controversy with demonstrations, petitions, threatened boycotts, and substantial negative publicity. [For DiversityInc’s coverage of this issue, which involved donations to a gubernatorial candidate who did not support gay rights, visit www.DiversityInc.com/targetpac.]

This controversy, combined with the huge public policy outcry related to the Supreme Court decision in the Citizens United case, caused us to carefully examine the treasury and Political Action Committee (PAC) contributions of the companies on our firm’s “buy list” (those corporations with stated company values) as compared to the voting records of politicians who received their contributions. We uncovered patterns of political activity that were inconsistent with companies’ policies of non-discrimination based on sexual orientation, gender identity or expression:

Home Depot’s Corporate Political Contributions: One particularly unfortunate donation was in support of Governor Bob McDonnell, whose objective was to eliminate non-discrimination protections for LGBT state workers in Virginia.  McDonnell was successful in this regard. We also identified a number of other particularly egregious donations that are detailed in NorthStar’s no-action letter response published on the Security and Exchange Commission’s (SEC) website.

FedEx PAC:  David Vitter for U.S. Senate received $6,500 in 2009/2010from FedEx. As a sitting US Senator, David Vitter was an original co-author of and voted for the Federal Marriage Amendment that would have effectively eliminated same-sex marriage in all states where it is currently legal and have prevented any states from adopting same-sex marriage legislation in the future.  This position against same-sex marriage stands in direct violation of the FedEx commitment to provide same-sex domestic partner benefits and same-sex marriage benefits (in states where it is legal) to all U.S.-based employees by January 1, 2012.

Eight additional co-sponsors of the anti-LGBT “Marriage Protection Amendment” in the U.S. Senate also received contributions from the FedEx PAC including Senators Brownback, Chambliss, Crapo, DeMint, Enzi, Isakson, Roberts, and Thune. Furthermore, candidates receiving FedExPAC contributions voted against hate crimes bills and against the repeal of the “Don’t Ask, Don’t Tell” policy that prohibits LGBT service members from serving openly.

Procter & Gamble PAC:  David Vitter received $2,000 in 2009 and another $3,000 in 2010. He not only co-authored the Federal Marriage Amendment, but in July 2007, Vitter was “identified as a client of a prostitution service” and continues to serve in the Senate. Chuck Grassley has been written about as having ties, as far back the 1980s, to the “C Street” radical right anti-gay group pushing the “Kill the Gays Bill” in Uganda. And another five senators receiving PAC money signed onto the Federal Marriage Amendment as co-sponsors including Senators Burr, Crapo, DeMint, Isakson, and Kyl. Many of the officials supported by P&G PAC contributions also voted for the Federal Marriage Amendment and voted against hate crimes bills and the repeal of the “Don’t Ask Don’t Tell” policy. [For Procter & Gamble’s response, visit www.DiversityInc.com/goodridge.]

A company’s EEO policy, non-discrimination policy, and values statements comprise the company’s set of public values, and hence, to abide by the “Handbook on Corporate Political Activity,” all corporate political activity and contributions should reflect these values whether contributions are made to political organizations or directly to political candidates. Yet even the above examples, focusing only on EEO values, indicate that management has acted in violation of stated company values.  We believe that because management and/or the company board of directors is responsible for determining the recipients of company PAC giving as well as corporate treasury political spending decisions, and yet the above types of incongruent decisions are commonplace, stakeholders must ensure that management does not blindly approve political contributions that contradict company values.  Disclosure of political contributions after the fact does not repair harm created by inconsistent actions. We believe that a company’s political activities become our concern when:

1. Company resources of any kind are used to make or direct political contributions for any reason.
2. A contribution to a candidate actively works against the values of the company or creates potential damage to the company and its employees, customers, or shareholder value.
3. We bring concerns about risks created by political giving to management’s attention and management fails to address (or in the case of Home Depot, even notice) the brand, reputational, or legal risks to the company.
4. Investment managers with a fiduciary responsibility to address significant risks to shareholder value with management, the board of directors, and the owners rubberstamp approval on incongruent corporate expression of values.
5. Supreme Court opinions like those expressed by Justice Kennedy in Citizens United insist that we, as shareholders, correct misdoings by management, through the “procedures of corporate democracy.”

Inconsistencies shown between corporations’ publically stated values (environmental policies, health care policies, compensation, pension, and employee benefit issues) through support of specific candidates whose public policy and government regulation is in violation of company values can directly harm shareholder value.  

