Beyond Promises to Progress: Member Engagement Toolkit & Guide

Black CEOs & C-Suite Officers Speak Out on Diversity

Member Engagement Toolkit & Guide

Beyond Promises to Progress: Black CEOs & C-Suite Officers Speak Out on Diversity Member Engagement Toolkit & Guide

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Black CEOs & C-Suite Officers Speak Out on Diversity

Member Engagement Toolkit & Guide

Dear Fellow Members: The Executive Leadership Council is pleased to release Beyond Promises to Progress: Black CEOs and C-Suite Officers Speak Out on Diversity. The time since George Floyd’s murder has been one of reckoning, reflection and renewed commitment. While there has been some progress, much remains to be done. The ELC, many of our members and others are working diligently to ensure we move forward more aggressively against a business landscape that has consistently underserved the interests of the Black community when it comes to diversity, equity and inclusion.

Beyond Promises to Progress was commissioned by The ELC Legacy Initiative as a further call to action that corporate America, and in particular our member affiliated companies, must do better in terms of delivering against an obvious and critical business and societal imperative. Some critics have argued that Black people are losing ground by almost every measure across virtually every institution in America.

Business has grappled with diversity for many years and it was a primary reason for The ELC’s formation 35 years ago.

The ELC is now doubling down on efforts to make diversity, equity and inclusion a greater reality in the workplace at every level and in the communities in which we live. In previous moments like these, past commitments came and went with only marginal progress. We want this moment to lead to real and sustainable progress.

We are deeply indebted to Dr. Stephanie J. Creary of the Wharton School of Business for bringing her scholarship and voice to the paper. Dr. Creary is a superb scholar on topics like diversity, inclusion, identity and relationships. We are especially pleased that some of The ELC’s most prominent and longtime leaders and friends spoke openly and honestly about this subject and the need to move forward more aggressively. But for us to have the kind of impact necessary to bring about change, we need the support of individual members.

This document is a guide to help gain maximum distribution of the paper and garner support for the strategies and tactics it outlines. Included are: • Suggestions on how you might use the paper • A Q&A on frequently discussed topics • A brief summary of the paper outlining key challenges and takeaways • Additional sources of information and reading • Resources for assistance if necessary We would love to hear from you on any additional thoughts you may have, and we would like to get feedback on the process you use and the reactions you get. For additional information, please contact Member Services at memberservices@elcinfo.com with the subject line “Beyond Promises Paper Inquiry”.

Best regards,

The Executive Leadership Council Legacy Initiative 2

Black CEOs & C-Suite Officers Speak Out on Diversity

Member Engagement Toolkit & Guide

Suggestions for Using Beyond Promises to Progress: Black CEOs and C-Suite Officers Speak Out on Diversity in Your Organization • Please be sure to share the paper with key leaders in your company/organization. This should include, but not be limited to:

 The CEO

 Heads of HR, Talent and Procurement

 Top diversity, equity and inclusion professionals

 Key influencers, as appropriate

 Other allies, including middle managers at your company, who are often on the front lines of implementing diversity and inclusion initiatives • Attach a note with the paper and/or press coverage of the paper and ask to discuss the paper’s findings and key themes at an upcoming board, company or staff meeting • Be sure you understand the current state of progress regarding your company’s commitment to DE&I, including metrics around advancement, hiring, retention, procurement, community investment and participation in diversity, equity and inclusion initiatives • Be sure you understand what commitments your company has made recently and the progress against those commitments and initiatives • Encourage your company leadership to create safe spaces for having frank discussions about racial equity and inclusion, and to develop an accountability framework for executing strategies related to racial equity and inclusion • Encourage more transparency on these matters • Ask if additional resources are needed or helpful

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Black CEOs & C-Suite Officers Speak Out on Diversity

Member Engagement Toolkit & Guide

Q&A: Why – and Why Now? What disparities exist between both workers and executives of different races in the business sector?

Black Americans have suffered the consequences of systemic racism for more than 400 years. As a result: • Black people hold only three percent of executive or senior-level roles and one percent of Fortune 500 CEO positions • Black men and women, on average, earn 87 percent and 63 percent, respectively, of what the average white male worker earns • The median wealth gap between Black and white families of 12 cents per $1 of white wealth is largely unchanged over the past 30 years, according to 2019 data from the Federal Reserve Bank of St. Louis • The one area of unmistakable growth is in diversity management staffs, but is that sustainable?

How does this impact the U.S. economy more broadly?

Closing the Black wage gap would create positive impacts for the overall U.S. economy, adding $2.7 trillion in income available for spending or investment. Improving access to housing credit for Black homeowners has added $218 billion in sales and expenditures to the American real estate market.

Providing fair and equitable lending to Black entrepreneurs could add more than $13 trillion in business revenue and potentially 6.1 million jobs per year to the economy.

What solutions have been proposed to advance diversity, equity and inclusion in corporate America?

Most firms realize that increasing the representation of Black employees in leadership positions will take more than a one-off approach. Instead, recommendations from experts have emphasized the need for a “systems-based” approach in which leaders aim to transform company-wide structures and processes, and to increase board members’ engagement in racial justice issues. Specifically, there have been calls for: board members to ask firm management for data on workforce diversity and pay equity; public disclosure of board diversity statistics; and sharing of risks, goals and strategy related to racial and ethnic diversity.

