Right now companies have these pretty deeply embedded structures that are geared toward diversity, says Lieberman, who studies race-based discrimination and policy. If a diversity program is to become an instrument of racial equity, rather than an instrument of creating and sustaining diversity, theyre going to have to do something different.
So why not consider the coercive powers of quotas? In perhaps the most successful diversity push in recent years, California passed a law in 2018 requiring all public companies based in the state to have at least one female director by the end of 2019. At the close of 2021, boards with five directors must have at least two women, and those with six or more have at least three. Failure to comply costs $US100,000 ($145,000) the first year and three times as much after that. The move was unpopular, even with women, because it suggested hiring committees would have to lower their standards. A year after compliance began, thats not what happened. Instead, opportunities opened for overlooked executives.
There was a perception when the law passed that there was a limited pool of qualified candidates, says Annalisa Barrett, a governance expert at KPMGs Board Leadership Centre. It doesnt seem to have been the case. Women accounted for almost half of new board seats in the state in 2019, outpacing female hires for similar positions in the rest of the country.
Even without quotas, people assume you were hired because you were Black.
Kimberly Reyes, a Black copywriter
There are judicial roadblocks, of course. Since the Supreme Court weighed in on its first affirmative-action case in 1978, its limited government use of numerical targets. In the ruling, a university admissions case, the court said an institution could use race as a factor in its decisions, but that quotas went too far.
Meanwhile, Californias law has faced multiple legal challenges. Judicial Watch, a conservative activist group, called the requirement unconstitutional in a lawsuit filed on behalf of taxpayers, and a shareholder of a California-based company with an all-male board argued in a federal complaint that its discriminatory. The first case is ongoing; the second was dismissed in April. While lawyers duke it out, California companies are moving ahead with meeting their quotas. Even if the law is struck down, the gains women have made will be in place.
Despite programs to improve diversity, there are even fewer Black coaches in the NFL than there were five years ago.AP
Boards are just about as White as they are male as of 2019, 37 per cent didnt have a single Black director. Still, a law similar to Californias that would address racial inequities is highly unlikely and would face much stronger opposition than the gender quota law, says Michael Hyter, chief diversity officer at Korn Ferry. There is an apprehension among companies that if they are perceived as setting a target for hiring for people of colour, that the focus will mean hiring less qualified candidates, Hyter says. Its a familiar yet unfounded fear that is hilarious on so many levels, says Kimberly Reyes, who spent years working as one of a few Black copywriters at various companies. Even without quotas, people assume you were hired because you were Black.
If legislators wont act, shareholders could. State Street, BlackRock and activist investors already pressure companies to disclose the gender diversity of their boards. Those campaigns have resulted largely in gains for White women. They could shift their focus to Black representation, says Natasha Lamb, a managing partner at Arjuna Capital, which pushes banks and tech companies to disclose gender and racial pay gaps. People bristle at the idea of racial quotas, Lamb says, but they work. There need to be interventions, she says. The protests are an intervention. Shareholders exercising their voice is an intervention. Without intervention, nothing is going to change.
Vanguard says it had already planned a 2020 emphasis on getting boards to disclose their racial and ethnic data. BlackRock says it continues to be committed to pushing for board diversity. State Street says its committed to being part of the solution and continuously evaluating the issue of racial diversity.
Our goal is to inspire people versus shame them.
Pam Jeffords, diversity and inclusion consultant at PwC
The boardroom is just one of many White corners of the business world. Up and down the corporate ladder, strictly enforced targets could legally be used to fix racial imbalances, says David Oppenheimer, director of the Berkeley Centre on Comparative Equality & Anti-Discrimination Law. Quotas cant be used in perpetuity, he says, but they can be put in place for a short period to correct a manifest imbalance in workforce make-up.
Its sort of like dieting, says Oppenheimer. Sometimes you have to go on a severe diet to lose some weight, and then hopefully you can go on a maintenance diet where you can eat a little bit more. Thats the theory. One hopes it works better than dieting.