Download the “Corporate Political Spending: Why Shareholders Must Weigh In” PDF to view footnotes and sources.

A VOTE ON CORPORATE POLITICAL SPENDING

When NorthStar began to take a harder look at the political activities of companies in our portfolio, we took into consideration approaches pursued by the Center for Political Accountability (CPA) and other social investors, notably Walden Asset Management and Trillium Asset Management. We concluded, as mentioned above, that disclosure of political spending alone does not sufficiently address discrepancies between corporate values and the values of endorsed candidates or political entities.

As fiduciaries, we are concerned that political spending decisions by management, which are intended as beneficial to company value, may work at cross purposes.  In addition, Justice Kennedy’s majority opinion for the court in the Citizens United decision placed the onus on shareholders in a corporate democracy to keep management’s political activities in check, such that we, as representatives of shareholders in the proxy process, must use our votes to uphold or dissuade management from potential conflicts.  As a result of that investigation, NorthStar crafted and filed its first round of shareholder proposals at Home Depot, FedEx, and Procter & Gamble (P&G), for the 2011 shareholder meetings,  decrying corporate political activity incongruent with publically stated values and seeking a shareholder vote on corporate political activity.  We have similarly pursued eight companies on the same issue for the 2012 shareholder meetings (Chubb, Intel, Google, Home Depot, Praxair, Ecolab, Johnson and Johnson, and Western Union).

Our perspective is that corporate standards for political giving must include an analysis of anticipated political spending for congruency with the company’s values to minimize risk to shareholder value.

Support for this approach is evidenced by:

• When the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission interpreted the First Amendment right of freedom of speech to include certain corporate political expenditures involving “electioneering communications,” striking down elements of the previously well-established McCain-Feingold law, the decision itself required the remedy of “potential abuses” through “procedures of corporate democracy.”
• NorthStar’s decision to seek a shareholder vote on political contributions was lauded by John C. Bogle, founder of the Vanguard Group, in making the case for a shareholder vote on political contributions in a New York Times Op-Ed: “In the Home Depot case, which was brought by NorthStar Asset Management, a Boston money manager, a vigilant S.E.C. [Securities and Exchange Commission] has allowed our shareholders to take that first step toward [corporate] democracy.” Bogle argues that self-interested managers “exploit provisions in the law…to make lavish political contributions without disclosure… and subvert our political system,” which can only be corrected by imposing a requirement for a binding “supermajority” (75%) shareholder vote on political contributions. Bogle also addresses the concern that “our nation’s money managers now hold[ing] 70 percent of all shares of American corporations…have not always honored [the] responsibility to vote,” pointing out that “mutual funds, our largest holders of stocks, are now required to publicly report how they voted during the year,” finally giving shareholders the means to hold financial institutions accountable as well.
• “The standard (under Delaware corporate law) requires a unanimous shareholder vote to ratify a gift of corporate assets other than for charitable purposes.”
• In allowing NorthStar’s resolution, the SEC agreed with NorthStar’s view that seeking an advisory vote on electioneering contributions is a shareholder right.  Importantly, the SEC’s decision to allow the Home Depot resolution also established that NorthStar’s proposal was a significant social policy issue of concern to shareholders, addressed issues outside the ordinary business of the firm, was clearly defined, and that giving shareholders a vote goes beyond disclosure.
• On July 13, 2011, congressional leaders Rep. Michael Capuano, Sen. Robert Menendez and Sen. Richard Blumenthal re-introduced the Shareholder Protection Act; a bill that would allow shareholders of public companies to vote annually on political spending. NorthStar signed a coalition letter to Congress supporting the Shareholder Protection Act. The coalition letter stated: “Responsible corporate governance requires the involvement of informed shareholders and is not a partisan issue. We believe that holding management accountable and ensuring that political spending decisions are made transparently and in pursuit of sound business is important for both the market and for democracy.”

Increasingly, shareholders are asking for more accountability and even evidence of value received for corporate political expenditures. When contributions are made to candidates via corporate treasury funds or through PAC funds that violate the same corporation’s policies and values, shareholder value is put at risk. Greater oversight requires that shareholders and their fiduciaries be allowed an opportunity to weigh in on all of the company’s political contributions before incongruent contributions occur.

