MANY SPIRITS...

...ONE BROWN-FORMAN

DIVERSITY & INCLUSION STRATEGY 2030 GENDER & RACE EDITION CONTENTS 3 INTRODUCTION As a global organization, Brown-Forman has employees based in 42 countries, and markets its brands in more than 4 170 countries throughout the world. That means employees and consumers may experience Brown-Forman THE BUSINESS CASE and its products in countless ways – because the way an individual interprets and responds to our organization is highly influenced not only by their unique life circumstances, but the environment in which they live, 6 work, and play. STRATEGIC POSITION Unfortunately, this paper – and the research embedded within it – could not accurately represent the experiences of every Brown-Forman employee or stakeholder. In many cases we defaulted to using the most readily available 55 information that likewise reflected the experience of the STRATEGIC DIRECTION largest number of Brown-Forman employees: our U.S. salaried workforce. By leveraging this group, and

particularly its robust set of corresponding data, we were able to streamline and accelerate the strategic planning process. It is our hope that the U.S. analysis is reasonably 58 representative of many of our markets, especially our STRATEGIC PRIORITIES developed markets, and as such, can serve as a reliable proxy for our global employee population.

As a global strategy, this document will be used to guide the company’s decisions and thinking at the highest level. 65 However, we recognize that additional work is needed to customize the content to ensure it is truly applicable to all APPENDIX Brown-Forman’s employees around the world. In the coming months, we anticipate producing similar documents for non-U.S. populations and countries, including preparing similar analyses of in-country employees using in-country external data. The Office of Diversity & Inclusion, People Strategy & Analytics, and HR Business Partners will be valuable resources for this work, and look forward to providing ongoing support.

We also recognize that diversity takes many forms, and trying to effectively tackle each aspect of diversity and inclusion in one document would be cumbersome and overwhelming. As such, we made a conscious decision to focus heavily on gender (globally) and race (specifically in MANY SPIRITS, ONE BROWN-FORMAN the U.S.) with this first edition of the strategy and its ONE STRATEGY, MANY COUNTRIES accompanying ambitions. Future editions will expand this work to other elements of diversity.

1 | MANY SPIRITS, ONE BROWN-FORMAN D&I @ B-F: A GLOSSARY OF TERMS

In the world of diversity and inclusion, there are a multitude of terms used to describe diverse populations. These terms differ by geographic location, legal requirements, and ever-changing trends and preferences. For the purpose of this strategy, and conversations within Brown-Forman going forward, the company will use the nomenclature provided below, which is consistent with the terms used by the U.S. Equal Employment Opportunity Commission (EEOC), the federal agency that administers and enforces civil rights laws against workplace discrimination.

Recognizing that it is difficult, or even impossible, to pick a term that addresses the preferences of all Brown-Forman employees, the following terms will be used with only the utmost respect and intentions:

Any person having origins in the Far East, Southeast Asia, India, or the ASIAN Pacific Islands. This includes individuals from China, Korea, the Philippine Islands, and Samoa. The term Pacific Islanders is sometimes used to describe a subsegment of this group.

Any individual with origins in any of the black racial groups of Africa. BLACK Within the U.S., these individuals are also often called African Americans.

A person of Mexican, Puerto Rican, Cuban, Central or South American, or HISPANIC other Spanish culture or origin, regardless of race. Other terms used to describe this population also include the gender-specific Latinos and Latinas, as well as the increasingly popular gender-neutral LatinX.

A person that identifies as lesbian, gay, bisexual, transgender, LGBTQI+ queer/questioning, or intersex. The plus sign (+) acknowledges that there are other terms used to describe individuals in this community (such as nonbinary and intersex).

People of Color. A term commonly used in the U.S. to describe a group of POC individuals comprised of Black, Asian, Hispanic, and people comprised of two or more races. Within the U.K., the terms BAME (Black, Asian, Minority Ethnic) and BME (Black Minority Ethnic) are sometimes used to describe this group. These terms are increasingly controversial, so wherever possible Brown-Forman will use specific references to the identifying race and ethnic groups. WHITE An individual with origins in Europe, North Africa, or the Middle East.

Note: In some instances, this document may contain slight variations to account for the terminology used in source material.

D&I STRATEGY 2030 - GENDER & RACE EDITION | 2 INTRODUCTION

DEAR BROWN-FORMAN COLLEAGUES:

As we look to our 2030 strategic ambitions, we are pleased to introduce Many Spirits, One Brown-Forman: Diversity & Inclusion Strategy 2030 – Gender & Race Edition.

The strategy adopts Brown-Forman’s strategic construct...

Strategic Position: Where We Are Today Strategic Direction: Where We Are Going Strategic Priorities: How We Will Get There

...to create a foundation from which to build a more diverse workforce and inclusive culture.

Thank you to our global Brown-Forman colleagues for your support of this strategy, and the work you’ve done in this space over the last decade.

Because of your courageous efforts, we are starting from a position of strength. Because of your high expectations, we are focused on building our next generation company and workforce. Because of our collective abilities, we are confident that Brown-Forman will realize the true value of diversity and inclusion and create a stronger, more competitive organization where each individual has the opportunity to reach their desired potential.

WE ARE MANY SPIRITS, BUT WE ARE ONE BROWN-FORMAN.

Respectfully,

Ralph de Chabert SVP, Chief Diversity, Inclusion, and Global Community Relations Officer

Kirsten Hawley SVP, Chief Human Resources and Corporate Communications Officer

Chris Graven VP, Director, Global Talent Management

3 | MANY SPIRITS, ONE BROWN-FORMAN THE BUSINESS CASE

IT'S IN THE NUMBERS

It’s hard to ignore the numbers.

Companies with inclusive cultures are six times more THE BUSINESS IMPACT likely to be innovative, six times STUDIES REPEATEDLY SHOW VALUE more likely to anticipate OF DIVERSITY & INCLUSION EFFORTS changes and respond ON CORPORATE PROFITABILITY effectively, and twice as likely to exceed financial targets. Organizations with the highest 6X 9% 19% 2X More Likely Increase Increase in levels of gender diversity on More Likely to be in EBIT Innovation to Exceed their executive teams are 21% Innovative Revenue Financial more likely to outperform their Targets industry on profitability and 27% more likely to have superior 27% 33% 6X 21% value creation. If the executive More Likely More Likely to More Likely to More Likely team ranked among the best for to Have Experience Anticipate to Outperform ethnic and cultural diversity, Superior Industry- Change & Industry on the numbers are even more Value Leading Respond Profitability Creation impressive, with organizations Profitability Effectively 33% more likely to experience industry-leading profitability. Finally, companies with above- While many organizations may have initiated diversity and inclusion average diversity (across six (D&I) efforts because it was “the right thing to do,” it is becoming dimensions, including increasingly clear that diverse workforces and inclusive cultures are migration, industry, career equally valuable from a business standpoint. McKinsey & Company, a path, gender, education, and leading worldwide consulting firm, found that “awareness of the age) have increases of 19% in business case for inclusion and diversity is on the rise. While social innovation revenue and 9% in justice typically is the initial impetus behind these efforts, companies EBIT (Earnings Before Interest have increasingly begun to regard inclusion and diversity as a source and Taxes) margins, on average. of competitive advantage, and specifically as a key enabler of growth.” While it is, of course, impossible for these studies to prove Yet, only 13% of organizations have taken the critical step in causation, the continued calculating the positive impact of gender diversity on the business. correlation over multiple research studies and numerous We did, for various aspects of diversity, and once again: It’s hard to companies cannot be ignored. ignore the numbers.

D&I STRATEGY 2030 - GENDER & RACE EDITION | 4 Let’s take a recent study from Harvard Business Review and The following strategy will compare it to Brown-Forman’s business. The study found that an guide the company on the next organization could increase its innovation revenue by increasing stage of its D&I journey. By the diversity of its management team, with additional additive better understanding the increases for having workforces with diversity of national origin, environment in which we work, industry experience, gender, and career path. and our positioning within it, we can ensure that we have If we took the study’s logic and applied it to the entire value chain initiatives in place to realize the of Jack Daniel’s Family of Brands, the impact is considerable. true value of D&I for our people, our brands, our business, and our global community.

Through it all, we won’t ignore By enhancing the diversity of the numbers. They hold us accountable. They highlight Jack Daniel’s global team, success (or failure). They build the business case. Brown-Forman could experience a But in the end, they aren’t really revenue increase equivalent to that what matters. It all comes down of its premium American whiskey to our people and our ability to bring Many Spirits together for portfolio. One Brown-Forman.

It is only when diverse perspectives are included, respected, and valued that we can start to get a full picture of the world, who we serve, what they need, and how to successfully meet people where they are. – Brené Brown, Dare to Lead

5 | MANY SPIRITS, ONE BROWN-FORMAN STRATEGIC POSITION

WHERE WE ARE TODAY

Every strategic framework must which they operate. There is no in place to ensure companies begin with a comprehensive part of a business that is free are embracing equality. assessment of the current from legislative impact, and Norway was the first country strategic position. To assess D&I is no exception. In recent to institute a gender quota, Brown-Forman’s strategic years, more and more passing a law in 2003 that positioning related to D&I, we countries are introducing required at least 40% of public legislation that seeks to create limited company board examined two areas: the global a more equitable experience members to be women by 2008. trends impacting for all individuals. For Eventually other countries set Brown-Forman, and an internal example, there has been an similar quotas, ranging from assessment of Brown-Forman’s increase in countries 30% to 40%, including France, D&I strengths, weaknesses, introducing legislation that Belgium, Germany, Italy, the opportunities, and threats. would permit same-sex Netherlands, and Spain.

marriages. In 2016, Taiwanese Australia passed the Workplace President Tsai Ing-wen Gender Equality Act 2012, TRENDS campaigned on the promise of replacing the Equal marriage equality, and in May Opportunity for Women in the There are many workforce, 2019, the Taiwanese Workplace Act 1999, to cultural, economic, and government became the first improve and promote equality political trends impacting D&I. Asian country to legalize for both genders. The Act However, there are seven same-sex marriage. While requires non-public sector influential trends that are most many countries are making employers with more than 100 critical to Brown-Forman and gains in this area, there is still employees to provide reporting its D&I initiatives over the next a great deal of progress to be on gender equality indicators 10 years. While the trends will made. Within the U.S. alone, such as gender composition, highlight what is happening there are 26 states, pay rates, and availability of around the world, how representing 44% of the U.S. flexible work arrangements. In Brown-Forman responds is up LGBTQI+ population, that do 2019, European Union (EU) to the company. not have laws with explicit institutions approved a ten-day

prohibitions for minimum paternity leave for

POLITICAL TENSIONS MAY discrimination based on sexual all EU countries, designing it as

1 CAUSE SETBACKS DESPITE orientation or gender identity, a non-continuous leave to

RECENT LEGISLATIVE GAINS including Kentucky, the increase flexibility for fathers.

location of Brown-Forman’s The U.S. is also seeing Global organizations must stay corporate headquarters. increasing momentum with in tune to the ever-changing legislation, including banning laws, regulations, and political At the same time, some employers from requesting the climate of all the countries in countries are putting controls salary history of job candidates