Why haven’t these strategies resulted in more tangible results?

Conversations about racial equity in corporate America have often lacked perspectives from Black executives who have been fighting this fight for years, and often lacked the support of their companies or other leaders. But these Black executives have an unparalleled understanding of the systemic challenges that exist and what truly needs to be done to gain traction. The goal of this report is to seek out those executives and share their unique insights.

Between March and May 2021, we interviewed 17 former CEOs and current executives to find out what was inhibiting racial equity and justice, and to find out what is missing from efforts to achieve it. Their answer: A multi-level framework of strategies for improvement and a roadmap for instilling accountability toward executing these strategies and achieving the goal. It should be noted that these are not all brand new or never before tried ideas. Often, what is needed is the determination and the willingness to stick to a plan.

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Black CEOs & C-Suite Officers Speak Out on Diversity

Member Engagement Toolkit & Guide

Key Takeaways & Talking Points • Leaders identified four key systemic challenges facing Black leaders that can inhibit racial equity and justice in corporate America: the persistence of systemic racism; dilution of diversity efforts to advance Black employees; being asked to take on more roles than non-Black peers while feeling pressured to outperform them; and mental health concerns.

• Ending racist practices in corporate America will require a multi-level framework of strategies, including public policy advocacy, company structure and culture building, and leader development.

• Potential public policy advocacy strategies include creating public-private partnerships, advancing voting legislation that supports Black people’s social and economic progress, and creating job opportunities for Black workers that support a public policy agenda, such as a higher living wage. While historically many corporate leaders have shied away from taking a clear public policy stance, the leaders interviewed emphasized that there is now “a window” to take such positions due to an increased willingness by many companies to speak up and a Presidential administration that appears committed to prioritizing racial equity.

• Company structure and culture building involves treating racial equity work like other business processes and practices instead of as an initiative primarily owned by a chief diversity officer.

Interviewees agreed that “embedding diversity in the DNA of companies like other business processes and practices” is a long-standing issue in corporate America.

• Structuring diversity and racial equity work in corporate processes and practices requires a strategic approach. It must start with a clear vision, measurable objectives, strategic imperatives, tracking, metrics, clear accountabilities and follow up over a sustained timeframe. It must also include all the people at the company, in addition to the purchases of goods and services from diverse vendors and professional services providers. It must also include corporate giving.

• For leadership development, different solutions may be needed for non-Black and Black leaders.

• For non-Black leaders, changing hearts and minds is often important. Black leaders need to be empowered to effectively manage issues of racial equity, without fear of retribution or taking a career-altering risk.

• Companies need to create “safe spaces” where leaders can have tough conversations about actions they need to take to advance racial equity.

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Black CEOs & C-Suite Officers Speak Out on Diversity

Member Engagement Toolkit & Guide

Putting Words Into Action – Developing an Accountability Framework Within Your Company •

Accountability is key to ending racist practices in corporate America and within individual companies.

The roadmap for instilling accountability includes accountability partners, integrated plans, objectives and metrics, incentives and consequences, and tools for external transparency.

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One key accountability partner is your company’s board of directors. For the board to operate effectively in this role, there must be a culture that empowers directors to speak up. The company’s racial equity agenda needs to be a regular topic at board meetings and input from directors of different racial backgrounds must be solicited. Further, the CEO and C-suite leadership need to partner with the board and the chief diversity officer to drive the five-year strategic plan.

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As C-suite leaders and people and culture experts, chief diversity officers should have enough institutional power to affect change in the company. Yet, in order for them to be successful in their role, they need to be treated like other C-suite leaders in terms of reporting structure, strategic plans, and accountabilities.

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Middle managers play an enormously critical role in shaping the culture of most companies. They can also be key accountability partners in executing racial equity strategies. Senior leadership needs to ensure that they have the necessary resources to execute the strategy and the training to understand its importance and help drive it.

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Objectives and metrics for public policy advocacy, company structure and culture building, and leader development should be integrated into the company’s strategic plan and annual plans.

Progress should be reviewed annually, and there should be a formal assessment of what’s working and what isn’t.

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Metrics to track progress toward racial equity should be easily understood, but not so limited that they simplify the complexity of the issues. For example, in addition to targets for hiring, there should also be a strategy in place for inclusion, and for giving employees the opportunity to thrive once they are hired into their positions.

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Diversity goals need to be treated like any other business goal: they should be incorporated into decisions about compensation, bonuses or stock options for the CEO and executive team. Oversight of incentives and consequences should start with the board. Beyond the board, senior leaders need to utilize different incentives and consequences in their diversity reports for meeting or not meeting racial equity objectives.

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Transparency tools are important for increasing accountability for advancing racial equity and justice in corporate America. Internally, these tools include reports on the results of annual culture surveys with information broken down by department and leader scorecards, which are important for identifying key areas for intervention and assessing progress.

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External transparency tools are also critical for ensuring that leaders stay the course in advancing racial equity and justice. For instance, employees, the board, and the general public can ask companies that have made public commitments to advancing racial equity about their strategies, goals, objectives and results.

Additional Reading and Resources: • Improving Workplace Culture Through Evidence-based Diversity, Equity, and Inclusion Practices • Diversity Wins: How Inclusion Matters • Black Women Leaders: Navigating the Intersection of Gender and Race

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