In our experiences, company management states that compliance with election laws is the standard for directing contributions to political candidates–even when candidates’ political positions violate the company’s policies and publically stated values. However, guidance provided by the CFA Institute’s Code of Ethics and Standards of Professional Conduct states “in the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation.” We believe this must include the company’s own internal governing policies so as to avoid bias that reflects personal views and interests rather than those of the company as stated in company policies. As owners, we believe that the criteria for the company’s political activities should be the higher of company standards or legal requirements, rather than the minimum (legal) standard referenced by management.

Furthermore, some of our colleagues have asserted that corporate PAC contributions should not be subjected to shareholder scrutiny through an advisory vote.NorthStar maintains that PACs carry the same brand and reputational risks to shareholder value as any other corporate political activity. PACs are formed by the company, expenses are paid by the company, the name or brand of the company is used in association with the PAC, the PAC solicits both shareholders and salaried employees for contributions to the PAC, and senior management exercises discretion over the money. Therefore, we maintain, shareholder scrutiny and input in advance of these PAC contributions is necessary to mitigate risk and safeguard shareholder value. 

Download the “Corporate Political Spending: Why Shareholders Must Weigh In” PDF to view footnotes and sources.

SUMMARY

We believe that there is a need to hold companies accountable for all aspects of their public actions. Incongruities in their public actions–whether or not we have had successful prior shareholder engagements; whether the source of the contribution is from a Political Action Committee (PAC) or by the company–are inherently problematic.

Shareholder value can be diminished by negative publicity associated with political giving that is incongruent with company values. Political spending decisions that are wholly dependent on the will and vision of a management without oversight to ensure that these decisions are in line with company values exposes the company to unnecessary risk.  Governing policies that allow management to exercise personal views and interests rather than reflect corporate values potentially serve to harm company image and increase shareowner risk. As shareholders and fiduciaries, we believe that the criteria for the company’s political activities should be based upon not solely legal requirements, but also on considerations of the company internal values as a higher standard. At this time of heightened public scrutiny of corporate political involvement, all shareholders need to the opportunity to evaluate management’s decisions and vote on political spending to avert potential loss of shareholder value.

The Target Corporation debacle of the summer of 2010 resoundingly demonstrated that shareholder value is at risk when contributions are made in violation of company values.  As investment advisers, financial professionals, and shareholders, we must exercise our fiduciary responsibility and weigh in to provide checks and balances on corporate political activities.

Download the “Corporate Political Spending: Why Shareholders Must Weigh In” PDF to view footnotes and sources.

Company Comments

DiversityInc contacted the companies cited in the whitepaper. Comments from Procter & Gamble, No. 5 in the DiversityInc Top 50, and Target, No. 30, were given earlier this year in response to a Q&A with Goodridge in DiversityInc’s 2012 Talent Development & Mentoring issue. The Home Depot did not respond. FedEx declined to comment.

Procter & Gamble: P&G’s commitment to diversity and inclusion is unwavering. Our aim is to provide a work environment, which fosters a culture of inclusion for all, so that everyone is valued and included. Our Company Purpose is to touch and improve lives, beginning with our employees. Without exception, we value all of our employees and respect their right to be who they need to be.

Target: Following the 2010 election, Target conducted a thorough evaluation of our processes and established a Policy Committee to review and provide greater oversight to future corporate political giving. Moving forward, we will evaluate our giving based on business, team member and stakeholder objectives. Target believes that engaging in civic activities is an important part of operating a national retail business and believes we operate best when working with policy makers on both sides of the aisle.

NorthStar Asset Management, Inc. is a socially responsible investment firm based in Boston, Massachusetts.  

Julie N.W. Goodridge is the President, CEO, and founder of NorthStar Asset Management, Inc. She holds a B.A. from Boston University and an Ed.M. from Harvard University.

Christine Jantz, CFA is the Investment Analyst at NorthStar Asset Management. Her education includes an MBA in Financial Management from the MIT Sloan School of Management, and she also holds an MS in Statistics from the University of Iowa and a BA in Mathematical Sciences from Bethel College.

REFERENCES

Bogle, John C. “The Supreme Court Had Its Say. Now Let Shareholders Decide.” New York Times, 15 May 2011. Web.

“Capitol Hill ‘C Street house’ connected to ‘kill the gays’ Evangelicals in Uganda [video].” Metro Weekly, September 23, 2010. Web.