D&I STRATEGY 2030 - GENDER & RACE EDITION | 6 to help close the wage gap for leading to escalating tensions CONSUMERS ARE BECOMING women and underrepresented in the workplace and diversity 2 INCREASINGLY DIVERSE groups. As of May 2019, a total dilemmas in organizations.” of 16 states and 14 local The U.S. is not alone. A 2018 D&I initiatives, particularly governments had enacted survey from the BBC, with when it comes to achieving legislation putting restrictions 19,400 respondents across 27 equal representation of talent, on this practice. countries, found that 76% of are highly influenced by the people globally believe their composition and trends of the Despite this progress, the country is divided, with 59% of population in the countries in current political climate in the belief that it is more which they operate. At the many countries has created a divided today than it was just a same time, it is equally divisive environment that has decade ago. important for organizations to the potential to stall or reverse understand and mirror the these gains. Employers, therefore, are mindsets, preferences, and grappling with the challenges behaviors of all consumers so According to a report by the of when to speak up and that they can properly market European Network Against address the issues happening their products to an Racism, ethnic and religious outside their walls, and when ever-changing consumer base. minorities and migrants to remain silent. As employees continue to struggle against demand more from their The population within the U.S. racial discrimination in the employers (see Trend 5 on page will continue to evolve in the workplace, including wage 16), the growing geopolitical coming years, with anticipated disparities, racist workplace tensions in society are finding changes in race/ethnicity incidents, job insecurity, and their way inside the walls of composition occurring despite poor working conditions. The organizations around the an overall slowdown in report found that European world. population growth. women of color are disproportionately affected, as they face discrimination associated with their race, gender, and class. U.S. POPULATION PROJECTIONS BY RACE/ETHNICITY Chris Stulpin with Design Intelligence, a business DIVERSE POPULATIONS WILL CONTINUE TO GROW IN consulting firm, describes the SIZE OVER THE NEXT 40 YEARS situation in the U.S., for example, as “a nation divided 6% against itself, where after 9% years of conversation about the 13% need for true equality and the 44% 15% importance of inclusion, we 61% 18% still fail to provide real and 18% meaningful opportunity to 28% entire groups of people.” He goes on to explain how the 2% 4% country has reached a “new political era where employees 2020 2060 feel emboldened to express White Asian Black Hispanic Other exclusionary views about different demographic groups Source: United States Census Bureau

7 | MANY SPIRITS, ONE BROWN-FORMAN U.S. population projections “With 92% of the population 9% of bourbon drinkers – yet, show a decrease in Whites growth in the U.S. over the past Nielsen research found them to from 61% of the total 15 years coming from ethnic be the most likely demographic population in 2020 to 44% in minorities, it's important for to prefer spirits over beer or 2060, while Hispanics content creators, media wine. To increase these increase from 18% to 28%, platforms, manufacturers, numbers, bourbon brands may Blacks grow from 13% to 15%, retailers and marketers to adopt inclusive marketing and Asians increase from 6% understand their future practices, which endeavor to to 9%. success depends on their appreciate and understand ability to appeal and market to individuals' various identities, The percentage of the U.S. a multicultural world,” said differences, and histories while population born outside the Andrew McCaskill, former SVP, also illuminating places of country is also expected to Global Communications & commonality. increase during this time Multicultural Marketing for period. Foreign-born Nielsen, the information, data, This means brands must have individuals are projected to and measurement company. both breadth and depth to their make up 15% of the U.S. multicultural marketing, no population in 2030 and grow This understanding could longer relying solely on to 17% by 2060. This is a prove highly valuable for the traditional multicultural considerable increase from spirits market, and bourbon in marketing practices, which the historic low of 5% in 1970 particular. Blacks, for example, created separate campaigns and even from 2010 when it represent 13% of the U.S. targeted at diverse consumers. was 11%. population, but comprise only Instead, they are best suited to

We believe that through diversity, we’ll make better decisions. And by better understanding each other, we’ll better understand our consumers. – Owsley Brown II, Brown-Forman CEO, 1993-2005, and Chairman, 1995-2007

D&I STRATEGY 2030 - GENDER & RACE EDITION | 8 actively include multicultural with a household income over consumers in the entire $100,000 (compared to 41% of strategic process from married opposite-sex couples). opportunity assessment to insight development to Finally, from a generational BUYING POWER execution, ultimately resulting perspective, U.S. Millennials, ESTIMATED POWER OF in products and campaigns led whose spending power DIVERSE GROUPS by the best cultural insights. surpassed that of U.S. Baby Boomers in 2018, are expected Another aspect of marketing to to spend a total of $1.4 trillion diverse populations is in 2020. They are also using understanding the purchasing their purchasing power to buy $40 patterns of consumers, and the from companies and brands that purchasing power of specific fit their values. In 2017, a Weber TRILLION market segments. Women, in Shandwick and KRC Research Global Women particular, control an estimated study found that more than half $40 trillion in worldwide of Millennials are more likely to spending, accounting for 85% buy from a company with a CEO $3.8 of all consumer purchases in who has publicly supported an TRILLION 2018. This is a marked increase issue they care about. Yet, as U.S. Asians, from 2013, when they controlled noted in Trend 5 on page 16, Blacks, & Hispanics $29 trillion, or 64%, of consumer belief-driven purchases are not spending worldwide. Even more, necessarily a phenomenon that it is estimated that advancing is isolated to Millennials, a women’s equality could increase generation fueling many of the $1.4 the global GDP by 31% by 2025, shifts happening across society TRILLION a figure equal to the combined and business. U.S. Millennials GDP of the U.S. and China. The rise in buying power is The buying power of other fueled in part by increases in 45% diverse groups is also education levels. Harvard OF >$100K increasing, especially within Business Review found that INCOMES the U.S. The buying power of women now make up more than Same-Sex Couples Asians increased by 68% between 50% of university graduates in 2010-2018 to $1 trillion and for countries around the world, and Hispanics by 51% to $1.5 trillion. earn the majority of master’s Also rising is the buying power and doctoral degrees in the U.S. create one overarching of Blacks, noted at $1.3 trillion Also within the U.S., the number strategy that embraces the in 2018. In comparison, all but of bachelor’s degrees awarded total market (i.e. diverse 16 countries have annual to Hispanics has more than audiences) while continuing GDP of less than $1 trillion. doubled over the ten-year period multicultural programming from 2004-2014. Degrees to attract and connect with In 2015, LGBTQI+ Americans awarded also increased for Black consumers. Inclusive had a buying power of nearly $1 students (by 46%), Asian/Pacific marketing takes a trillion, almost equal to that of Islander students (by 43%), cross-cultural approach and Asian Americans. In fact, same- and White students (by 19%) diversifies everything in the sex couples have a higher median over the course of the same marketing process from income than opposite-sex time period. insights to execution. The couples, with same-sex couples gold standard approach is to accounting for 45% of all couples With the increase in education,

9 | MANY SPIRITS, ONE BROWN-FORMAN more and more diverse geographies, as individuals in individuals will be added to the one country may experience corporate talent pool, or the social, political, and economic collection of individuals who events that are unlike their are qualified and able to fill an peers in other locations. With MILLENNIAL open position. The talent pool this in mind, it is important to is a more reliable baseline for note that Western generational VIEWS ON D&I diverse talent than the general models, which are used in this Deloitte study found that population, as not all document given Millennials' views differ individuals are interested in Brown-Forman’s workforce from other generations employment opportunities or composition, may not be capable of meeting the entirely applicable to a global educational and professional workforce. All statements job requirements (see more in henceforth must be tested Trend 4 on page 13). within local markets for 35% accuracy. As society becomes more More likely to focus diverse, organizations must For the purposes of this on unique continually adjust and monitor discussion, however, the experiences their marketing and talent workforce consists of management practices to individuals from five ensure they mirror the diverse generations, including 32% consumers and candidates Traditionalists (1900-1945), they’re trying so hard to reach. Baby Boomers (1946-1964), More likely to focus on Generation X (1965-1980), respecting identities Millennials (1981-1997), and when defining diversity THE WORKFORCE IS Generation Z (1998 forward). 3 COMPRISED OF MORE Millennials have surpassed GENERATIONS THAN EVER Generation X as the largest BEFORE, EACH WITH ITS demographic of the U.S. 71% OWN VIEW OF D&I workforce, and are projected to More likely to focus on make up 75% of the global teamwork when asked A generation is defined as “a working population by 2025. about the business group of people born around impact of diversity the same time and raised With each generation, around the same place, with preferences, beliefs, similar influences. This affects experiences, ideals, and the way we look at the world expectations shift. This means their own expectations, rather around us, our responses, and employers must evaluate their than that of their employee expectations. [It is] a tool employee value proposition in base. It also means that beliefs through which you can deduce order to attract and retain regarding D&I may vary very powerful clues to begin employees of all generations, significantly across a single connecting with and and build a D&I strategy that workforce. influencing people of different includes age among its ages.” definitions of diversity These differences are evident, (alongside race, gender, veteran for example, when you consider Based on this definition, it’s status, etc.). There is a risk perceptions of public policy not surprising that when the majority generation issues facing the LGBTQI+ generational models do not in leadership is developing community, where Millennials necessarily transcend programs and policies around and Generation Z are at the

D&I STRATEGY 2030 - GENDER & RACE EDITION | 10 forefront of shifting opinions. Generation X and 33% of most desirable employers on A March 2019 article in Harvard Boomers. They are also more Glassdoor, a website for current Business Review found that 67% likely to be actively engaged and former employees to of U.S. young adults do not with their organization when it anonymously review companies believe a small business owner fosters an inclusive culture and their management. can refuse to provide service to (with engagement at 83% LGBTQI+ customers on the basis compared to 60% when an According to the 2018 Deloitte of religious reasons, compared inclusive culture is not Millennial Survey, Millennials to only 53% of U.S. senior fostered). and Generation Z employees do citizens/mature generation not have faith in business (and 60% of all Americans). It remains to be seen how leaders’ commitment to Generation Z, which is still only creating an inclusive culture. Even the way generations a small percentage of the The survey found that “roughly define D&I is different. workforce, will view D&I. It is two-thirds of respondents from Boomers and Generation X look highly likely, however, “since both generations not only at diversity as a moral and legal diversity is the norm for Gen Z, believe leaders simply pay “lip imperative that is the right [that] it’s not a value that they service” to diversity and thing to do for reasons related particularly celebrate or even inclusion, they also believe to fairness, representation, and think a whole lot about.” It is that only formal legislation can assimilation. Millennials, on simply something they expect. adequately advance workplace the other hand, are more in A 2016 EY study of Gen Zers diversity.” tune to the value that increased employed full-time in Brazil, collaboration and different China, Germany, India, Japan, Diverse leadership teams are perspectives offer a business. Mexico, the U.K., and the U.S. viewed by Millennials to be found that respondents most more successful, more With Millennials so attuned to value employers that provide motivating, and more D&I, it’s not surprising that equal opportunity for pay and stimulating. The Deloitte they are the most likely promotion, as well as survey found that 78% of generation to consider it an development and advancement Millennials who describe their important factor when opportunities. They have executive team as diverse also contemplating a job identified Apple, Google, report strong profits, a opportunity. Forty-seven Microsoft, Morgan Stanley, 13-point increase over those percent of Millennials factor Facebook, In-N-Out Burger, with leadership teams unlike D&I into their employment StudySoup, Costco, Nike, and the diverse society they decisions compared to 37% of Nordstrom as the top ten support. Though Boomers and

