While America is becoming ever more diverse, corporate America has yet to reflect this change. In particular, there is a significant gap between the rapidly growing Hispanic population of over 50 million and the very small number of Hispanics on corporate boards.
According to the Pew Hispanic Center, Hispanics already account for over half of U.S. demographic growth and nearly half of consumer spending growth. Yet the Alliance for Board Diversity (ABD) found that board diversity actually decreased since 2004. In 2011, the ABD released a report called “Missing Pieces: Women and Minorities on Fortune 500 Boards” showing that Anglo men comprise 77.6% of directors and Anglo women comprise 12.7%. Hispanic men accounted for only 2.3%, and Hispanic women only 0.7%. The report also showed that among Fortune 500 boards, 37 companies have zero women or minorities on their board. Clearly, there is a significant gap between board composition and the critical mass of purchasing power and population of women and minorities, especially when it comes to the Hispanic community.
Corporate trailblazer Sol Trujillo has been the CEO of three $40+ billion market cap companies on three continents and serves on the boards of Target and WPP. “In the 1980’s corporate America had an epiphany.The epiphany was that women accounted for a majority of purchasing decisions and would add value in executive and board roles. Companies that wanted to grow made marketing to women a priority growth strategy,” Trujillo sums it up. “The analog is the same today for Hispanics. With $1.2 trillion in purchasing power growing by nearly $100 billion per year, Hispanics clearly have a critical part in the growth of our nation. For companies who want to create shareholder value, having the perspective, experience and affinity of Hispanic board members is simply smart business.”
BRIDGING THE GAP
The Hispanic Association on Corporate Responsibility (HACR) aims to bridge this gap. Founded in 1986, HACR is focused on advancing the inclusion of Hispanics in corporate America in the areas of employment, procurement, philanthropy, and governance. When it comes to Hispanic inclusion, HACR has gained widespread recognition as the “go to” organization for Hispanic leadership in corporate America. HACR President & CEO Carlos F. Orta said: “HACR’s strength comes from our unique partnership: 16 national, Hispanic-led grass roots and business organizations working together with our 50 plus Fortune 500 companies and their executives. That’s the key to our success.”
HACR’s flagship event is the HACR Annual Symposium, which brings together Hispanic executives, government officials, and community leaders for two days of speakers, panels, and networking opportunities. The 20th Annual HACR Symposium, taking place this year in Chicago on April 16-17, is set to raise the bar. HACR’s focus on employment, procurement, philanthropy and governance will be reflected in a strong Symposium agenda. Panels include “The Power of Hispanic Inclusion™”, which will feature the leaders of key national Hispanic organizations including the Latino Coalition, the New America Alliance, and the Society of Hispanic Professional Engineers. The philanthropy panel, “Trends in Philanthropic Giving,” will feature speakers from notable philanthropic institutions including the Kellogg Foundation, McCormick Foundation, Anheuser-Busch Foundation, and the Ford Motor Company Fund. This year’s Symposium will also include Robert Rodriguez, the Executive VP and COO of Denny’s Corporation Worldwide, who oversees nearly 1700 Denny’s restaurants. With over 40 years of food service experience, Rodriguez has been instrumental in expanding brands nationally and internationally, and served as president of companies such as Pick Up Stix and Dunkin’ Donuts.
“Denny’s has been a proud supporter of HACR since 1997,” said Rodriguez. “We value diversity in all areas of operations and are dedicated to strengthening the company’s involvement with, and in support of, Hispanics and the minority community.”
In addition to the Symposium, HACR also has several key programs that reflect a strong pipeline of Hispanic leaders. The HACR Young Hispanic Corporate Achievers™ program features young executives who have been nominated by their companies to participate in a three-day executive leadership development program. The HACR Corporate Executives Forum™ brings together senior corporate executives from Fortune 500 companies for an annual forum that includes executive seminar content, peer-to-peer interaction, and networking. The HACR Corporate Directors Summit™ (CDS) provides corporate directors of Fortune 1000 companies an opportunity to come together for an annual summit that includes board-level seminar content, discussion, and networking. Each of these programs has an on-going network component where once an individual participates they become part of a growing network of their peers.
Recently, HACR produced an award winning film called Insider Game. The documentary takes on the topic of the low level of Hispanic inclusion in corporate America. “Insider Game tells a compelling story of commitment to our community through the lens of very successful corporate directors whose commitment to Hispanic inclusion is steadfast and powerful.” said Orta. Insider Game features insightful comments and strategic observations by well-known corporate leaders such as Rocky Egusquiza, Monica Lozano, Sol Trujillo and Sara Martinez Tucker. It can be viewed at InsiderGame.org.
THUMBS UP OR DOWN?
The HACR Corporate Inclusion Index is a survey and analysis of the level of Hispanic inclusion at major corporations. HACR sent the 2011 Corporate Inclusion Index survey to 122 companies, including all Fortune 100 companies and its corporate partners outside of the Fortune 100. They received responses from 52 companies and evaluated 50 companies. The survey included questions on employment (workforce and recruitment), procurement (spending), philanthropy (community investment), and governance (leadership). Companies that responded to the survey got a “thumbs up” in the report and companies that failed to respond got a “thumbs down”.
Based on a 100-point scale, the highest rating was 95 points, the lowest rating was 35, and the average rating was 64. Examples of some companies with high ratings included AT&T (95), Citigroup (95), GM (85), MillerCoors (85), and Sodexo (85). Examples of companies with low ratings included Kroger (45), Deere & Co. (40), and DuPont (35). “We are honored by HACR’s recognition of our holistic approach to diversity and inclusion,” said Debbie Storey, AT&T Senior Vice President of Talent Development and Chief Diversity Officer. “At AT&T, diversity and inclusion are woven into all our business strategies and are key in achieving our business goals.”
