Why Diversity Matters in the Boardroom
Culture The importance of diversity in the boardroom extends far beyond filling quotas or creating a lineup that looks good to the general public.
By July 1, 2050, Census population projections indicate there will be 133 million Hispanics in the United States, representing nearly 30 percent of the nation’s total population. Corporations will need to rely on this population to not only replace their aging workforce and to attract consumers and investors, but also to provide the foundation on which their governance boards will be able to harness the strength of diversity to solidify their future.
Raising our voice
As the size of the Hispanic population increases, so will their political and economic power. Hispanics are the fastest growing consumer segment in the U.S. who by 2015, will wield $1.5 trillion a year in purchasing power. In addition to the growing economic power, the Hispanic labor force participation rate is also increasing. By the end of this decade, Hispanics will make up three quarters of the nation’s labor force. Considering these projections, companies should be looking at ways of engaging the voice of this population around the decision-making table.
"As Hispanic economic power continues to grow, the Hispanic community should take control of their commercial interests and continue to work towards equal representation among decision-makers in Corporate America."
These rapidly changing demographics mandate diversity as a way of navigating the domestic and international markets, but we still haven’t seen sufficient Hispanic inclusion in Corporate America. Recent findings of the HACR Corporate Governance Study (CGS) reveal that in the past 20 years there have only been minimal gains in Hispanic representation in Corporate America. Only two percent of CEOs in the Fortune 500 are Hispanic, and between 2007 and 2013, Hispanic representation in corporate boardrooms increased by less than one percent. In 2013, 134 Hispanics held 172 board seats out of over 5,500 total seats in the Fortune 500, representing just over three percent of board seats. Although it is possible the slow progress can be traced to the economic downturn that began in 2008, there is still an obvious lack of commitment to Hispanic inclusion among Fortune 500 companies.
Across the board
Unfortunately, this is not a problem that is unique to the Hispanic community. Women and other racial minorities face the same dismal picture, as the majority of Fortune 500 board members are Caucasian men. Hispanics and other minority groups should take note: when we’re not included in boardrooms, our views and preferences aren’t accurately represented in products and advertising. This affects accessibility, product choices, how we’re marketed to, and how we’re portrayed.
Without representation in the boardroom, our commercial interests don’t have an equal voice. As Hispanic economic power continues to grow, the Hispanic community should take control of their commercial interests and continue to work towards equal representation among decision-makers in Corporate America. The quickly shifting demographics of the U.S. will require Corporate America to step up and take notice of the Hispanic population or suffer the economic consequences of excluding the fastest growing segment of the U.S. population