Center for Constitutional Rights. Uganda’s ‘Kill the Gays’ Bill Back in Play and Could Be Law By End of Week. New York: CCR, May 11, 2011. Web.

Center for Political Accountability. Center for Political Accountability, n.d. Web.

“CFA Institute Code of Ethics and Standards of Professional Conduct.” CFA Institute, 2010.

Citizens United v. Federal Election Commission. Supreme Court of the United States, n.d. Web.

Coates, John. “What Effect Will Citizens United Have on Shareholder Wealth?” Harvard Law and Economics Discussion Paper No. 684, 21 September 2011. Web.

Corporate Political Contributions. The Home Depot, 2010. Web.

DeNicola, Paul, Bruce F. Freed, Stefan C. Passantino, and Karl J. Sandstrom. “Handbook on Corporate Political Activity.” The Conference Board, November 2010.

Edgar System. Securities and Exchange Commission, n.d. Web.

Federal Election Commission. United States Government, n.d. Web.

Ferri, Fabrizio and Maber, David A., “Say on Pay Votes and CEO Compensation: Evidence from the UK” (November 24, 2011). Review of Finance, Forthcoming. Web.

Hyatt, James. “Shareholders Press for Political Spending Disclosure” Business-Ethics.com, 29 June 2010. Web.

Keilar, Brianna, Sean Callebs, Steve Brusk and Ninette Sosa. “Hustler says it revealed senator’s link to escort service.” CNN Politics, July 11, 2007. Web.

Martiga Lohn. “Target CEO defends Minn. GOP contributions.” MSNBC, 27 July 2010. Web.

Sharlet, Jeff. The Family: The Secret Fundamentalism at the Heart of American Power. New York: Harper Collins Publishing, 2008. Print.

Trillium Asset Management. Target & Best Buy Announce New Policies on Political Spending Following Controversy about Minnesota Forward Contributions. Boston: Trillium Asset Management, Feb 2011. Web.

Tracking the United States Congress. Civic Impulse, LLC, n.d. Web.

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Success, according to McDonald, is dependent on being a proactive catalyst of positive change. For him, that includes running a profitable global business that improves people’s lives. In this exclusive interview, he reveals how a firm commitment to empathy and foundational values helps the company bridge cultural gaps, promote corporate diversity and innovate products that directly satisfy customer needs.

LUKE VISCONTI: Tell me about Procter & Gamble’s emphasis on values, what they mean to the organization and how you conduct business globally.

BOB MCDONALD: Procter & Gamble was founded with a purpose: improving people’s lives. During the Civil War, people shipped short-weighted products or clothing that didn’t last very long. This company said, “We’re not going to do that. We’re going to be known as the company that prides in high-quality products.”

It wasn’t until the mid-1980s when John Smale, our CEO, asked John Pepper, our president at that time, to lead a group of leaders to write down the values that we were trying to lead. It was serendipitous and necessary—at that time we were globalizing very quickly. As you move in to another culture, the difficulty is bringing your values with you.

We ascribe to keep the purpose and the values of the company consistent globally, but you have to be willing to change to stay relevant to your consumer and grow. We formulated the purpose about touching and improving lives and giving back to the communities in which we live and work.

Five values—leadership, integrity, ownership, passion for winning and trust—are critical to the success of the company. Leaders can personalize those values by bringing the experiences they had in life that cause them to form different beliefs. We teach people how to do that so that they can share that with their organizations and be introspective as leaders.

Creating Experience & Empathy Through Corporate Diversity

We’ve discovered that people join this company because their personal purpose is about improving lives. It gives them a way to execute that purpose on a bigger stage with more resources. This purpose is what provides meaning to their lives. That means if I as a leader can tie every behavior the person has back to that purpose, their life would be fulfilled.

You don’t compartmentalize that. The more pervasive we make our purpose of improving lives, the more fulfilled the people are and the better the business results. What we’re really trying to show is the virtuous cycle, where companies do well financially and do good at the same time.

What you should do as a company is provide opportunities for employees to do community service—through that, they become more fulfilled. They improve lives but they also have an experience.

We sent a team of people to Mexico to build homes for Habitat for Humanity. We sponsored the trip. People came back totally fulfilled—a life-changing experience. They learned about low-income consumers in Mexico. When we go to hire people around the world, we need to give them opportunities to learn how the majority of the world lives.

