TheEconomistNovember 9th 2019 551To: ceo
cc: pa
Subject: A hard-headed guide to
corporate diversity
Dear David,
Y
ou facepressure to “do something”
about diversity in your company—not
only from your wife and woke children.
Corporate clients increasingly demand it
in your supply chain. Regulators, who use a
“stable” or “inclusive” culture as a proxy for
low risk, are breathing down your neck.
Governments like Britain’s, which now
mandates pay-gap reporting, insist on
making more of your sensitive data public.
And employees, including former ones,
can air their complaints on social media.
Small wonder that 87% of your fellow
bosses told consultants at pwcthat diver-
sity is a business priority. I’m sure you did,
too. After all, you recently posted a job
opening for a diversity manager. You were
not alone; the number of such offers in
Britain has doubled in the past year, say an-
alysts at Glassdoor, a recruitment website.
Since June 2017 more than 800 American
ceos have signed a pledge to “advance div-
ersity and inclusion in the workplace”.
That is where we are: lots of talk, plenty
of initiatives, little change on the ground.
Between 2015 and 2018 the share of female
executives at large (mostly) American and
British firms went from 12% to 14%; for eth-
nic minorities it moved from 12% to 13%.
The ftse 100 has fewer female ceos (six)
than it does bosses who share your name
(seven). In American companies with over
100 employees, the share of black men in
management was 3.4% in 2017, half their
share in the population as a whole—and
virtually unchanged from 3% in 1985.
White women make up 25% of executives
and senior managers, compared with 60%for white men. Something is clearly amiss.
In the past this letter would have gone
straight to your legal department. Since the
term “diversity” entered the corporate lexi-
con in the 1960s it has been code for avoid-
ing lawsuits—especially in America, where
companies have coughed up billions in
fines for discrimination over the years. The
financial sector still treats it mostly as a
compliance issue.
Now you are no doubt tempted to for-
ward it to someone in hr, almost certainly
a woman with an arts degree, a sound mor-
al compass and too little power. Don’t. This
is your problem. Without your leadership
it is unlikely to be solved soon.Keep reading
Deep inside, you may be wondering if any-
thing really needs solving. The short an-
swer is: it does. With that in mind, you
should ask yourself three things.
First, why does diversity matter to your
firm? Is your reputation in trouble, as it was
for Uber, Nike, Lloyd’s of London and oth-
ers scarred by #MeToo? Do you, like con-
sumer giants such as p&g, hope that more
diversity makes for better products? Are
you concerned about attracting and retain-
ing bright sparks? You would be in good
company: 97% of executives fret about in-
creased competition for talent (according
to Mercer’s hr consultants).Letter to a chief executive
Diversity memo
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