11 | MANY SPIRITS, ONE BROWN-FORMAN Generation Xers still has escalated rapidly. In fact, with their employer for 13 outnumber Millennials at the war for diverse talent may months or more in 2016, Brown-Forman, in many represent the single greatest compared to 60% of Gen Xers organizations, Millennials are challenge to an organization’s in 2000. Regardless if it’s a already among the leadership ability to attract and retain a generational trend, or a ranks, holding approximately diverse workforce. difference in life stage, the 20% of all leadership positions simple fact remains: the in 2017. The People 2025 Strategy average tenure for workers published by Brown-Forman in decreases substantially in As the balance of generations August 2016 highlights the younger employees. The shift within the workforce, increasing competition for average tenure of 10.1 years for organizations must ensure they talent in all sectors of the employees aged 55-64, to 7.6 can build (or maintain) a workforce as the labor supply years for ages 45-54 and culture and employee value continues to tighten and global 4.9 years for ages 35-44, to proposition that attracts and trends indicate a decade-long finally only 2.8 years of service retains talent with talent shortage. Among the most for employees aged 25-34. backgrounds and beliefs as significant trends is the change diverse as they are. in workforce composition, with As McKinsey pointed out in a retiring Boomers being replaced 2017 article, “everything THE WAR FOR TALENT with smaller (Gen X) or less- suggests that the war for talent 4 INTENSIFIES WHEN experienced (Millennials) will rage on. ‘Failure to attract ATTRACTING & RETAINING generations who are unable to and retain top talent’ was the DIVERSE TALENT meet the demand for executive- number one issue in the level talent. In addition, Conference Board’s 2016 In today’s economic climate, Millennials are more likely to survey of global CEOs, before with some of the lowest switch jobs, a 2016 Gallup poll economic growth and unemployment rates in nearly found 60% of the generation is competitive intensity.” The 50 years, the war for talent is open to new job opportunities article went on to share that real – and it’s magnified (the highest of any generation). “employers in Europe and exponentially when it comes However, this may be a factor North America will require 16 to diverse talent. As companies of their age, not necessarily to 18 million more college- have begun to recognize the their generation. A Pew educated workers in 2020 than significant value a diverse Research study compared are going to be available. workforce can create, the Millennials to Gen X and found Companies may not be able to demand for diverse talent that 63% of Millennials stayed fill one in ten roles they need,

D&I STRATEGY 2030 - GENDER & RACE EDITION | 12 much less fill them with top responsibilities, including child and eldercare. Research and/or diverse talent.” consistently shows that working women continue to bear the burden of household and dependent care responsibilities, in The global talent shortage is addition to carrying the “mental load” associated with each. further exacerbated when you consider a diverse talent pool, specifically women (at the manager level and above) and People of Color (POC). According to LinkedIn’s 2019 Gender

The talent pool for the U.S. Insights Report, 71% of talent market was 56% male and 44% professionals have identified gender female in 2018. During the same period, from an ethnicity parity as a top priority for their standpoint, it was 82% White, company. 10% Hispanic, 8% Black, and 7% Asian. (Note: Percentages are rounded to the nearest whole number and do not equal 100%. U.S. policy defines “Hispanic” as an ethnicity, not a race, therefore Hispanics may be U.S. TALENT POOL classified as White and/or 2018 U.S. BUREAU OF LABOR STATISTICS Hispanic.) The below figures represent the U.S. talent pool, or The talent pool also shifts by individuals who are qualified and able to fill professional career level, as the percentage roles. Additional references to talent pools are estimates of diverse talent will vary at based on additional, supporting data each management level within an organization. This is particularly relevant for gender. Because women are graduating at a higher rate than men today, the talent pool for professional, entry-level 56% 44% positions is greater than 50%. Male Female However, women represent only about 35% of the senior GENDER leader talent pool. Over time, this number may increase as these younger women mature into senior leadership roles, 82% 10% though it may never reach White Hispanic equal representation if organizations don't adjust their culture, processes, and policies 8% 7% to adequately accommodate Black ETHNICITY* Asian the challenges women face in *Percentages are rounded to the nearest whole number and do not equal 100%. U.S. policy effectively integrating defines “Hispanic” as an ethnicity, not a race, therefore Hispanics may be classified as professional and personal White and/or Hispanic

13 | MANY SPIRITS, ONE BROWN-FORMAN Many companies are publishing public statements and reports Bacardi has stated its goal of regarding their diversity objectives and progress; and while many having at least 45% women in start with gender, there is evidence that similar efforts are being its workforce by 2025. Pernod made for other diversity characteristics as well. Ricard, the world’s second largest wine and spirits Goldman-Sachs, a leading global investment banking, securities producer, announced on April and investment management firm, which operates in a field 3, 2019, as part of its Good largely dominated by White men, has committed to having 50% Times from a Good Place 2030 representation of women in its incoming analyst class by 2021, Sustainability and with Blacks representing 11% and Hispanics representing 14% of Responsibility Roadmap, that its analyst and entry-level positions. Moreover, they have stated its top management teams will that they’re looking for ways to increase representation among be gender balanced by 2022 (at LGBTQI+, disabled, and veteran communities. Diageo, the world’s the same time it ensures pay largest producer of spirits, publishes an annual Gender Pay Gap equity across the business). Report that provides significant transparency into its gender diversity metrics and progress. It has also made a public Similarly, other global commitment to having 35% of its senior leadership roles held by companies have announced women by 2020 and increasing the number to 40% by 2025. general statements regarding representation, yet do so without declaring formal target dates. Procter & Gamble (P&G) DEFINING INCLUSION issued a goal to achieve 50/50 representation in all parts of its company and Coca-Cola

in clu sion regularly publishes its gender __ e representation data while /in 'klooZH n/ emphasizing its focus on “increasing multicultural Noun. The action or state of including or of being included talent in mid- and senior-level within a group or structure. leadership roles.” synonyms: incorporation, addition, encompassing While these bold, blanket statements sound impressive and are highly motivating, Inclusion, like health and happiness, when you dig a little deeper is not something that you arrive at into P&G’s activities, you can one day and say, 'We’re done!' It’s see that they are taking a something that you work at every day, pragmatic, multi-year approach a process. Inclusion happens when to increasing representation. your recruiting process casts a wider Its “Staff to Win” strategy is net for qualified candidates. It focused on building a pipeline happens when you give credit to of diverse talent and its 2020 people for their ideas and goals are described as “sales contributions...Inclusion happens goals, to accelerate progress in when people in power use that power gender balance at all levels. to bring people in rather than keep This includes yearly targets; a people out. talent pipeline with focus on – AMBER BALDET high potential candidates; holistic plans based on retirement outlook, historical

D&I STRATEGY 2030 - GENDER & RACE EDITION | 14 attrition and projections; and Millennial/Generation Z including Brown-Forman – names/potential promotion workforces, by adding new must properly balance timing for [its] global talent benefits or perks to their total premium benefit design with pool.” rewards portfolio. For many the need for financial employers, this includes stewardship and cultural This global competition for expanding their parental leave relevance. diverse talent means that policies to allow both women employers that want to attract and men, who are expressing As employers build their and retain highly skilled, an increased desire to play a employer brands they should diverse talent must work more active role in family life, always keep current and harder and smarter to find the more time to adjust to life with potential employees at the talent, get them in the door, a new child. Among some of center. As Jim McCoy, Vice and then keep them engaged the most unique benefits President and Global Practice and committed (i.e. included) offerings recently trending Leader for ManpowerGroup when other employers try to include student loan repayment Solutions said, “Candidates lure them away. programs, “fur”-ternity and want to be aligned with pet bereavement leave, organizations they feel good In addition to robust D&I reproductive egg freezing, paid about. Their personal brand is programs that impact the travel, game breaks, and breast tied to the employer they culture and employee milk shipping. While paying work for. Candidates, like experience, employers are careful attention to these consumers, are now voting also looking to attract diverse trends and employee with their talents, as well as talent, and the preferences, employers – their wallets.”

No one of us is as smart as all of us. – Brown-Forman company lore often credits this quote to W.L. Lyons Brown, Sr. who was said to have a plaque with this inscription on his desk

15 | MANY SPIRITS, ONE BROWN-FORMAN EMPLOYEES & across eight markets including 5 CONSUMERS ARE DRIVING Brazil, China, France, Germany, “Social CHANGE THROUGH India, Japan, the U.K., and the activists. INCREASED EXPECTATIONS U.S., also found that 67% of belief-driven buyers bought a Environmental There is increasing pressure brand for the first time for organizations, and because of its position on a activists. therefore employers, across the controversial issue and 65% world to take a stand on social will not buy a brand that stays Consumer and political issues. The recent silent on an issue. activists. rise in consumer activism – catapulted to the mainstream This phenomenon was evident Activist in large part by social media when Nike, the U.S.-based movements, such as #MeToo multinational athletic shareholders. and Black Lives Matter – has footwear, apparel, and Today, there is created an environment where accessories company, created consumers expect companies advertising featuring Colin no shortage of to publicly address issues they Kaepernick, the controversial have previously avoided, from former NFL quarterback who activists sexual harassment and gender first kneeled in 2016 during discrimination to racial the U.S. national anthem in affecting injustice and immigration. protest against racial injustice business and police brutality. The ad, While companies may have which ran as part of Nike’s operations in shied away from controversial 30th anniversary celebration in issues in the past, it is 2018, resulted in a 30% some way. becoming increasingly increase in sales and a spike in difficult to do so. Recent social media posts nearly 50 These stand-up- research suggests that times Nike’s average rate. for-what- consumers are starting to “speak with their pocketbooks” These belief-driven buyers are is-right and spend their money on the not confined to one market, brands and companies that one generation, or one income campaigners align with their own values and level – consumers across all may either be beliefs. In 2018, Edelman, one markets, generations, and of the world’s most respected income levels are buying an employer’s communications firms, brands that align with their published the Edelman Earned beliefs. The challenge for best advocates Brand Study that found “nearly organizations and brands, two-thirds of consumers however, is determining what or its worst around the world now buy on issues are most important to opponents. In belief, a remarkable increase of their core target audience, 13 points since 2017. These since beliefs themselves may either case, ‘belief-driven buyers’ will differ dramatically. When you choose, switch, avoid, or take a position on an issue, it they are change boycott a brand based on where stands to reason that you are agents.” it stands on the political or just as likely to gain favor with social issues they care buyers as you are to alienate about.” The study, which those that fall on the opposite – Weber Shandwick surveyed 8,000 respondents end of the belief spectrum.

