BOOSTING BLACK REPRESENTATION ON CORPORATE BOARDS- THE NEW ALLIANCE AIMS

Less than a month after the Board Diversity Action Alliance started, big corporations like Albertsons Cos., Centene Corp., Nordstrom Inc., and Under Armour have joined NALD to increase black representation in boards of corporations across America.

The companies join corporate giants Dow, Macy's, Mastercard, PNC, Uber, UPS, and WW (formerly Weight Watchers) as founding signatories of NALD. These Companies undertake to increase the number of different representatives on their boards to one or more, publish their board demographics, and disclose the race and ethnicity of the directors.

In addition, three founding partners work together with NALD. Among them is TPG, the initiative's first private equity partner. This connection will expand NALD's reach into private markets, with TPG focusing on diversifying the boards of directors of portfolio companies.

Le Boulé, whose “Blacks on Corporate Boards” committee focuses on identifying its members and guiding them to the opportunities of the Board of Directors as well as providing training and networking.

And Impact X Capital Partners, NALD's first venture capital partner, dedicated to solving systemic problems by funding underrepresented entrepreneurs. The partners will work with NALD to promote diversity, equity, and inclusion at the board level.

The formation of NALD is a big deal as board diversity is always considered to be slow. Other NALD partners led by Ursula Burns and Gabrielle Sulzberger include Teneo, the Ford Foundation, the Board of Directors, and its founding signatories.

Announced in early September, NALD reports that it is a company-led initiative aimed at expanding the representation of directors of various races and ethnicities on boards of directors, starting with black directors.

NALD upholds corporate diversity and board diversity goes hand in hand. To better serve the wider community of stakeholders, Allianz argues that companies need to understand their employee communities, have a clear perspective, and define a focused approach.

Timing of Board Diversity Action Alliance

The moment for NALD comes when the racial mix of corporate boards now receives a lot more attention over the murder of George Floyd and the ensuing national protests against Black Lives Matter. At the same time, California Governor Gavin Newsom signed a law last week requiring publicly-based companies based in the state to have board members from under-represented communities.

Investingport reported that it is the first in the country to dictate the racial makeup of a board of directors and was inspired by a 2018 state law requiring public corporations to diversify their all-male boards. This law is now facing legal challenges from conservative groups.

Additionally, a new poll shows that little has been done to increase the number of Black, Hispanic, Asian-American, and other under-represented board members, despite U.S. companies promising to change these numbers. The boards of the 3,000 largest publicly traded companies remain largely white, according to a report in the New York Times.

Take Black directors for instance, they make up only 4% of the total, up from 3% in 2015. Black women make up only 1.5% of the 20,000+ directors included in the analysis, beyond other surveys that only included the 500 largest public companies.

The results were published in mid-September by ESG's Institutional Shareholder Services department.

In conclusion

Ursula Burns, the first black woman to serve as the CEO of a Fortune 500 company, Xerox, told Yahoo Finance that companies fail in several areas, including diversity, transparency, employee compensation, and the environment. She currently serves on the boards of directors of Uber, Nestlé, ExxonMobil, Datto, senior advisor to Teneo, and the past chairman of the board of directors of Xerox.

Burns said when you have a challenge or a gap to overcome, use your best entrepreneurial spirit, and most of the time the company will solve the problem.

“I firmly believe this is a turning point for business and society - driven by a mixture of inequalities, environmental issues, the COVID-19 pandemic, and the murder of George Floyd. meets us at the same time. We knew that there was a need to address and resolve these inequality problems in other ways. That's why we founded the Board Diversity Action Alliance because leadership begins at the top. ""

She added that NALD will initially focus on creating black directors because today is a moment we are in and this will have an impact on the black people.

“Our goal is to achieve greater overall diversity - browns, Latinx, women - all of these perspectives are important. NALD is a voluntary, company-led initiative, but overall we're focused on state treasurers, city administrators, and the recent California mandate for results.

When asked about the goal of the African-American representation, Gabrielle Sulzberger, co-founder and general partner of Fontis Partners, said NALD had not set a specific goal. She added that the Alliance wants to see all Fortune 1000s with at least one black director and make significant advances in diversity in general.

"In addition, we would like to see more diversity in private companies and support NALD in recruiting its first PE and VC support partners, TPG and Impact X Capital Partners." She is a director at Mastercard and Brixmor Property Group and a former CEO at Whole Foods.

Declan Kelly, President and CEO of Teneo, says NALD's current goal is to increase diversity on its boards, starting with black directors. As a global consulting firm for CEOs, Teneo spends a lot of time helping executives think about diversity and future leadership succession.

"We believe there should be more black CEOs and executives and we are determined to do our part to support this effort."

Crystal Ashby, President and CEO of the Executive Leadership Council (ELC), added in a press release, “It is not an option but a business imperative to have black men and women on the boards today. Increasing board diversity as a priority improves the company's reputation, helps improve business performance, and has a positive impact on board performance. ""

Tonie Leatherberry, ELC's chief executive officer, said, “ELC's North Star is increasing the number of black executives on its boards. As business leaders, we've seen the diversity of boards of directors expand the ability of companies to respond more effectively to the marketplace through a better understanding of demographic differences. Without a diverse board of directors, companies run the risk of missing out on diverse ideas and diverse leadership. "

Commenting on his position, Darren Walker, President of the Ford Foundation, said, “We know that we need to address the imbalanced structural incentives that distort our economy in order to drive more inclusive capitalism for the benefit of all. This work begins with the Board of Directors. Foundations like Ford still need to do more, and the Board Diversity Action Alliance is bringing together the right voices to move this urgent work forward.