LUKE VISCONTI: You’re leading the diversity council personally. Why is this important to you and your corporate-diversity goals?

BOB MCDONALD: It’s so fundamental with everything that we do. If your purpose is to improve lives, you’ve got to have the leadership, the strategies, the system and the cultures to do that. You can’t ignore diversity.

Diversity for us is a strategy. If I’m trying to improve someone’s life, wouldn’t I be better off having somebody in the organization who is of that representation so they can help the company be empathetic to the consumer? Consumers can never tell us exactly what they need. We’re trying to find the unarticulated need. That’s where we develop our best products.

We believe that we have five strengths: consumer knowledge, innovation, branding, go-to-market and global scale. That innovation strength is the primary way we improve lives. The more diverse your organization, the better your innovation. We try to be very deliberate about setting up diverse teams of people in order to accelerate the innovation that comes from them.

I’m a big believer in the work of a fellow named James Burke, who wrote a book called “American Connections” and a TV show called “Connections.” He says the greatest innovations in the history of the world have never happened in a linear way. Alexander Graham Bell invented the telephone to help hearing-impaired people; [Guglielmo] Marconi invented the radio for two ships to communicate at sea; Tom Watson said someday the United States might only need two or three computers.

How do we create conditions that allow people to bring their diversity to work and have their diversity become the modes that provide the potential for these innovative connections? That’s what we’re really trying to do.

Trust: A Synergistic Effect

LUKE VISCONTI: What do you expect out of your diversity council? 

BOB MCDONALD: A much more deliberate goal, objectives, strategies. We’ve done that. We’ve put together a scorecard. The other thing that comes out is insights.

Procter & Gamble always cared about diversity. But why haven’t we achieved the results? We did a deep dive on the advancement of women as an example. Everybody was well intended but we weren’t happy with the results.

We promote from within, and in any company, leaders tend to attract individuals that they know to work for them. We’d always insist that you get a diversity candidate. Unsurprisingly, the diversity candidate wasn’t selected enough because people didn’t know the candidate. We had to put in place a much more deliberate system of making sure the diversity candidates get exposure.

Secondly, we had to join hands as a leadership team, saying, “I trust you. I’m going to take a risk on this person because you know them and I don’t.” The way to do that is to bring people together and create that trust.

LUKE VISCONTI: A synergistic effect by having everybody in the room? Do you think that it adds to not only awareness but accountability for corporate diversity?

BOB MCDONALD: There’s nothing stronger than accountability. In a combat situation, people perform heroically; they don’t think they’re heroes. They say, “I did this because I didn’t want to let my buddies down.” The same thing happens in a corporation.

I’ve seen attitudes totally shift. I’ve seen individuals who were skeptical of diversity become the biggest advocates. I don’t think it’s simply because of a feeling of hierarchy and me being in the room. I do think it’s the group dynamic. Everybody has good intentions, but it takes more than that.

Connecting With Consumers

LUKE VISCONTI: How have you seen this connection manifest between this diversity council, more disciplined corporate-diversity efforts and your successes around the world?

BOB MCDONALD: We are in the fast-moving consumer goods of business. We have no alternative but being empathetic to consumers; no alternative but to have a diverse workforce that represents those consumers.

We talk a lot about the importance of knowing the culture, knowing the language. In my own experience, it gives you an empathy that you couldn’t otherwise get.

LUKE VISCONTI: How are you leveraging this empathy? What are you structurally doing to make sure that you’re not making mistakes when you go into a place?

BOB MCDONALD: The challenge for us is we have to innovate for everybody on the economic pyramid. We don’t just innovate for the people on the top and dilute that product for the people on the bottom.

For example, in the Philippines, people really want clean clothes. They wash by hand and use soap suds as a surrogate for cleanliness. It takes the average Filipino five buckets of water to rinse their clothes.

Water in the Philippines is very expensive. Water runs by your house generally 30 minutes a day. You have a high horse-powered pump on the street; you pump the water into your water tank. If you miss that 30 minutes, you don’t have water.

We developed a product called Downy Single Rinse. It sequesters the suds and allows you to rinse with one bucket of water, an innovation particularly designed for people at the bottom of the economic pyramid.

Finding Purpose, Improving Lives

LUKE VISCONTI: What do you expect to flow through at the end of the day—the tangibles to the bottom line of the business?

