News Column

Little Progress in Boardroom Diversity

January 14, 2014

Staff Reports -- HispanicBusiness.com

Carlos F. Orta, president and CEO, Hispanic Association on Corporate Responsibility
Carlos F. Orta, president and CEO, Hispanic Association on Corporate Responsibility

When Carlos F. Orta looks at the latest study about the representation of Hispanics on the boards of Fortune 500 companies, he takes the glass is half-full approach.

With the rise in the U.S. Hispanic population, their representation on the board of directors of major companies has failed to keep pace. Just 133 Hispanics held 171 board seats in Fortune 500 companies and Hispanics only had 3 percent of the seats, according to the latest Corporate Governance Study by the Hispanic Association on Corporate Responsibility (HACR). Of the 133 Hispanics on Fortune 500 boards, 28 are foreign nationals.

"The good news is there has been some progress, but it's going to take quite a bit to get there," said Orta, who is the president and CEO of HACR. "At this rate it might not be until 2040 or beyond until the board representation nears the Hispanic population."

HispanicBusiness does a similar study on corporate representation but focuses on U.S. Hispanics. The HACR study includes Hispanics from the U.S., Mexico, Spain, South America and Central America.

Since doing its first study in 1994, HACR says, Hispanic individuals having seats on major boards has increased from 1 percent to 3 percent, which Orta describes as "stagnant at best." During 2007 and 2008, Orta said, Hispanics lost representation on Fortune 500 boards.

Other findings in HACR's report:

--Hispanic women held just 37 out of 5,511 board seats at Fortune 500 companies.
--Nineteen Fortune 500 companies had two Hispanic directors.
--Ten corporations have Hispanic CEOs. George Paz, CEO of Express Scripts Holding Co., is the highest ranked Fortune 500 CEO, at No. 24 on the list.
--Hispanic representation on Fortune 1000 boards is less than it was 10 years ago.

Orta said HACR continues to press corporations to increase their diversity within the top executive ranks as well as at the board level. Not only does it make good business sense, Orta said, it better positions companies for the country's changing demographics.

While Orta doesn't necessarily support government mandates, he said that voluntary diversity efforts by corporations aren't working.

"In European companies (diversity mandates) have worked," Orta said. "We would call it quotas here in the United States. Realistically, we have to keep the pressure on the companies."

Orta said consumers can be a powerful force in driving change at the companies. He encourages customers to write letters and send emails, saying that companies such as Apple and Sears don't reflect the country's diversity.

"If every HispanicBusiness reader wrote a letter to American Express, they would pay attention," he said.

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