D&I STRATEGY 2030 - GENDER & RACE EDITION | 16 In Nike’s case, it understood its (at 57%), business (at 56%), and core target audience, which the media (at 47%). skews disproportionately younger and more liberal. This trust is granted with the According to Entrepreneur expectation that the employer- magazine, “Surveys show that employee relationship is built younger, liberal audiences on more than just traditional EDELMAN prefer companies to take a components like job TRUST stance on important issues...so opportunities. In fact, 67% of BAROMETER the brand had good reason to the responding employees believe that a bold, politically- expected “prospective The 2019 study found minded ad would ultimately employers will join them in that employees place have a positive impact on its taking action on societal issues” significant trust in core audience.” When featuring and 71% believe it’s “critically their employer, and Kaepernick, Nike was speaking important for ‘my CEO’ to have high to its core long-term consumer, respond to challenging times.” expectations rather than a vocal, but less This expectation is consistent valuable, secondary consumer. with the general population, with 75% looking to CEOs to Interestingly, another study lead change versus waiting for from Edelman highlights how the government to take action. 75% these changing consumer expectations may impact The potential rewards for Trust their employer organizations from an employer building trust are significant. to do what is right perspective. The 2019 Edelman Employees who have strong Trust Barometer, the trust in their employers report company’s 19th annual trust higher levels of engagement, and credibility survey that loyalty, advocacy, and 71% captured the sentiments of commitment. So, similar to the Believe it's critically 33,000 respondents in 27 consumer perspective, important for their markets, found that “trust has organizations must determine CEO to respond to changed profoundly in the past what issues are important to challenging times year” with 75% of global their employees, and find the respondents trusting their best way to address them in a employer to do what is right over way that builds trust, creates 67% nongovernmental organizations engagement, and drives growth. Expect employers will join them in “We are committed to creating a fully inclusive and taking action on diverse workforce and we strongly believe that societal issues businesses play a significant role in shaping the future of society. Global businesses like Diageo must make bold moves on policies and the environments in which their employees work to ensure that the progress 47% people deserve happens.” Trust the media to – Mairéad Nayager, Diageo’s Chief HR Officer explaining the do what is right company’s global roll-out of a 26-week parental leave policy as part of its goal to create an inclusive, diverse workforce

17 | MANY SPIRITS, ONE BROWN-FORMAN TECHNOLOGY IS than 12 million posts, While much of the impact of 6 ACCELERATING D&I comments, and likes. The #MeToo was played out in the CONVERSATIONS, WHILE hashtag even transcended media headlines, it impacted SUPPORTING TALENT cultures and countries, the corporate boardrooms as MANAGEMENT becoming #YoTambien in well. According to the U.S. PRACTICES THAT Spain, #BalanceTonPorc in Equal Employment ADVANCE D&I OBJECTIVES France, #WoYeShi in China, Opportunity Commission, #QuellaVoltaChe in Italy, claims of workplace sexual Just as technology has touched among others. As the harassment increased more almost every industry and movement continued over the than 12% in its 2018 fiscal year changed every human coming months, it would be and it recovered $70 million interaction and experience, it credited with the “fall” of some from corporations for victims has been a driving force of the world’s most well-known of sexual harassment (up from behind the recent acceleration businessmen, journalists, and $47.5 million the year prior). of D&I movements and celebrities, including Harvey conversations. Weinstein and Matt Lauer. Furthermore, employees can

The invention and explosion of social media, in particular, has changed the speed and manner in which people communicate, given a voice and platform to any individual with access to the internet, and ensured messages can reach people 24 hours a day, seven days a week, 365 days a year, all across the world. Placeholder:

The #MeToo movement, in particular, illustrates the Table: 2018 U.S. Bureau of Labor Statistics - power of social media and its Management, Business and Financial ability to create a global Operations Occupations phenomenon, raise awareness and advocacy, and drive change. The movement started with a single tweet from actress Alyssa Milano, who was inspired to take action by the experience of Tarana Burke, a civil rights activist. Milano used her social media presence to rally all victims of sexual harassment or assault through use of the hashtag #MeToo. According to Facebook, in the 24-hour period after Milano’s tweet, the hashtag was used by more than 4.7 million people worldwide and generated more

D&I STRATEGY 2030 - GENDER & RACE EDITION | 18 use social media platforms their margins, and grow the demands and needs of today’s (e.g. Facebook, Instagram, and business. As the Brown-Forman workforce and the workforce of Twitter) and technology to People 2025 strategy points the future. increase awareness for issues out, “digital disruption and of importance to them, social networking have ORGANIZATIONS & potentially creating a public changed the way organizations 7 INDIVIDUALS ARE MOVING relations and legal nightmare hire, manage, and support ALONG THE D&I CONTINUUM for the organizations they people.” AT DIFFERENT PACES IN target. Google employees, for DIFFERENT PLACES example, conducted a massive It goes on to say, “Data can international walkout in identify what attracts and While the business case for D&I November 2018 to boycott the retains employees, what drives has made it a key strategic company’s approach to sexual strong performance, which imperative for many harassment and general employees will be successful, organizations across the world, fairness with five demands what makes the best leaders, the reality is that many related to sexual misconduct, and what capabilities are organizations – and the pay equity, and the reporting required to deliver high-quality individuals within them and relationship of the chief customer service and the countries in which they diversity officer. innovation...Technology can operate – are at vastly different also help companies meet places on their D&I journey. Employees are using employee expectations for Even more, the continuum mainstream social media flexibility by simplifying looks different for each aspect channels while also leveraging remote work, facilitating of diversity. It is quite possible, platforms designed specifically collaboration of remote teams, and even highly likely, that to evaluate employers. and reducing costs.” This may individuals and organizations Glassdoor, for example, even include deploying tools sit at different places on the receives 64 million unique specifically designed to combat spectrum for one aspect of visitors per month. On any D&I obstacles, from the free diversity, say gender, while online platform, individuals GenderDecoder, a simple site being at a completely different are much more raw, more that identifies potentially place for another aspect, such honest, and more transparent biased language in job ads and as sexual orientation and in their beliefs and opinions job descriptions, to the more identity. Complicating this than in traditional face-to-face sophisticated Greenhouse, a reality further, the ideas, communications. In fact, our comprehensive talent concepts, mindsets, and society is becoming so acquisition platform with an experiences regarding accustomed to people, inclusion offering that reduces diversity characteristics are including political leaders, unconscious bias across the constantly shifting and speaking out in ways that were entire hiring process. This adjusting, thus making the previously considered taboo means that employers that journey a continuous, that many worry we will effectively leverage advances never-ending process. become desensitized to hateful, in technology may have a divisive rhetoric. competitive advantage in the Early adopters of D&I strategies war for talent. They will be were heavily focused on At the same time, however, better equipped to identify and diversity, or “the mix” of technology –and the massive build connections with diverse people in an organization. As amount of data it has talent, design people efforts evolved, the focus has generated – can help employers management capabilities that shifted to inclusion, or enhance their D&I efforts, grow strong, inclusive leaders, “making the mix work.” support their talent and provide a culture and Organizations have realized management practices, protect infrastructure that meets the that it isn't sufficient to get

19 | MANY SPIRITS, ONE BROWN-FORMAN diverse talent in the door, they growth won’t happen.” The first step is raising needed to focus on the awareness to the concept of employee experience. They To achieve inclusion objectives, privilege and doing so in a way must create an environment organizations must support that encourages healthy, open and culture where each employees in their individual dialogue. This is critical individual – regardless of journeys by creating the because “whenever a power gender, race, nationality, organizational structure, structure feels under threat, it sexual orientation, religion, or employee programs, and is likely to resist. History has any other diversity leadership tools that can move proven this repeatedly; characteristic – feels truly employees along the diversity advances in equal rights are valued, respected, and continuum. According to almost always met with a supported. Additionally, they Harvard Business Review, this pendulum swing of backlash.” are also aware of the means “today’s diversity importance of metrics and challenge isn’t getting more For example, Harvard Business accountability to ensure people to adapt to obsolete Review points out that “many progress towards inclusion norms of leadership...the white people avoid outcomes. As Harvard Business challenge is to get all managers conversations about race out Review stated, “without – and especially current of fear of ‘saying the wrong inclusion, however, the crucial leaders – skilled and ready to thing.’ And many POC in connections that attract lead vastly more diverse predominantly white diverse talent, encourage their businesses and respond to companies may avoid these participation, foster increasingly diverse customer conversations out of fear of innovation, and lead to business groups.” being seen as a complainer,

I think diversity is a hallmark of the last 20 to 25 years of Brown-Forman. And I expect it to be a foundation for the next 20 years too. – Paul Varga, Brown-Forman President and CEO, 2005 - 2018

D&I STRATEGY 2030 - GENDER & RACE EDITION | 20 or worse. But pretending the themselves and their Also important is recognizing elephant in the room isn’t colleagues. With an agile work that diversity isn’t confined to there won’t make it go away.” environment and six employee characteristics that are readily resource groups, we provide visible to the eye (such as race, One common element of many our employees with an gender), or common in D&I D&I strategies that helps to environment where they can conversations (such as sexual facilitate conversations is the thrive and succeed in.” orientation, gender identity or creation of employee resource expression, and/or veteran groups (also called ERGs, or While ERGs and other status). Equally important is affinity/business network employer efforts targeted at “cognitive diversity,” or the groups), or groups of D&I are a critical step in the differences in perspectives and employees who join together journey, change will also processing styles, and in their workplace based on require shifting the mindsets “neurodiversity,” or the shared characteristics or life of individuals to ensure lasting recognition that differences in experiences. These groups, impact will be realized. As neurological functioning which are traditionally started Michael Kimmel, a sociologist should be respected and independently by employees, at Stony Brook University who treated the same as any other serve as a venue for diverse specializes in gender studies, human differentiator. In fact, a talent to discuss career pointed out in his TED Talk number of organizations are development opportunities entitled Why Gender Equality already developing and challenges, build networks, is Good for Everyone, recruitment campaigns to hire create advocacy and “privilege is invisible to those neuro-diverse talent into awareness, and eventually who have it” and “making positions for which their skills drive true cultural change gender visible to men is the are particularly beneficial. Yet, within their organizations. In first step in engaging men to “to be successful, the addition, because ERGs are support gender equality.” The organization needs to make it open to everyone – not just same is true for race, for ‘safe’ for associates to try new those employees that belong to sexual orientation, for things in new ways without the particularly affinity group religion, for marital and fear of repercussions.” they support – they can veteran status, and every other increase cultural competency aspect of diversity that makes Organizations that want to across the organization. Nike, individuals unique. create inclusive cultures – and for example, has a collection of ultimately retain the diverse ERGs under the NikeUNITED Sometimes this even requires talent they are able to attract – brand that includes eight navigating environments must stay on the front lines of Employee Networks focusing where the laws of a country the diversity conversations on employees of various work against both the while ensuring they have the abilities, race, ethnicity, sexual organization’s D&I objectives strategy, structure, and orientation, veteran status, and personal values and processes in place to bring and gender. beliefs. This is the case for their leaders and employees LGBTQI+ rights, which is along on the journey. This emphasis on inclusion complicated by the fact that in through ERGs is also evident in some countries, including the diversity model of Pernod many in which Brown-Forman Ricard. The company’s website operates, it is illegal to be gay states, “We believe in or even talk about LGBTQI+ championing an inclusive topics. The spectrum is vast, culture that embraces from being punishable by differences and encourages death in some locations to employees to challenge marriage equality in others.

