Martin Whittaker, CEO, JUST Capital

Twitter: @justcapital

Hernando Cortina, Director of Indexes & Analytics, JUST Capital

Twitter: @justcapital

One of the most pernicious ironies of the technology boom in America has been that despite its progressive ideals and socially-conscious intentions, not to mention the huge amounts of wealth it has created, the tech sector has underperformed when it comes to advancing the economic and social prospects of communities of color and promoting diversity and inclusion in the workplace.

According to the EEOC, when compared to overall private industry, the tech sector employs more whites (68.5 vs 63.5 percent) and Asian Americans (14 vs 5.8 percent) than African Americans (7.4 vs. 14.4 percent) and Hispanics (8 vs 13.9 percent). The gender divide runs just as deep, with more men employed in tech than the overall private sector (64 vs. 52 percent) and women conspicuously underrepresented (36 vs. 48 percent). At the executive level, this disparity is especially prominent among Hispanic and African-American communities, who represent only 1.6 and 1 percent of all executive positions, respectively. And yet, studies have demonstrated a connection between diversity and financial performance, including a recent McKinsey report which shows that, globally, diverse executive teams are 33 percent more likely to outperform their peers on profitability.

In 2017, JUST Capital polled the American public on the issues most important to them. When it comes to just business practices, anti-discrimination initiatives are chief among them—with 82 percent of Americans agreeing that companies should not discriminate in pay and 83 percent agreeing that companies should not base personnel decisions on race, religion, gender, age, ethnicity, sexual orientation, or disability status.

Through our work tracking and analyzing the nation’s largest corporations in the Russell 1000, we identified 47 companies that stand out for their efforts to create equal opportunity workplaces and the work they’ve done to eliminate discrimination from both employee and customer experiences. Among their shared characteristics, these companies have:

• implemented policies to drive diversity and equal opportunity;

• set targets and objectives on diversity and equal opportunity;

• incurred no fines over the past three years by the Equal Employment Opportunity Commission; and

• had no controversies pertaining to discrimination in employment or customer treatment over the past three years.

Our own analysis supports McKinsey’s findings. Financial performance at inclusive companies is greater than that of the other companies we analyze, with a five-year median Return on Equity (ROE) of 19.2 percent versus a 13.8 percent ROE for the rest of the Russell 1000.

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Three companies in particular—Intel, Symantec, and American Express—stood out for specific programs and initiatives that can provide a roadmap other companies can use to guide them on their journey toward cultivating more future-forward, diverse, and profitable workforces in greater support of communities of color.

Intel

Fundamental to Intel’s work is the belief that wide ranging perspectives, backgrounds, and experiences can encourage innovation around the world’s toughest challenges. Founded on this belief, in June 2017, Intel created a three-year $4.5 million initiative to encourage students to remain in STEM programs at six historically Black colleges and universities (HBCUs) through scholarships, student experiences, and tech industry workshops. Intel’s chief diversity and inclusion officer, Barbara Whye, expressed that Intel had “more work to do in achieving full representation by African Americans in technical roles,” and the company’s HBCU program represents a key step in that direction.

Their historic HBCU program is one of several programs Intel has launched in an effort to foster growth for communities of color in the tech industry. Their Latinos in Technology Scholarship, Next Generation of Native American Coders, and Technology Pathways initiatives, for example, all forge avenues for historically disadvantaged and underrepresented communities.

Symantec

Like Intel, Symantec has pioneered programs aimed at improving educational resources for communities of color in the tech sector. In an effort to address the under-employment of women, people of color, and veterans in this field, and help change the trajectory of the tech workforce for underrepresented communities, Symantec established the Cyber Career Connection (Symantec C3) which provides intensive training to individuals looking to build a career in cybersecurity. The program’s success can be seen in its numbers—63 percent of graduates from the program have been people of color and 25 percent of graduates have been female.

In partnership with the non-profit Net Impact, Symantec has pioneered the Racial Equity Fellowship program—a year-long leadership development program for undergraduate and graduate students geared toward improving racial equity on school campuses in an effort to address the racial inequities and barriers that still exist in the business world today.

American Express

At American Express, formerly led by Kenneth Chenault—one of just a handful of Black CEOs represented in the Russell 1000—diversity and inclusion have been a consistent and critical focus for nearly three decades. The company’s Employee Networks have provided opportunities for underrepresented employees—from women to LGBTQ employees to communities of color—to build career opportunities, create cultural shifts in the organization, and develop programs that impact the larger community.

For example, the company’s Black Employee Network (BEN) and Historic Origin & Latin American Network (HOLA) have partnered with management teams to develop financial inclusion solutions and products, such as American Express Serve and Bluebird, which provide greater accessibility to their technical products. Every year, the network holds the Executive BEN Global Forum, which brings together Black leaders to provide development resources and networking opportunities to foster future leaders in tech.

Given how underrepresented communities of color are in the tech sector, the leadership displayed by these companies is critically important. Not only can efforts such as these improve opportunities and workplace conditions for employees of color, they can positively influence corporate financial performance. JUST Capital will continue to track how companies perform on issues of diversity and inclusion and evaluate how these efforts impact profitability, financial growth, and the future economic prospects of communities of color.