The HACR Corporate Inclusion Index (CII) serves as an evaluation tool for Corporate America’s Hispanic diversity and inclusion practices in four key areas: Employment, Procurement, Philanthropy, and Governance. The HACR CII survey assesses companies on their inclusiveness of Hispanics and is designed to serve as a benchmarking tool that allows companies to measure the outcomes of the policies and practices they have in place in each of HACR’s four pillars. This week, we will discuss some key areas of interest from the Governance pillar of the 2019 HACR Corporate Inclusion Index report and what they tell us about the state of the leadership pipeline for Hispanics in Corporate America today.
WHAT DOES THE GOVERNANCE PILLAR MEASURE?
The Governance pillar of the HACR CII measures corporate leadership. We have already discussed how Employment, Procurement, and Philanthropy play important roles in the sustained growth of the Hispanic community. It is Governance, however, that sets the tone for how effective the strategies in those other pillars will ultimately be. For the most part, corporate leaders understand the value of diversity and inclusion, yet many corporations lack Hispanic representation at their highest levels, especially in the C-suite. The C-suite exerts great influence over corporate culture and is ultimately responsible for creating an environment where diversity and inclusion initiatives can succeed. Diverse employees want to see their diversity reflected in their corporate leadership. Diversity in the pipeline ultimately begins with leadership and is sustained through leadership.
WHAT DID WE LEARN?
While progress towards diverse corporate Governance has been made, the action required to make change possible lags behind the need for leadership that is representative of the U.S. Hispanic population. About 18 percent of the U.S. population is of Hispanic descent, with this number expected to increase to 28 percent by 2060.  Yet, our 2019 CII report found that Hispanics account for only eight percent of corporate board directors and five percent of corporate executives. For Latinas, these numbers are even lower. Latinas hold only two percent of board seats and only one percent of executive positions. In fact, Latina board representation has remained below three percent for the past five years while their executive-level representation has remained below two percent for the past five years.
Now more than ever, Corporate America needs effective governance. No matter the company, employees and stakeholders alike need to know that there is a plan in place to adapt to these uncertain times and to recover from them. Leadership is needed that can inform where the supplies go and who will produce them. Leadership also needs to evaluate what philanthropic efforts continue to take place and which communities will be recipients of them. Strong governance is also needed to know what employee groups are disproportionately impacted by this crisis as well as how well-informed the re-introduction of displaced employees will be once they begin returning to the workplace. Without leadership that can inform such crucial decision-making, the structures for the direction and growth of a company will not stay intact through this crisis.
The most successful companies establish effective tracking measurements. Effective measurements ensure that companies are better informed of their strengths and their areas of opportunity. It is crucial that corporate leadership not only establish effective tracking measurements, but also use them to inform their approaches for improving their diversity and inclusion efforts and strategies. By doing so, they create roadmaps that are both scalable and sustainable. Clearly defined measurements also signal to stakeholders and employees that they take their responsibility seriously and see the value in inclusion.
For many companies, the analysis and curation of diversity and inclusion metrics is often, but not always, consigned to a specific individual, the Chief Diversity Officer (CDO). This individual is uniquely equipped to inform an organization’s leadership of the diversity and inclusion needs throughout the various levels of the organization and companies with strong diversity and inclusion efforts are ones that leverage the insights these professionals have to offer. They then use these insights to help shape their decision-making in three key ways:
- Design succession plans for key leadership positions
- Create policies and initiatives that yield diverse slates for open leadership positions
- Communicate progress internally throughout their organization
What’s more, many companies now ensure their CDO reports directly to or has a dotted-line relationship with the company’s CEO. Such access allows for critical information about a company’s diversity and inclusion efforts to quickly benefit decision-making, evaluation, and goal planning at the highest levels of the company.
To learn more about governance trends and best practices, download a copy of the 2019 HACR Corporate Inclusion Index report here.