GM has 217,000 employees in every major region of the world and provides broad support for the Latino community in a number of key areas. Latinos have been represented on the GM board of directors by Dr. Cynthia A. Telles since April 13, 2010. Currently on the faculty of Department of Psychiatry of the University of California School of Medicine, she was recently appointed to the White House Commission on Presidential Scholars by President Obama. Dr. Telles also serves on the boards of Kaiser Permanente and Americas United Bank.
Regarding Sodexo’s participation in HACR, Sodexo, Inc. President and CEO George Chavel said: “Sodexo is proud to be a corporate member of HACR and to contribute to its mission by participating in forums that promote open dialogue and the sharing of best practices that improve the Hispanic inclusion efforts not only at Sodexo but throughout Corporate America. As we work to achieve even greater inclusion for Latinos at Sodexo, it is an honor to consistently be among the top companies in the HACR Corporate Inclusion Index based on our commitment to Hispanic inclusion in the areas of employment, procurement, philanthropy and governance. While inclusion is essential to being a good corporate citizen, the economic and community contributions of our Hispanic employees strengthen our business and are fundamental to our mission of providing quality of life services to our customers and the communities we serve.”
The high-rated companies deserve praise for their great work on Hispanic inclusion. The medium and low-rated companies deserve praise for having the courage to respond and be transparent. They have a scale by which to measure their progress in increasing Hispanic inclusion. There are some very large and very well-known companies that did not participate and got a “thumbs down” in HACR’s report. The full report is at HACR.org.
MAKING AN IMPACT
The 30 Fortune 1000 corporate directors who are members of the HACR Corporate Directors Summit™ (CDS) serve on a total of 48 corporate boards. HACR CDS members are actively making an effort to improve Hispanic inclusion on corporate boards. Although it is often “behind the scenes”, many HACR CDS members periodically refer Hispanic candidates for consideration of open board seats and executive positions. This year will be the fifth anniversary of the program, which Orta describes as “a major resource in HACR’s efforts to increase the number of Hispanics on corporate boards.”
One leading HACR CDS member is Aida Alvarez. Whether as a teacher, journalist, banker, government official, or board member, Alvarez has always had a big impact on the people and organizations around her. A native of Puerto Rico, she was an award-winning journalist, reporter, and anchor and then worked as an investment banker before going into public service as the head of the Office of Federal Housing Enterprise Oversight and then Administrator of the U.S. Small Business Administration. Always a leader, Alvarez was the first Latina to serve in a cabinet-level position in the U.S. government.
Throughout her career, Aida has consistently given back to the community by serving on non-profit boards. Her stellar career made her a great candidate for corporate board service. Today, Alvarez serves as a corporate director of Walmart Stores and UnionBancal Corporation, as well as Chairman of the Latino Community Foundation. Walmart, with 2011 revenues of $435 billion, a market capitalization of $257 billion and 2.1 million employees, is one of the largest companies in the world. Alvarez is the Hispanic voice on the board of Walmart. To Walmart, the Hispanic community is a large and growing customer base, an integral part of its workforce, an important source of suppliers, and a very influential political constituency.
In discussing the importance of Hispanics serving on boards, Alvarez shared the following: “As we look at the number of Latinos in this country…we really have to take a leadership role in shaping the opportunities and the experience for Latinos as a critically important part of the American populace. You can do that through your service on boards, both non-profit and for-profit. … Having one or more Latino board members will provide a perspective that will be valuable from a business standpoint. Also, not just in an externally focused way but it’ll raise the issue internally of who works within the company and who is being promoted within the company. Hopefully you’ll start to see as the board members raise questions that there is more cultivation of Latino talent, of Latino men and women who can climb up the ladder and take on more senior positions.”
Another HACR CDS participant is Charlie Garcia, whose professional career spans a broad spectrum of finance, marketing, and entrepreneurial ventures. Originally from Panama, he graduated from the U.S. Air Force Academy and went on to get a law degree and become a White House Fellow. Garcia founded Sterling Financial and has also been involved in public service, serving on the Florida State Board of Education, and was recently tapped by CNN as an expert on Hispanic issues.
For five years, Garcia served on the board of the Winn Dixie grocery store. Winn Dixie operates in five states in the Southeastthat are heavily populated by Hispanics. When asked about the importance of having a Hispanic perspective on boards, Garcia shared the following: “I think a Hispanic perspective in the boardroom can go right to the company’s bottom line. I worked closely with the Winn Dixie board, the CEO and the management team to advise them on how to make our company the supermarket of choice for Hispanic consumers. The argument is purely factual. The Food Marketing Institute reports that Hispanics spend $133 a week on groceries, compared with $92.50 by other shoppers, an impressive $40.50 difference. That $40 difference between the weekly grocery expenditures of Hispanics and non-Hispanics adds up to $2,106 per year. In a business with thin margins, this justifies grocers’ re-allocation of resources to more effectively pursue the Hispanic shopping dollar. These facts repeat themselves across many industries.”
All members of HACR CDS agree on the importance of bridging the gap between the Hispanic community, corporate America, and corporate boards. CDS member Nina Vaca is Chairman and CEO of Pinnacle Technical Resources, Chairman of the U.S. Hispanic Chamber of Commerce, and a member of the boards of directors of Comerica and Kohl’s. “There is a strong business case for having diverse perspectives on boards—perspectives that reflect consumers, suppliers and workforce that are critical to successful corporate strategies,” she concludes. “If you look at the corporate directors on Fortune 1000 boards who are Hispanic you’ll find a tremendous depth and breadth of skill sets and expertise across all sectors. They are not only great board members in their own right, they bring a perspective into the boardroom that adds extra value in understanding and connecting with the rapidly-growing Hispanic community, which accounts for one in six Americans today.”