Limited progress for Hispanic inclusion on corporate boards says study
While there is solid proof that board diversity is good for business, in 2014, it is still uncommon to find Hispanics sitting on corporate boards.
January 02, 2014 at 07:03 AM
3 minute read
The original version of this story was published on Law.com
While there is solid proof that board diversity is good for business, in 2014, it is still uncommon to find Hispanics sitting on corporate boards, according to a new study.
In fact, Latinos hold a mere 37 out of 5,511 board seats in the Fortune 500, according to findings from the 2013 Corporate Governance Study (CGS). The study, conducted by the Hispanic Association on Corporate Responsibility (HACR), reveals little progress for Hispanic inclusion on corporate boards over the last 20 years. Overall, Hispanics held just 3 percent of seats in the boardroom of the Fortune 500 last year. In addition, only 2 percent — or 10 Fortune 500 CEOs — are of Hispanic heritage.
This year's HACR CGS shows that although Hispanics have made certain gains in the number of seats held in the boardroom, those gains are still a small percentage of the overall total of eligible seats. Between 1993 and 2007, there was significant momentum in Hispanic representation in the corporate boardroom. However, 2013 data suggests the momentum has been lost and it is important to highlight these gains were minimal and not representative given the size and consumer strength of the U.S. Hispanic population.
Carlos F. Orta, president and CEO of HACR, chided big companies like American Express and Apple — leaders in their respective industries — for entirely excluding Hispanics from their boards.
“Companies such as American Express, Apple, ExxonMobil and Sears should be embarrassed their boards exclude Hispanics despite a demographic of 60 million consumers with a buying power of $1.3 trillion,” Orta said in a statement. “The lack of Hispanic inclusion doesn't bode well for shareholder value given the U.S. Hispanic consumer is the 14th largest economy in the world.”
The HACR CGS measures Hispanic inclusion in the C-Suite and boardrooms in Fortune 500 companies. The HACR CGS is a publication of the HACR Research Institute (HRI), the research arm of HACR, which conducts research and analysis of Hispanic-related issues in Corporate America.
Diversity in the boardroom goes far beyond filling quotas or creating a board that just looks good to the public — diverse boardroom composition is also good for business. This is the contention of many executive coaches and recruiters.
The best boards are often the most diverse boards, contends Mike Myatt, who recently wrote in Forbes “they can offer a depth and breadth of insight, perspective and experience to CEOs that non-diverse boards simply cannot.”
For more related stories on boardroom dynamics and trends, check out InsideCounsel's coverage below:
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