BOB MCDONALD: It’s developing and delivering sustainable, outstanding business results, being in the top third of our peer group and total shareholder return sustainability, and doing that through a workforce that represents the consumers we’re trying to serve, the lives we’re trying to improve. Importantly, people are performing at their peak.

For people to perform at their peak, we’ve got to be empathetic to their needs and improving employees’ lives while we’re working to improve the lives of the world’s people.

If you ask me what success is, every person in the world uses a Procter & Gamble product. It’s every employee reporting to us, that they’re working at their full potential and that we’re helping provide meaning in their lives.

I love Viktor Frankl’s “Man’s Search for Meaning.” He wrote the book right after World War II. He was in the Auschwitz concentration camp and what he discovered was a new school of psychology.

Freud was all about looking in the past and basing your future behavior on what happened in the past. Frankl was about developing a vision of the future, recognizing the control you have over that vision. He would convince people in Auschwitz that how they reacted to those guards was in their control, that they could have a positive vision of the future that would determine the positive nature of their future.

I believe what we do in this company in improving lives is giving people meaning in their lives. I went to West Point because I wanted to free the people who were living in un-free societies. I joined P&G because I wanted to make a difference in the world.

When I go to college campuses today, the students tell us they want to work for a company where they can have meaning, where they can make a difference. I think that’s the opportunity we provide.

LUKE VISCONTI: In your bio, there’s a long list of organizations that you serve. Can you talk about how important that is to you?

BOB MCDONALD: I’m trying to help people understand what their individual purpose is in life. I have a set of 10 leadership beliefs: No. 1 is living a life driven by a purpose, compared with simply meandering through life without direction. With technology the way it is today, everyone is time starved. It’s possible to go through life reacting to external forces.

I’ve given this speech maybe 300 different times, maybe every college campus almost in the world. For me, it’s a calling. If I can help students understand how to make a difference in the lives of others and if that is a higher purpose, then they should set that purpose now rather than simply reacting to what affects them.

The point is people like to do what they’re good at, and they’re good at what they like to do. We naturally gravitate to certain things, and that may lift the veil a bit on what your purpose is.

It’s the No. 1 thing, in my opinion, that differentiates those who succeed at Procter & Gamble versus those who don’t, or those who succeed in life versus those who don’t. It’s maintaining the ability to learn.

I often tell people, “When you graduate, you’re not done learning. That’s the beginning of the learning journey.” No one can predict the future with certainty, particularly in today’s world which we at P&G call a VUCA world (volatile, uncertain, complex and ambiguous). How do we prepare ourselves for that future to make the right decisions in real time? The way to do that is to continue the ability to learn.

The leadership challenge today is so different with so many generations that are so diverse. The people complain about not text messaging and other things like that, which is all true.

What is going to be the analogy for the young person today? Twenty or 30 years from now, they’re going to face the same challenge. The older you get, the harder it is to learn new things. Reverse mentoring becomes a very powerful concept: forcing yourself to learn things that are new or very difficult is a powerful concept. If we don’t do that, we won’t get the most out of life.

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Combining an active career in revenue-generating positions and managing a family can be a challenge for women employees. An employer that enables them to achieve work and home success will garner loyalty and increased performance in return. 

In this 1,353-word article, Successful Career Paths for Women in Corporate Sales, seven companies from The DiversityInc Top 50 Companies for Diversity provide insight into their key best practices to attract and retain women in corporate sales, as well as their significant results. 

These companies—PricewaterhouseCoopers, No. 3; AT&T, No. 4; Ernst & Young, No. 5; Kraft Foods, No. 9; Colgate-Palmolive, No. 10; American Express, No. 13; and Procter & Gamble, No. 25—understand that these positions are usually the way into the top level (CEO and direct reports) and want to make sure women are not excluded. 

Readers will take away: 

• The types of flexible work options women employees want and need
• Why a majority of these companies offer relocation and spousal support
• What research shows about the benefits of cross-cultural mentoring
• How to use employee-resource groups creatively to increase promotions of women
• Why a focus on training and education benefits all employees 

As Kraft Foods’ Valerie Oswalt, customer vice president of business development for Sales & Customer Logistics and the mother of two children, says: “A lot of women feel they can’t have everything—certainly not at the same time. Women don’t have to give up on their dreams. They may not get there as fast, but they will deliver the results.”

 Read Successful Career Paths for Women in Corporate Sales at DiversityIncBestPractices.com.

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