Promote an Inclusive Economy
Declaration on Equity in Business
We understand how imperative it is for businesses to aggressively promote gender and racial equality. It is well documented that diverse companies show higher profitability and gender-balanced economies are consistently linked with peace and prosperity. Gender and racial equality, when measured by a combination of business, environment and social impact indicators, is a win-win for companies and their communities.
First, the pay gap between men and women continues unabated. In 2015, women earned, on average, 78 cents for every dollar earned by men. And this gap is greater for women of color: African-American women earn 64 cents, and Latina women 56 cents, for each dollar earned by white men. But however you look at it, the potential income losses are staggering: The pay gap could cost as much as $490 billion in annual income, according to one estimate from the National Partnership for Families and Women.
Meanwhile, women held only 14 percent of leadership positions in the Fortune 500 as of 2015. Only 24 corporations had female CEOs, and only one corporation was led by a woman of color. This, despite the fact that women of color will be the majority of women by 2050. Companies suffer as a result: a study by Catalyst found that, from 2004 to 2008, companies with more women board directors delivered higher returns on sales, invested capital, and equity.
Even as advocates in government, professional organizations, and the business community work to bring more women into the C-suite, the highest levels of corporate America severely lag in racial diversity and inclusion. Though numerous studies show that diversity and inclusion is good business, just over 4 percent of Fortune 500 CEOs are minorities, including African-Americans, Asians, and Latin-Americans. In 2015, only four Black CEOs lead America’s top companies, a percentage that has declined steadily since 2007 when there were a whopping seven.
A 2013 study of the Fortune 250, meanwhile, showed that minority groups were gaining more representation on corporate boards, but were still under-represented, with 13 percent total for both men and women of color. Yet studies going back as far as 1998 have found that companies with more women and minority directors delivered higher shareholder returns.
Eight public policy solutions have been identified to reach these goals:
- Require a 30% or better representation of women on the boards of public companies. (In Norway and France, 34% are current comparative figures.)
- Expand funding of federal Small Business Administration (SBA) and Small Business Innovation Research programs for women-and-minority-owned small businesses, and have the SBA to be more transparent and timely in requiring gender and racial data when awarding government contracts.
- Raise the goal for awarding government contracts to women-owned and small, disadvantaged businesses from the current 5% figure to 25%.
- Raise the goal of spending on federal prime contract dollars on ‘Historically Underutilized Business Zones’ from 3% to at least 15%.
- Require gender-blind hiring and promotion by all companies and institutions, and require disclosure of employee gender mix at each pay level.
- Hold federal agencies accountable for meeting legal inclusion requirements as set forth in the Dodd-Frank law. These guidelines require financial institutions and other entities that contract with federal agencies to support economic opportunities for women and minorities; provide fair wages; disclose business activities and workforce composition by gender and race.
- Implement federal and state legislation that addresses workplace issues such as pay equity, paid leave, and childcare; the lack of which disproportionately limits women and minorities from reaching financial independence and becoming industry leaders.
- Decrease the barriers to entrepreneurship for disadvantaged groups through mentorship programs, crowdfunding and expanded resources that coach individuals in loan applications, in order to improve success rates for traditional financing options.