21 | MANY SPIRITS, ONE BROWN-FORMAN DEFINING & UNDERSTANDING INTERSECTIONALITY

Any discussion regarding D&I would be remiss if it didn’t address the concept of intersectionality and its impact on diverse talent and organizations.

Intersectionality is defined by the Oxford Dictionary as “the interconnected nature of social categorizations such as race, class, and gender, regarded as creating overlapping and interdependent systems of discrimination or disadvantage.” Said another way, intersectionality seeks to understand and describe the many prejudices individuals face as a result of their multiple, overlapping identities and experiences (including their race, class, gender identity, sexual orientation, religion, etc.). A Black woman, for example, cannot separate her identity as a female from her identity as a Black person – and as a result she is faced with a “complex conversion of oppression.” This is illustrated by the fact that for every dollar a White male earns, White females make $0.78 and Black males make $0.74, yet Black females make $0.64.

For organizations developing D&I strategies, intersectionality is a critical concept to keep in mind as it has “given many advocates a way to frame their circumstances and to fight for their visibility and inclusion.” While many of the topics within this document address D&I through the lens of one specific aspect of diversity (race, gender, and the like), the concept of intersectionality should be woven into all Brown-Forman’s D&I initiatives. To support that effort, the following offers some highlights into how the concept plays out across key groups and topics (though, admittedly, it doesn’t even scratch the surface of the potential implications for Brown-Forman and its employees):

Black women do not expect to be able to bring their best self to the workplace and simultaneously grow their careers. They may often attribute their lack of career growth to a lack of sponsorship, as they often find it challenging to find sponsors within an organization when they have difficulty connecting with and relating to those with whom they work.

In addition to the emotional and mental toll, biases can have a detrimental impact on the careers of Black women. For example, Black women leaders are subject to more criticism and punishment when making workplace mistakes, and their statements are least likely to be correctly attributed when made in a group setting (when compared to White men, Black men, and White women).

“Hispanic women experience an extension of inequities in both career and personal life when compared to women of other common U.S. cultures and when compared to men. Societal factors including education, cultural practices, and religious traditions can influence or even compromise the career objectives of high-achieving Hispanic women.”

The historically male-dominated Hispanic culture, often described as machismo, makes it especially hard for Hispanic women to fight oppression and cultural norms that expect them to “deny assertiveness, independence and self” while remaining “psychologically and economically dependent on their fathers, husbands and other males.”

LGBTQI+ employees of color are one of the most disadvantaged groups in America, with higher levels of unemployment and poverty. They also face emotional barriers given the prejudices against LGBTQI+ lifestyles in some corporations and a lack of representation of POC in business.

A study of Asian American women found six forms of discrimination that highlighted the intersection of race and gender (among seven other forms of discrimination). Asian women, in particular, experience discrimination that assumes they are: exotic, not a leader, submissive, cute and small, invisible, and service workers.

D&I STRATEGY 2030 - GENDER & RACE EDITION | 22 to assume the same is true for actions can be shared across SWOT executive leadership’s organizations via a unified commitment to D&I. As Harvard hub.” The CEOs from food and The traditional SWOT analysis Business Review points out, beverage companies such as is an invaluable tool to assess “culture change begins when Anheuser-Busch InBev, Brown-Forman’s strengths and leaders start to model the Coca-Cola, Diageo North weaknesses against the behavior they want the America, Papa John’s, and Yum! opportunities and threats in organization to emulate.” Brands have all taken the pledge. the world today and those anticipated over the next It is for this reason that there There are also leadership several years. are many D&I efforts targeted at organizations targeted at a CEOs and executive leadership specific element of diversity, STRENGTHS teams. One such initiative is the such as the Catalyst CEO CEO Action for Diversity and Champions for Change, a ELT & LEADERSHIP Inclusion, which promotes a group of more than 60 CEOs 1 COMMITMENT specific set of actions that can who have pledged to advance It is widely known and “cultivate a workplace where more women into all levels of accepted that executive diverse perspectives and leadership, and Out Leadership, leadership behavior, priorities, experiences are welcomed and which creates CEO events and and communications set respected, where employees feel tools to drive LGBTQI+ equality. expectations and standards for comfortable and encouraged to the organizations that they discuss D&I, and where best The Executive Leadership lead. As such, it’s not a stretch known – and unsuccessful – Team (ELT) at Brown-Forman is

ELT & Leadership Commitment B-F Culture Employee Resource Groups Leadership Looks Different Than the Workforce A Decade of Progress Workforce Looks Different Than Consumers Strong Partnership between HR & D&I Current Resources May Not Support Future Growth Pockets of Greatness Middle Managers Face Competing Priorities B-F Culture Inconsistent Accountability Prevents Meaningful Change STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS Enhance D&I Brand and Increase Communications Low Turnover/Slow Growth Limits Diversity Understand D&I Data & Metrics Potential for Business Decline Improve Individual, Leader, & Organizational Accountability Talent Acquisition Continue D&I Focus in Global Talent Acquisition War for Talent Focus on Inclusion Global Workforce is Difficult to Reach Increase Awareness & Education to Expand Thinking & Potential Consumer Backlash Against D&I Build Capabilities Objectives

23 | MANY SPIRITS, ONE BROWN-FORMAN highly committed to ensuring relationship with ELT members. This, in turn, may help with the the success of the company’s company’s gender representation, as women and POC historically D&I efforts. The structure and have less access to senior leaders compared to their male reporting relationships of the counterparts. According to McKinsey’s Women in the Workplace company’s Office of D&I, and 2018 study, this discrepancy could have a detrimental impact on its ERGs and Diversity women as “employees who interact regularly with senior leaders Councils, are among the many are more likely to ask for and receive promotions, stay at their ways this commitment is companies, and aspire to be leaders.” illustrated. The company’s Chief Diversity, Inclusion, and Brown-Forman is also fortunate to have a Board of Directors that Global Community Relations is fully committed to D&I, including a keen focus on recruiting Officer, reports directly to the diverse talent to serve on the Board. CEO, ensuring the senior-most executive leader at the company is guiding – and “D&I has become crucial to the ultimately held accountable for – the overall strategy and C-suite, as many leading organizations now success of Brown-Forman’s see diversity and inclusion as a comprehensive D&I initiatives. The company’s Global Diversity Council, which strategy woven into every aspect of the talent sponsored this strategy lifecycle in order to enhance employee document, includes four ELT engagement, improve brand, and drive members. Senior leadership is also represented on Diversity performance.” Councils throughout the - Deloitte organization, including the 26 councils led by a division or regional leader and supported by an adviser from the Office of D&I. Lastly, each ELT member participated in two cohorts of The Advocacy Program, serving as mentors to POC and engaging in in-depth learning on a variety of D&I related topics.

Finally, the company’s ERGs are all sponsored or co- sponsored by members of the ELT or other Executive Leaders. This allows all ERG members to see firsthand the ELT-level commitment and support of the issues that drive inclusion across the organization. In addition, it provides ERG co-leads and steering committee members with the opportunity to build close

D&I STRATEGY 2030 - GENDER & RACE EDITION | 24 EMPLOYEE 2 RESOURCE GROUPS

One of the most common elements of a D&I strategy is the formation of ERGs. In their ideal state, resource groups ESTABLISHING ERGS should support the company’s Since 2009, Brown-Forman has introduced efforts to attract and retain the nine ERGs with regional chapters on all six best talent, promote leadership continents where it has employees and development at all ranks, build an internal support system for workers within the company, and drive inclusion among employees at all levels. 2009 ERGs often have an external BYOD, COPA, GROW, SPLASH focus as well, helping ERGs established for LGBTQI+, Hispanic, Female, organizations to ensure their and Black employees brands are relevant to diverse 2010 consumers and their supplier BOOMERS networks are aligned with the Generational ERG established company’s overall diversity FIRST NON-U.S. ERG CHAPTER strategy. They are ultimately a First non-U.S. chapter established in Australia resource for the business, and with GROW as an editorial in Bloomberg 2011 SPIRIT, YP pointed out, “The grassroots B-F employees create an ERG respecting the elements of ERGs often lay the decision not to drink, and a new generational groundwork for global diversity ERG for younger employees and inclusion strategies.”

2013 Brown-Forman established its BRAVE ERGs in 2009 with the Veteran ERG established formation of four ERGs. As of 2014 Summer 2019, the company BOOMERS REBRANDS TO SAGE had added an additional five New name better supports ERG focus on all groups for a total of nine ERGs, B-F generations including those focused on BYOD REBRANDS TO PRIDE veterans (BRAVE), Blacks New name strengthens global understanding of (BUILD), Hispanics (COPA), ERG's focus on LGBTQI+ employees women (GROW), LGBTQI+ 2018 (PRIDE), experienced SPLASH REBRANDS TO BUILD professionals (SAGE), New name aligns with ERG mission and its focus individuals who choose to on employee growth and development 2019 refrain from drinking alcohol EAST (SPIRIT), and young ERG established for Asian employees professionals (YP). Its Asian ERG, EAST, launched in Summer 2019.

While the ERGs were originally

25 | MANY SPIRITS, ONE BROWN-FORMAN formed at the company's ERGs are also meaningful because of their ability to develop diverse Louisville headquarters, they talent and build members’ social networks, a critical advantage of now have regional chapters a relationship-based company such as Brown-Forman. GROW, for throughout the U.S. and have example, created the GROW Championship Program in 2014 in slowly spread across the globe. partnership with HR as a formal leadership development program By early 2019, more than half for highly valued female talent. In the years since, the program of the company’s ERGs had a graduated 39 women, including 14 in Mexico, and engaged an equal global presence. There are number of senior leaders to serve as advocates for program COPA chapters in Brazil and participants. Today, The Advocacy Program, a similar program for Mexico; GROW chapters in POC, has 27 graduates and 27 senior-leader advocates; Y-LEAD, a Mexico, Australia, and Europe; development program created by YP, has 23 graduates and PRIDE chapters in Australia, supporters; and the COPA Fostering Development Program has 24 Europe, and Mexico; SPIRIT graduates in its first two years. chapters in Mexico and Southeast Asia; SAGE in Mexico, and YP chapters in Mexico, Europe, Brazil, and the U.K. “You can’t underestimate the power of

Brown-Forman’s ERG network professional networks, because when they are is aligned with many of its positively focused, you no longer feel alone or competitors. Pernod Ricard has isolated. You are connected with people of six ERGs, including one that Brown-Forman does not – a power in the organization in a way you have parent-oriented group. Diageo never been before. Instead of always feeling only has four, including groups focused on women, Asian, like an outsider, you feel as if you belong. You Blacks, and LGBTQI+ employees. are not alone, and that can be tremendously Also notable is Nike, which helpful both personally and professionally.” has eight ERGs under its NikeUNITED umbrella. – Harvard Business Review As employee-driven groups, employee participation and support is critical to the success of an ERG. According Organizations have also leveraged their ERGs for support in to company records, 75% of developing new employee policies. Ford, as an example, leveraged Brown-Forman’s U.S. salaried its Parenting Network when creating new work/life policies, workforce is a member of one including adoption assistance and lactation policies. or more ERG. Outside of the Brown-Forman’s HR team used input from GROW for its new U.S., 21% of employees are flexible work policy, while conversations with YP prompted the members of one or more ERG. review that resulted in a new dress code policy. Similarly, a While the primary work of the collaboration with PRIDE helped ensure the company’s benefits ERGs is driven by a much fully support the needs of its LGBTQI+ employees. smaller percentage of the population, these high While much of an ERG’s work is internal, it can also be leveraged numbers may be interpreted for external-facing initiatives such as marketing and product as an endorsement by B-F innovation, ultimately contributing to business results. PepsiCo employees that they support added 1% to the corporate bottom line when it added products that the work and causes facing were supported by its affinity groups, including guacamole- their member ERGs. flavored Doritos and soft drinks targeted at Black consumers.