Why arent more companies wielding the powers of this blunt but useful tool in their commitment to diversity? Quotas are always a bit of an issue, says Pam Jeffords, a diversity and inclusion consultant with PwC. Our goal is to inspire people versus shame them. The consulting firm prefers to look at hiring rates instead. The idea, she says, is to make sure companies arent hiring any specific demographic at a greater rate than another. Jeffords concedes that alone wont change overall representation over time: What are we really looking for? We dont want the numbers to go down. Theres been some decreasing in hiring rates for Black employees.
Half-measures rarely move anyone forward. Take the Rooney Rule named for Dan Rooney, former chairman of the diversity committee of the NFL, which pioneered it. The 2003 rule, widely adopted by corporate America, requires hiring managers to include a diverse slate of candidates for a given role. Since 2003, non-Whites have been considered for open slots in head coaching positions at professional football teams. There are just as few Black coaches now as there were then. In May, the leagues owners all but admitted the failure of the program when they met to consider additional incentives for teams that hire non-White coaches.
To be sure, quotas are limited in what they can achieve. In Norway, where public companies must set aside 40 per cent of board seats for women, they hold 42 per cent of those positions. But even with all those women in charge, men still hold most of the executive power. Only 7.7 per cent of those companies have female chief executives. In Malaysia, government policies giving preferential treatment to the ethnic Malay majority have helped them move up the social and economic ladder, at the expense, critics say, of ethnic Chinese and Indians.
The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.
US Supreme Court Justice John Roberts in a 2007 ruling
Quotas wont solve racism. As US Supreme Court Justice John Roberts said in a 2007 ruling, the way to stop discrimination on the basis of race is to stop discriminating on the basis of race. Sending Black people into a hostile environment isnt much better than not hiring them at all. If you hire a lot of Black people and the culture is such that their jobs are at risk, they will be undermined, says Nadia Owusu, who does diversity and inclusion work at Living Cities and earlier this year wrote a column for the online magazine Catapult called "Hiring a Chief Diversity Officer Wont Fix Your Racist Company Culture. Indeed, the internal dynamics of corporations often end up undermining the executives in charge of diversity, many of whom are women of colour, Owusu says.
Quotas also invite lawsuits as they have in California. Harvards use of race as a factor in deciding on admissions has been called an evil of private prejudice and discriminatory by Edward Blum, a legal activist whos brought multiple suits against universities, including Harvard, for what he sees as biased admissions policies. The Supreme Court has allowed institutions to consider race in hiring and admissions, as long as its in an organisations interest.
Diversity as the reason for affirmative action is incredibly ahistorical.
Kimberly Reyes
Affirmative action was originally meant to counteract deeply ingrained prejudices. It has travelled somewhat of a distance from that idea, says Johns Hopkins Lieberman. It used to be a form of reparations and compensatory justice a form of payback for inequalities that exist because of the US history of slavery. It also counteracts programs like legacy admissions that work as affirmative action for White people.
Through the decades, however, its become part of a mushier push for diversity. Racial justice has been dropped in favour of a business case for diversity of thought and experiences, says Lieberman. Indeed, while research has confirmed the financial benefits of diverse teams, the profit motive hasnt changed the face of corporate America. Many companies still look for credentials Ivy League, Fortune 500 internships, for example that perpetuate the status quo.
A debate about quotas may just force corporate diversity programs to shape up. Maybe thinking about the issue as a matter of justice not just money will make a difference. Diversity as the reason for affirmative action is incredibly ahistorical, says Reyes, a Fulbright scholar whos written about affirmative action for the Atlantic. It was initially supposed to be about righting wrongs, or trying to balance something lopsided. Without quotas, how exactly do you change that?
Bloomberg Businessweek
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Quotas can help fix the glaring whiteness of America's C-suites - The Australian Financial Review
