We have historic numbers of women and underrepresented minorities in the C-suite and on corporate boards – yet the numbers are still shockingly low. It’s time to accelerate that progress.
It’s hard to imagine that we in Corporate America have done everything we can when only 41 CEOs in the Fortune 500 are women. And among those women, only two of us are Black. This spring, S&P 500 companies tripled the share of new directors who are Black and more than doubled the percentage who are Latino, according to a new study by Spencer Stuart, an executive recruiting firm. Yet nearly 80% of all S&P 500 directors are still white, and about 70% are men.
The same inequities persist in the overall labor force. Black employees earn about 80% of the compensation of whites with the same levels of education, according to an analysis by the Economic Policy Institute. Meanwhile, 1.8 million women left the workforce during the pandemic. They have lost their professional identity, they’re struggling to pay bills and find childcare, and all of this will likely affect their retirement savings down the line.
These numbers underscore what we know from experience. So we must continue to press forward to increase inclusion, diversity and equity by committing to these four steps:
It starts with our mindset.
The senior leaders who sponsor ambitious management trainees and set the agenda for hiring decisions have to believe that talent is created equal and opportunity is not. If you don’t start with that mindset, you’ll be able to excuse your way out of not having more underrepresented minorities in your pipeline.
When we have that belief deeply ingrained in our culture and in our values, we’re compelled to identify and remove any obstacles that could be blocking the way. I call this “elevating with intention.”
We have to collect and analyze the data.
Numbers don’t lie. It’s important to aggregate the data to better understand where you don’t have a fully representative population. That includes taking a close look at the number of female and underrepresented minority candidates in the running for positions, because we know that the two-in-the-pool effect is real. If there are at least two female candidates in the final candidate pool, for example, the odds of hiring a female candidate are 79 times greater.
We also know that the “broken rung” is still a barrier for women: For every 100 men promoted to manager, only 85 women were promoted as of 2019, with underrepresentation of women, especially women of color, worsening at every step up the corporate ladder, according to the “Women in the Workplace 2020” study from LeanIn.Org in partnership with McKinsey & Co.
With the challenges identified and quantified, we have to find ways to fix them. You do that by changing the process. This is where the tough work has to be done – the real work. Process is both structural and cultural. By that I mean that you have to determine how the process is actually experienced at your company.
Getting more underrepresented minorities into leadership roles could mean shaking up the way we think about the pipeline and implementing a different set of practices. Maybe the best talent hasn’t run a P&L, but instead has run analytics in HR. We need to identify our top talent, the people who are collaborating and focusing on the toughest issues, no matter where they sit in the organization. For example, if you set a requirement that your data scientists have to have 15 years of experience to get hired, you’re not going to get many women in your applicant pool, because there were so few female data scientists15 years ago.
Note that I did NOT say we should lower the bar as part of this restructuring. Instead, I said we need to modify the process to survey talent across the organization in a different way.
We have to be intentional about tracking the outcomes.
What gets measured gets managed. Regular measurement and reporting have to be embedded structurally in the process.
These can’t be soft goals. We need to compare inclusion and diversity outcomes just as we watch year-over-year growth. Tracking the outcomes provides accountability. A deeply embedded, genuine belief in the need to elevate underrepresented talent with intention is how we will bring about sustainable change.
And we need to be as bold in our goals and action as we can. Every company has made a strong commitment to inclusion, diversity and equity. That’s not new. The question is, how bold is that commitment? And how does it ladder up to real outcomes? What matters is what the best result could be from the commitments we make. What would be the contribution to the greater problem in society?
At TIAA, we’ve set annual goals to meet our workforce diversity targets, and in 2020 we exceeded those goals. But we know opportunities remain to strengthen both gender and ethnicity representation, specifically by increasing the number of women leaders. About one-third of our employees belong to one or more of nine Business Resource Groups, which specifically focus on strengthening inclusion, diversity and equity within our company. That’s above the standard for the financial services industry, but we can do better. So I recently challenged our team to join a BRG they’re not already a part of – as a member of that specific community or as an ally. And for those in a BRG now, to connect with a colleague and encourage them to join, too.
We’ve also focused on finding ways to accelerate progress externally through our spending, investing and service. We’re expanding on the longtime Supplier Diversity Program internationally to broaden the geographic reach of our investments in women- and diverse-owned businesses. Nuveen, TIAA’s asset manager, is driving company disclosure on pay gaps and employee demographics and promoting diversity on boards and in executive leadership. We’re committed to addressing gaps in financial education and by 2023 will provide more than 20,000 hours of instruction for more than 10,000 students.
Here’s one example of the measurable success that has inspired me: Nuveen has engaged with about 450 companies in the U.S. that did not have any women on their boards. And since the start of this initiative, about 325 or so companies have added a female director – an astonishing 75% success rate. We’ve recently started having similar conversations around ethnic and racial diversity at the boardroom level. That’s the type of quantifiable outcome we should all work to achieve.
Many companies and corporate leaders, including TIAA and our executive team, have been committed to this work for many years, and we recognize that it is never done. Every company, every organization, needs to share our best practices with one another. We have to describe what we have done, defining what has worked well so we can further accelerate progress.
I am encouraged because we are mobilizing across all areas of leadership, across all areas of society, to intentionally tackle the systemic, structural challenges. As we continue to focus on accountability as a collective, we will lead and drive transformational, accelerated progress around true inclusion, diversity and equity across the workforce.