D&I STRATEGY 2030 - GENDER & RACE EDITION | 26 In FY20, Jack Daniel’s will with their commitment to full-time employees (see page launch a LGBTQI+ toolkit, fueled diversity and inclusion and 68 for org chart) and the inpart by a collaboration with corporate responsibility; which company’s D&I strategy and Brown-Forman’s PRIDE ERG. is important to me. Employees initiatives have grown The brand also engaged YP as an can get involved with employee significantly across its four internal focus group, or resource groups no matter strategic pillars: 1) workplace sounding board, for Jack where they work across the and workforce; 2) brands and Daniel’s Tennessee Honey ads world.” markets; 3) partners and and artwork targeted at vendors; and 4) communities. Millennials. In addition to the A DECADE OF PROGRESS external work ERGs engage in 3 The company’s Global Talent to support the brands, they also Acquisition team (GTA) has support the community pillar enhanced its processes to by volunteering on boards and Brown-Forman has made ensure that it is able to identify, supporting activities/initiatives considerable progress in its D&I attract, and hire diverse with local diverse agencies. journey over the last decade. candidates for open positions. This is a critical step, as “Hiring Brown-Forman’s success with The company began its and promotions are the two ERGs led it to be named to the exploration in the D&I space in biggest levers for changing the “Best Organizations for May 2005 when Brown-Forman representation of women Employee Resource Groups” in Spirits America created its first across the pipeline. Yet [most] 2012 by Upward Synergy, an informal diversity task forces companies are not hiring and organization that “synergize[s] focused on the female, Black, promoting women and men at the collective knowledge, best and Hispanic employee equal rates, especially at the practices, and passion of ERGs experience (which were later entry and manager levels,” across companies.” replaced by the current, formal according to McKinsey. ERG infrastructure). By More than the external November of the same year, Brown-Forman implemented accolades, perhaps the greatest the company convened its Targeted Selection® impact of the ERGs can be seen Inclusion and Diversity interviewing in 2008 and inside Brown-Forman. Coalition comprised of added its unconscious bias According to the 2016 Employee individuals nominated and module in 2016. According to Engagement + Enablement selected by senior leadership. DDI, the global leadership Survey, ERG participants were This group laid the foundation consulting firm that created it, slightly more engaged than the for future D&I strategies by “Targeted Selection is the most global salaried population working against a five-point accurate, widely used (with 85% engagement vs. 84% plan that would 1) create the behavioral interviewing system for the global salaried burning platform and define in the world. It provides a population – both incredibly the business case; 2) prepare consistent, structured approach high compared to all leadership; 3) educate the to behavioral interviewing, benchmarks). The same was workforce; 4) prepare internal which reduces unconscious found to be true in the 2014 change agents; and 5) integrate bias and improves an survey, which showed a 5% accountability. organization's ability to choose increase in employee the candidate that is the best engagement for ERG members. Brown-Forman’s first, and fit for all aspects of the job.” only, Chief Diversity and By adding the unconscious The ERGs were even referenced Inclusion Officer, joined the bias module, Brown-Forman in an April 2019 Brown-Forman company in 2007. Since that stands out among other review on Glassdoor that said, time, the Office of D&I has organizations, as a mere 19% “The company ‘walks the walk’ grown to a team of seven of companies require

27 | MANY SPIRITS, ONE BROWN-FORMAN unconscious bias training for representation at the Executive Chief Diversity and Inclusion employees involved in hiring. Leader level, which stood at Officer. It included the Black 22% in 2005. Today, females Women's Career Development The impact of this training, as comprise 29% of the Executive Program (which graduated 26 well as very focused, Leaders at Brown-Forman (down participants in February 2018) disciplined efforts of the GTA slightly from its peak of 31% in and the Annual Black Women's team, are evident in 2015). Female representation Summit. Brown-Forman’s hiring data. In on the company's Board of FY17 and FY18, 55% of the Directors has also increased It should also be noted that company’s open salaried during this same time period, BUILD, the Black ERG formerly positions were filled by women. from 15% in 2005, to 23% in known as SPLASH, initiated the In the U.S. specifically, 59% of 2015, and 29% in 2019. concept of “Real Talks,” or open hires were women. This is dialogue sessions that allow the higher than the overall female To improve the employment organization to have sensitive representation at Brown- experience for Black women, conversations about issues that Forman (which stands at 46%) Brown-Forman established the affect minority groups. The and the percentage of women Black Women's Task Force in sessions, which are open to the in the U.S. talent pool (44%). 2014. The task force was charged company as a whole, have During this same time period, with diving into the experience touched on sensitive race issues, 20% of open salaried positions of Black women, understanding current events, as well as in the U.S. were filled by POC the low engagement scores for developmental opportunities (with 9% Black, 6% Hispanic, the group, and presenting its around corporate navigation, 3% Asian, as well as 2% of findings to the ELT. As a result, networking, and personal brand employees indicating multiple a two-year project plan was building. This series has also race/ethnicity). This is higher developed and co-sponsored by inspired similar discussions in than the overall representation both Brown-Forman’s CEO and other ERGs, such as GROW's of POC in Brown-Forman’s U.S. workforce at 16% (with 8% Black, 6% Hispanic, and 2% Asian) but lower than the 25% B-F MANAGEMENT LEVELS of POC in the U.S. talent pool (8% Black, 10% Hispanic, and All salaried positions at Brown-Forman are placed 7% Asian). However, in FY19, into a management level that corresponds with the the organization hired at a rate scope, impact, and responsibilities of the role consistent with the talent pool, meaning 25% of open salaried Individual contributors who focus on positions in the U.S. that were PROFESSIONAL day-to-day operations filled by external candidates were POC and 54% of global LEADER Managers of professionals who make hires were female. These strategic regional/functional efforts, particularly decisions with leadership consultation promoting women and POC, are critical to driving BUSINESS Leaders of leaders, countries, increased representation sub-functions who consult with ELT or across the business. LEADER regional/functional leadership teams

Through both internal EXECUTIVE EVP, SVP, and VP roles with development and external LEADER responsibility for significant-sized hires, the company has also geographies, functions, and/or people seen an increase in female

D&I STRATEGY 2030 - GENDER & RACE EDITION | 28 “Let's Talk” sessions and organization in cases where As Brown-Forman’s work has SPIRIT's “The Elephant in the there was found to be progressed, the company has Room” events. discrepancies. In addition, the been recognized externally for company stopped asking for its commitment to D&I. It has Another area where salary history during initial received a perfect score on the Brown-Forman has focused is external candidate screenings Human Rights Campaign pay equity, a topic that has and eliminated the practice of Corporate Equality Index for garnered significant media salary “step-ups” for employees nine consecutive years and the coverage over the last few in new roles, or increasing the Disability Equality Index for years. A 2016 GROW-sponsored employee’s pay to competitive three consecutive years. In “Let’s Talk” session led to a rates in two or more steps over addition, Brown-Forman has series of focus groups which, a defined period of time instead been named to DiversityInc’s when combined with ongoing of one large increase. The Total “25 Most Noteworthy reviews by Brown-Forman’s Rewards team continues to Companies” for four years in a Total Rewards team, led to review pay practices across all row, and Military Times’ “Best changes to its pay practices to regional and functional groups for Vets Employers” for three ensure a more equitable to ensure fair, equitable, consecutive years. experience for men and motivating, competitive, and Brown-Forman was also named women, particularly within the transparent pay practices. a Diversity Best Practice sales function. To address Brown-Forman will include its “Leading Inclusion Index identified gaps, the company pay equity review process Company” in 2018 and 2019 for made internal equity among the topics of its planned its efforts and commitment to adjustments in the U.S. sales Total Rewards People Day. the three inclusion focus areas:

“...we believe that diversity and inclusion make better, stronger, more successful teams. We value and celebrate the unique contribution that every person brings to Brown-Forman, and we promote an open and inclusive culture where people – all people – are treated with fairness, dignity and respect.” – Brown-Forman Code of Conduct

29 | MANY SPIRITS, ONE BROWN-FORMAN recruitment; retention and create formal D&I Champions 69% to 80% over four years). advancement; and company across the business. The dashboard laid the culture and transparency. Include D&I capabilities in foundation for creating Brown-Forman must now turn leadership assessments. similar dashboards in other to the future and set the Develop and launch a D&I areas of the business. strategy for the next ten years, focused People Day. Introduction of three building on the foundation leadership development established by so many hard- In the three years since the programs targeting the working, dedicated employees People 2025 was published, capabilities required at each across the globe. considerable progress has been level of leadership, including made against these goals, the People Leader, Business STRONG PARTNERSHIP including the: Leader, and Executive Leader 4 BETWEEN HR & D&I Programs, each of which Formation of a People 2025 includes D&I curriculum Given Brown-Forman’s nature project team specifically and/or assessments. as a highly collaborative tasked with “establishing a Ongoing collaboration company, it is not a surprise stronger and more between HR’s People and that there is a strong significant partnership Organizational Development partnership between between Human Resources team and the Office of D&I Brown-Forman’s Office of D&I and the Office of D&I that to design and facilitate and its Human Resources will enable a broader reach ERG-sponsored learning and function. In the company’s across the company in development programs. People 2025 strategy, the building and maintaining a organization was tasked with diverse and inclusive “Building an Inclusive and workforce.” Diverse Workforce” as one of Creation and launch of High the seven people-focused Caliber Hiring, a learning strategic imperatives that module designed to increase would enable Brown-Forman to the skill level of achieve its long-term business Brown-Forman interviewers objectives. The strategy and address opportunities to document states, “HR will appropriately manage bias partner with the Office of D&I that can manifest through to lead Brown-Forman’s efforts the talent acquisition to increase the diversity of our process. workforce and create a more Creation and implementation inclusive workplace.” of a talent acquisition dashboard and candidate The strategy also outlines five slate tracking system for the strategic initiatives that will former North America advance the work, including: Region (now USA & Canada) that increased awareness Build diversity talent and visibility of talent acquisition expertise within acquisition and hiring Human Resources. decisions, increased Educate managers on the leadership accountability, impact of unconscious bias and ultimately increased the and other barriers to percentage of diverse inclusion. candidate slates (with the Partner with Office of D&I to percentage ranging from

