Intrigued by his 2010 Corporate Diversity Report, HispanicBusiness magazine caught up with U.S. Sen. Robert Menendez, D-N.J., to ask him how he views the current state of diversity in corporate America, what his thoughts are on its progress and why its presence benefits a company. We also were curious if a 2011 report would be released -- and yes, the senator plans to publish the 2011 Corporate Diversity Report by the end of the year.
How do you define diversity and inclusion in businesses?
Diversity and inclusion to me means seeking to create a diverse workforce because it would be beneficial to your business as well as to your employees. It means CEOs and upper management taking the issue of diversity seriously and making an inclusive climate for employees, not only at entry-level positions, but in decision-making positions.
Why should companies concern themselves with diversity?
Diversity is good for business. There are numerous studies that show that companies with more diverse boards and leadership do better financially. If I were a CEO, I would want to tap into the Latino community, which commands $1 trillion in buying power, is younger than the rest of the population by a decade and is more brand-loyal than any other group.
What is the difference between affirmative action and managing diversity?
Affirmative action is mandatory. Managing diversity at a company is a voluntary practice, and some companies are better than others at taking this issue seriously and implementing change. The challenge is to make companies at the leadership level see how important diversity is for their profits, especially when it comes to upper management and boards of directors.
Are you finding that more companies are creating supplier diversity committees and or departments within their framework? Why or why not?
Most companies have appointed someone, or a group of people, to oversee diversity in supplier management. I think they realize that there is a vast marketplace of diverse businesses that are talented and can really help a company do well. Access to contracts with major companies helps smaller businesses expand and prosper. However, those in charge of traditional supplier diversity tend to not be the ones in charge of contracting out for other types of what I term "professional" services, such as legal services or accounting services, where there are opportunities to do business with diverse firms. Quantifying this is something I hope to get a sense of with this year's diversity survey.
What kind of leadership efforts have you made to ensure a commitment to the diversity initiative or value?
My diversity survey, which I plan to issue regularly, is there to keep companies constantly thinking about their diversity efforts and actually evaluating these efforts to see if they are working. As a senator, I am drawing publicity to this issue because of underserved communities in this country, whether it is a small business looking to grow their capital or a talented individual seeking opportunities to grow within a company. In addition, when I meet with CEOs on a range of issues, I do make a point to ask questions about their diversity practices.
What strategies have you used to address diversity challenges? What were the positives and negatives?
I've used legislative, media and voluntary strategies. I introduced an amendment to the Wall Street Reform bill, which passed into law, that created Offices of Minority and Women Inclusion at each of the federal regulatory agencies to hire and procure diverse fi rms. I also am asking the Federal Reserve to issue a study examining the capital needs of the Hispanic community. In addition, my diversity survey and working group that I've formed to brainstorm this issue is a voluntary measure that can bring publicity to this issue and keep companies thinking about diversity and keep them accountable to the populations they market to.
What discussions are occurring in the political spectrum regarding diversity?
Well, in the more immediate term, I and the other members of the Congressional Hispanic Caucus plan to have a meeting before the end of this year with the directors of all the Offices of Minority and Women Inclusion to get an update on where they are with diversity, what their long-term plans are, and to get a sense of the progress they are making with the Hispanic community. I believe there are real opportunities for improving diversity at our regulatory agencies, but we need to be vigilant and make sure these offices are doing what they need to be doing from the start.
In your 2010 survey on women and minority representation among the senior management of Fortune 500 companies, you found that "minorities represent a total of 14.5 percent of directors on corporate boards and overall have less representation on executive teams than they do on corporate boards." Has this number changed?
Given that the results of the 2011 study have not been reported yet, that is something that remains to be seen. In putting together the first survey, I heard from a number of CEOs that they thought their numbers were better than they actually ended up being on paper, and others who said they want more diversity, but have a hard time finding diverse candidates or contractors. I am hopeful that, with the efforts of the working group I created, we can develop some "best practice" recommendations for companies who want to improve diversity, but could use some guidance in how to accomplish that goal.
Do you believe people of different races and genders have more similarities than differences?
There are differences even within the same race or gender. The importance of diversity is to bring all of those different views together and come up with the best ideas for your organization. I think that goal is enhanced when a range of diverse views, backgrounds and perspectives are represented at the table.
What impact is the Hispanic community making on the business world?
Hispanics are now the largest minority group in the nation, at more than 50 million, with a purchasing power of $1 trillion. Hispanic-owned firms, which are the fastest-growing segment of our American businesses, contribute $345 billion in annual economic investment in this country and are strengthening our economy and ensuring our nation remains competitive in a global marketplace. These numbers show that Hispanic businesses are a significant force within the business community, and will only grow stronger.
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