While most companies realize the importance of diversity in the workplace, there's still a shortage of African-Americans in the upper echelons of corporate America, according to a survey to be released Wednesday by the Chicago Urban League.
The survey, the first of its kind by the nonprofit organization that aims to drive economic and social change for African-Americans, reveals how corporate boards have failed to adequately represent the makeup of the broader population.
It shows that while 36 percent of Chicago's population is African-American, only 6.6 percent of corporate board members in parts of four Great Lakes states are black.
Education companies are the most diverse, the survey shows, with 18 percent of board seats occupied by African-Americans. Industrial companies, retailers and insurers are the least diverse, with African-Americans making up 5 percent or less of company directors.
The nonprofit surveyed 160 large public companies based in southeast Wisconsin, northeast Illinois, northwest Indiana and southwest Michigan. In total, there are 1,527 board seats at those major corporations, of which African-Americans hold 101. Eighty-five of the 160 companies, or 53 percent, had at least one African-American board member.
The survey shows that while progress is being made to diversify the highest of corporate positions, there is still a lot of work to do, Chicago Urban League CEO Andrea Zopp said.
That work includes not only enlightening companies on the benefits of diverse leadership, including a broader experience base, but also showing them how to widen their net when searching for those leaders.
"The discussion about why this (situation exists) is important," she said.
Research shows that diverse companies do better than their competitors, Zopp said, but there are still many factors keeping minorities from joining boards. That has a lot to do with the way board members are chosen: mostly from a small pool of network connections, she said. By broadening the search pool through the use of recruiters or other means, companies could reach more minorities, she said.
Research in 2010 by The Wall Street Journal showed that while many executives know diversity is a good thing for companies, that belief isn't often translated into practice. That's in part because board members weed out many candidates for having differing viewpoints, and cultural differences can sometimes be viewed as strikes against a particular contender.
While diversity among rank-and-file employees has increased in the past 10 years, national surveys suggest that the percentage of minorities in the highest positions hasn't kept pace.
"Economic uncertainties in the past decade have tabled some companies' efforts to add men and women of color to their boards," said Maria Green, a senior vice president at Illinois Tool Works, in a statement accompanying the Chicago Urban League's survey. "But just as diversification in a company's business units and brands allows it to balance market uncertainties, so too does diversification in the boardroom allow it to broaden its worldview, then hone its strategic direction."
The region's low percentage of African-Americans on corporate boards is largely in line with national data, said Dan Siciliano, a Stanford University law professor and the faculty director of the Arthur and Toni Rembe Rock Center for Corporate Governance.
The typical board member of a publicly traded company "is a white man in his late 50s or 60s, and that means everyone else is going to be underrepresented," Siciliano said.
Broadening searches to find new faces needs to be a top priority, Zopp said.
"I think some of the old boys' network has opened up, but corporate governance committees have to be the first to say that (diversity) is important," she said. "We think in the long run it's a win-win, but boards have to be thinking that as well."
Tribune reporter Peter Frost contributed.
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