D&I STRATEGY 2030 - GENDER & RACE EDITION | 30 In tandem with these efforts, a strong partnership to fully including changes to job Brown-Forman’s HR team has embed the D&I initiatives descriptions, candidate slates, focused energies on evaluating across global HR processes, and interview pools. Finally, its own workforce composition programs, and policies. the region is always looking for while building the global opportunities to improve, and team’s D&I capabilities. As of POCKETS OF GREATNESS has: August 2019, the HR & 5 Communications Leadership Rolled out new Gender 101 team includes four males, two While Brown-Forman’s D&I training to people managers POC, and three non-U.S. based strategy has a global emphasis with the goal of having 80% employees – a diverse and reach, there are certain of managers complete the composition for a traditionally “pockets of greatness” within training. female-dominated function, the company that illustrate how Analyzed gender-related gaps with two of its members D&I can have a lasting, positive in employee engagement serving as ERG co-leads in impact on the way a region or a scores and implemented FY20-FY21. This ERG team operates and performs. In metrics for measuring involvement extends well these instances, inclusion has progress and accountability beyond the leadership team, been embedded into the fabric for the three issues identified with team members across the of the organization and its as driving the differences globe serving as visible and leaders not only appreciate the between men and women. vocal D&I champions, including business case for D&I, but they Identified additional another ERG co-lead from the serve as advocates for inclusion opportunities to increase Production HR team. Finally, across their teams, across the general awareness for both HR training days often global Brown-Forman broad-based D&I issues, as dedicate time for D&I skill enterprise, and sometimes even well as gender issues. building, such as unconscious within their own communities. bias, gender bias, generational Another region that illustrates understanding, and “How to Be In Europe, D&I initiatives are the value of D&I – and in this an Ally” training. championed by senior leaders case, even stretches the across the continent. The group boundaries of cultural norms – The partnership between HR has a regional European is Mexico. “Machismo has long and the Office of D&I is Diversity & Inclusion Council been widespread in Mexican fundamental to ensuring that and has established councils society. Male entitlement – Brown-Forman can attract and throughout many of its markets, reflected in telenovelas, movies, retain a diverse workforce including in France, Germany, work settings, families and that’s supported, developed, Poland, Spain, and the U.K. In romantic relationships – has and united by its inclusive February 2019, the region been tolerated, even culture. However, the fact that gained new D&I leadership celebrated,” according to The they are distinct functions – support through the newly New York Times. While change with ELT-level leaders both established role of Director of is occurring, this “machismo” reporting to the President and Diversity and Inclusion, mindset is still present in CEO – remains ideal. After all, International Division. The Mexican society. Even so, “D&I initiatives are more country or cluster leadership in Brown-Forman hired a female successful when they are the region – as well as the to lead the company’s male- anchored to vision, mission, succession pipeline for local dominated commercial sales and business strategy of the leadership teams – is strong, operation in 2016 and recruited organization, rather than with the majority maintaining a female to serve as General positioned as a people equal gender representation. It Manager for Casa Herradura in strategy.” The goal, therefore, is removing sources of bias from 2019. The region has five ERGs, must be to continue to leverage the talent acquisition process, second only to Louisville, and

31 | MANY SPIRITS, ONE BROWN-FORMAN sponsored a 2017 class of GROW’s Championship Program for Notably, these internal, cultural Mexico-based women. The region is also actively encouraging benefits of Mexico’s D&I diversity of thought, bringing new ideas and inclusive thinking to emphasis are happening help fuel innovation and drive bottom line growth. Moreover, simultaneously with strong there has been considerable focus on adapting the environment to business results. Brown-Forman be more supportive of workplace flexibility. is growing total takeaway value by 12% in Mexico (as of March This focus on D&I, along with other people practices, helped 2019 for a 12-month rolling cement Brown-Forman Mexico’s designation as a “Great Place to period), with its tequila and Work” in Mexico by the Great Place to Work Institute for two whiskey portfolios experiencing consecutive years (2018 and 2019). It can also be seen in double digit growth at 16% and employees’ comments from the 2016 Engagement + Enablement 10%, respectively. With these Survey (see box below). numbers, both Brown-Forman portfolios are outperforming their categories in Mexico.

2016 ENGAGEMENT + In the USA & Canada division, ENABLEMENT SURVEY there are well-established D&I Councils across the sales and VERBATIMS FROM MEXICO marketing teams and two formal partnerships with “Es una empresa que se preocupa por sus empleados y que éstos distributors to recruit and grow sean respetados y bien tratados por todos en la organización. diverse talent. More than a Ofrece herramientas suficientes para cumplir nuestro trabajo. El ambiente es de camaradería. Existe mucho potencial de decade ago, the division's desarrollo. Cuenta con marcas de prestigio y bien valoradas." senior leaders built the New English Translation: “Brown-Forman is a company that cares Jersey-based B-F Swarm about their employees, we are all respected and well treated by program, from which it has everyone in the organization. They give us all the tools to perform our work. The work environment is of camaraderie, development hired and trained numerous potential exists and we have prestigious and well-valued brands." diverse, entry-level sales leaders within the distributor workforce. B-F Swarm “El trabajo en equipo con mi departamento, el apoyo muto. Siempre encuentro el apoyo de todas las personas para realizar participants serve as a en conjunto el trabajo. La oportunidad de combinar mi rol de dedicated sales force for the mamá con el de profesionista." New Jersey franchise market English Translation: "The teamwork in my area, we have mutual support. I always have backup from other people in order to work and are supported by formal as a team. [I value] the opportunity to combine my role as a mom mentors throughout the and a professional." program’s three phases. The Management Development “Lo que valoro de Brown-Formas es el respeto que se tiene por Program was also created by sus empleados y que veo que los lideres de los equipos nos dan con claridad el rumbo que lleva a empresa a mediano y largo plazo the division's senior leaders in y algo mas que valoro es que hoy en dia tiene mucho interes por la partnership with one of the diversidad e inclusion de todas las personas, asi como todas las company’s largest U.S. oportunidades que nos brinda para poder desarrollarme como distributors. In this program, persona y poder hacer una carrera dentro de la empresa." English Translation: "What I value about Brown-Forman is the diverse talent is hired at the respect they have for their employees and that the team leaders distributor where they can learn give us a clear direction the company takes for medium and long the industry and the sales term. What I value the most is that [the company] actually is really interested in diversity and inclusion for everyone as well as environment. Upon conclusion all the opportunities they give us to develop ourselves and make a of the program, participants are professional career in the company." able to apply for Brown-Forman opportunities in markets across

D&I STRATEGY 2030 - GENDER & RACE EDITION | 32 the U.S. These unique Increased education and advancement; 3) education and recruitment strategies and awareness for the entire training; 4) communications; training programs successfully team through diversity and 5) supplier diversity. This provide diverse candidates curriculum, ERG involvement, work is unique among corporate significant industry knowledge and a required annual D&I initiatives because of its and distributor experience “Broaden Your Perspective” inclusion of the company’s while preparing them to apply performance management operator and technician for market manager positions goal focused on D&I. (hourly) employee population. with Brown-Forman. To track its progress, the These key focus areas drive the The work of Brown-Forman’s organization has a D&I work of the Global Production corporate Finance and scorecard that is updated twice D&I Council, which is co-led by Information Technology (IT) a year and shared with the the Chief Production & team illustrates how a “pocket leadership team. Through this Sustainability Officer (CPSO) of greatness” can play out in a work, Finance and IT has and VP, HR and comprised of corporate function with accelerated the development of the Global Production employees located around the diverse talent and increased Leadership Team, production world. To illustrate, the team female representation at the site leaders, and HR Business has: Executive and Business Leader Partners. The work and levels to percentages that progress is tracked through its Established talent surpass Brown-Forman and Diversity Management acquisition process that external benchmarks. Scorecard and includes: requires diverse slates, diverse interview panels, Similar progress has been made Regularly scheduled and interview questions with Brown-Forman’s Global awareness and training focused on inclusion as a Production team, which includes activities, including core competency. “Build a Diverse and Inclusive unconscious bias, Solid talent management Workforce/Culture” among its generational bias, micro- practices that include strategic priorities. To achieve inequities, and cultural reviewing diverse talent its goal of embedding D&I into competency training. during the annual talent the everyday business, the A successful Science, review process and Global Production team has five Technology, Engineering, and accelerating the development key focus areas: 1) leadership and Math (STEM) Rotation Program of diverse talent through accountability; 2) recruitment, designed to increase minority new programs. retention, development and representation in STEM fields.

33 | MANY SPIRITS, ONE BROWN-FORMAN A talent acquisition process University of Louisville J.B. evolution is an objective of requiring diverse slates and Speed School of Engineering to Brown-Forman’s D&I efforts, diverse interview panels send young women and POC to there are also many components (with exceptions only being summer camp to learn about of the company’s existing culture granted after a formal review STEM. While there is no that help to facilitate the ongoing with the CPSO and VP, HR). guarantee that they will come transition to a more inclusive D&I Councils for the work at Brown-Forman when environment for all employees. company’s production sites, they graduate from college, this with members that include is a way to help expose Brown-Forman’s culture, which is operators and technicians and underrepresented groups to sometimes described as a support staff and individual STEM opportunities. “culture of caring,” is known to scorecards that localize D&I be highly collaborative, warm, initiatives and priorities The commitment to D&I at welcoming, relationship-focused, (such as training) based on Brown-Forman, and the great and based on timeless values of the needs of the site/function. work that results, extends well integrity, excellence, teamwork, A new “test and learn” beyond the functions, regions, trust, and respect. These are all process for the operator/ and individuals mentioned characteristics that make D&I a technician population to within this document. It is natural fit for the company, or determine the best way to merely a sampling of the great even a more contemporary integrate D&I work across all work that is happening “decoding” of these values in populations. throughout the organization, today’s workplace. For example, A “M” (Morale) scorecard that in pockets both big and small. the emphasis on integrity means tracks metrics across that Brown-Forman and its succession slates, BROWN-FORMAN leaders will recognize when it recruitment, awareness 6 CULTURE needs to improve, and take the training, and engagement. steps needed to “make things The scorecard, which is Many D&I strategies focus on right” (as the recent efforts reviewed regularly by the creating an inclusive culture, or regarding pay equity CPSO, allows functional and one that leverages diverse demonstrate). site leadership to identify backgrounds of individuals to and address gaps and drive value and business results Similarly, its welcoming, opportunities. by creating an environment in relationship-based culture makes which employees feel involved, Brown-Forman a place full of The production team also respected, valued, and hospitality and congeniality sponsors a scholarship at the connected. While this cultural where colleagues are often

D&I STRATEGY 2030 - GENDER & RACE EDITION | 34 treated like friends and family, while celebrating the differences in global, salaried employees is background, demographics, and experiences. eight years and 11 years for U.S.-based salaried employees As such, it is not surprising that the 2016 Engagement + (compared to four years for the Enablement Survey found that 83% of global salaried employees U.S. labor market). responded favorably to the statement, “Brown-Forman has created an inclusive environment where people with diverse backgrounds While low turnover and long and experiences can succeed,” and 85% agreed with the statement, tenure can be a double-edged “I believe that Brown-Forman's investment in D&I is valuable.” The sword, it does mean that verbatims collected in the 2016 survey illustrate this sentiment: Brown-Forman can focus its energy on highly strategic people “B-F is a kind, gentle company. There's mutual respect for each needs, such as D&I. As shared in other and the culture that embraces diversity and inclusion.” People 2025, “organizations with “[B-F] enables a very comfortable and open working environment long tenure typically benefit where new ideas are welcome and all perspectives are heard.” from deep historical knowledge “I most value the genuine respect for diversity and inclusion of of the company and its brands, our people. While we still have progress and important work which creates value in every ahead, I feel confident that the vast majority of our leaders corner of the organization. throughout the organization are sincere about fostering a They avoid the investment in culture where all employees feel not only welcome, but valued.” human and financial resources in managing significant turnover Brown-Forman’s culture is among the many reasons why the and focus on important people company has low turnover and long tenure. The average tenure for issues other than turnover.”

When we create an inclusive culture – where we each take responsibility for the quality of our daily interactions – we can maximize our collective and individual potential and increase our productivity, creativity, and innovation. I am grateful to work in a company where employees are actively engaged in building an environment where we can bring our best selves to work to do our best work. In the process, we are also doing our part, as global citizens, to create a better world. – Ralph de Chabert, Brown-Forman's SVP, Chief Diversity, Inclusion, and Global Community Relations Officer

35 | MANY SPIRITS, ONE BROWN-FORMAN WEAKNESSES of growth that Brown-Forman surveys show considerable increased and formalized its difference in responses to BROWN-FORMAN D&I strategy, fundamentally, several questions across 1 CULTURE yet unintentionally increasing diverse workforce segments. In the tensions within the the U.S., 92% of Asian Just as Brown-Forman’s culture company for the purpose of employees and 87% of White is a strength in its D&I journey, becoming more inclusive. employees agree with the and a source of competitive However, not all these tensions statement, “B-F has created an advantage for the organization, have been resolved, as there are inclusive environment where it can also be a weakness in still underlying feelings of people with diverse many ways. In an environment entitlement and pockets of backgrounds and experiences that is very familial and resistance throughout the can succeed.” This number relationship-oriented, organization. decreases dramatically to 68% individuals who don’t see for Hispanic employees and many colleagues that look, act, These frustrations and 59% for Black employees. and think as they do, may find concerns can be seen in the it difficult to be themselves at verbatim comments from the One Black male who left Brown-Forman, despite the 2016 Brown-Forman Employee Brown-Forman shared his organization’s best efforts to Engagement + Enablement experience in an April 2019 be inclusive. Survey (see box below). article entitled “Millennials Ditching Corporate America: The greater an individual’s This may be one reason why An Inside Scoop on why physical distance from the Brown-Forman engagement Millennials are working for company’s corporate headquarters, or their social distance from the majority of the workforce, or the mental gaps they must overcome due 2016 ENGAGEMENT + to language differences, the harder it will be for an ENABLEMENT SURVEY individual to feel part of the VERBATIMS ON D&I @ B-F “Brown-Forman family” and bring their best self to work "I believe in B-F’s diversity and inclusion goals, but when each day. hiring new employees or filling open roles, I often feel that this priority overrides hiring the best person for the These gaps in experiences are job...D&I should be a long-term vision, but I struggle with more dramatic today than any the accelerated pace at which this seems to be period in Brown-Forman’s occurring." history given the company’s growth outside the U.S. over the last 20 years. In 1995, Brown-Forman’s European "I believe the intent of diversity [efforts] at workforce consisted of only six Brown-Forman [are] good but the implementation and employees. In 2008, it had support initiatives are causing a growing divide between grown to 316 employees. Today, the groups they have created. It is quite clear that if you it is more than 900 employees are a hard-working white male, you will certainly be strong, an increase of nearly passed over for someone of a different ethnic group/sex/sexual orientation." 185% in the last 10 years.

It was during this same period

D&I STRATEGY 2030 - GENDER & RACE EDITION | 36 themselves.” He said, “the and Hispanics and 45% of identity is particularly taxing hardest part...for me as a Asians say that they ‘need to for diverse talent “because Black male was the daily compromise their authenticity’ their working identities must feeling of having to change to conform to their company’s counter common cultural who I am in order to fit in. standard or demeanor of style.” stereotypes.” These challenges Although bringing your ‘true A 2018 study in the U.K. by the may be one reason behind self’ to work was encouraged, Chartered Institute of Brown-Forman’s increased I always felt like...people who Personnel Development found turnover rates for Black and liked me so much didn’t really that, “Black, Asian and Hispanic employees. know or see the real me, only minority ethnic groups are the always happy, dressed up, significantly more likely than Brown-Forman’s long tenure, extra proper talking, overly their white British which is driven by its strong polished version of me, because counterparts to say that they culture, also makes it more I’d trained and conditioned need to change aspects of their difficult for the company to myself to be this way based on behavior to fit in,” and it was make meaningful changes to what/who society tells us we particularly challenging for its workforce composition, should be in order to get the people with Indian, Pakistani, particularly at the Executive best jobs in the best places.” and Bangladeshi backgrounds. Leader level, where turnover In the book Working Identity, rates are even lower than the This is not a challenge isolated authors Mitu Gulati and Devon general population and female to Brown-Forman. In fact, Carbado argue that creating representation stands at Harvard Business Review found and putting forth an 29% globally. that “37% of African Americans “appropriate” workplace Finally, Brown-Forman’s emphasis on relationships, both formal and informal, may inadvertently disadvantage 2016 ENGAGEMENT + diverse employees. As Harvard ENABLEMENT RESULTS Business Review states, “A VARY BY DEMOGRAPHIC company is built on informal relationships. Those informal – The percent of U.S. employees who believe but powerful – sets of "Brown-Forman has created an inclusive relationships create the tracks environment where people with diverse backgrounds that move people into senior can succeed" is significantly lower for Blacks and management. They determine Hispanics compared to other races/ethnicities how senior management feels about people. Informal relationships are all about who 92% feels comfortable with whom. 87% POC don’t have easy access to these informal relationships.” 68% 59% Ironically, the many characteristics that make Brown-Forman a great place to work (i.e. a wonderful culture, ASIANS

WHITES low turnover, strong relationships, generous BLACKS HISPANICS compensation and retirement benefits, and a focus on

37 | MANY SPIRITS, ONE BROWN-FORMAN employee development) also the strongest correlation understand or acknowledge the make it a challenge to advance between financial performance challenges that women face in in its D&I journey. and gender representation is gaining a seat at the table. A found at the executive team. McKinsey study found that According to McKinsey, only 19% of male respondents LEADERSHIP LOOKS “Companies in the top-quartile strongly agreed that it was 2 DIFFERENT THAN THE for gender diversity on their more difficult for women to WORKFORCE executive teams were 21% more reach top management – in likely to outperform their fact, they were six times more Despite focused efforts on national industry median on likely to disagree with the growing diverse talent, through EBIT margin and 27% on EP statement than women. Yet, such development programs as margin.” Even more, globally women still hold less the GROW Championship outperforming companies have than 29% of senior leadership Program for women and The a higher percentage of women positions. In the U.K Advocacy Program for POC, in revenue-generating specifically, there are only Brown-Forman still needs to positions, or “line” roles, than seven female CEOs in the FTSE increase diversity their underperforming peers. 100, or the top 100 companies representation at the Executive on the Financial Times Stock and Business Leader levels. Despite a sound business case, Exchange by market women are still capitalization. This workforce segment is underrepresented in executive particularly important to suites around the world, and The challenges are similar with emphasize in D&I strategies, as many men may still not racial and ethnic minorities.

You can be a fierce competitor in the marketplace while operating in a compassionate way with teams of people who value inclusion and care for one another. – Michele Buck, President & CEO of The Hershey Company

D&I STRATEGY 2030 - GENDER & RACE EDITION | 38 Of the Fortune 500 companies, Brown-Forman and 36% of all Business Leaders. By way of only three are led by Black comparison, females in the U.S. talent pool, as defined by the U.S. CEOs (all of whom are male). Bureau of Labor Statistics, make up approximately 35% of the Furthermore, in the U.K. ethnic executive leader and 40% of the business leader talent. minorities hold only 6% of the management positions. As of Despite a fairly purposeful effort, Brown-Forman’s female senior February 2019, there were only executive representation has not increased as much as desired. To five ethnic minority CEOs in provide some context, the U.S. female Executive Leader the FTSE 100, and 51 of the representation was approximately 23% in 2005, 22% in 2010, and companies on the list had no 27% in 2015, an increase of only 4% over 10 years. Four years later, ethnic minority board the percentage remains the same, with females comprising 27% of members. U.S. Executive Leaders in 2019.

Asians, in particular, are In addition, in the U.S. only 9% of Brown-Forman’s Executive struggling to reach leadership Leaders and 17% of Business Leaders are POC, compared to their levels. According to Harvard talent pool representation of 13% and 19%, respectively. Business Review, they are the most successful demographic by some measures – education, household income, workforce representation – yet there “Gender equality is an issue of international continues to be a “bamboo economic and social importance. As leaders ceiling” that makes Asian American white-collar and employers, we know there is much more professionals the “least likely we can do to make a difference. For too long, group to be promoted from women alone have led the way advocating for individual contributor roles into management” positions. In and achieving hard-won improvements when fact, the Harvard Business so many men hold the power and influence to Review study – which used help advance this work.” EEOC workforce data – found that “white professionals are about twice as likely to be – Founding Members, Male Champions of Change, a promoted into management as coalition of more than 220 leaders across Australia their Asian American focused on gender inequality counterparts.”

Women and POC are underrepresented in Brown-Forman senior leadership. In 1999, the ELT was FEMALES IN LEADERSHIP 14% female and no B-F U.S. EXECUTIVE LEADER REPRESENTATION OVER TIME representation from POC. Twenty years later, the team is 22% female and 22% POC. When 23% 22% 27% 27% you consider other senior leaders, the numbers are somewhat better. As of 2019, 2005 2010 2015 2019 female employees represent 29% of all Executive Leaders at

39 | MANY SPIRITS, ONE BROWN-FORMAN These demographics – which obviously skew heavily toward B-F BY MANAGEMENT LEVEL White males – are partially a 2019 WORKFORCE REPRESENTATION* product of the industry (which tends to be male dominated), its low turnover rates (which is GENDER REPRESENTATION: ALL BROWN-FORMAN even lower at senior leadership levels), its size (which is relatively small compared to its 46% industry peers), and its 29% compensation and benefits 36% 42% structure (which discourages voluntary turnover, especially 71% 52% 64% at the senior leadership level). 58% Comparatively speaking, 48% Diageo’s female representation on its Executive Committee 54% grew from 7% in 2010 to 40% in 2019. The significant EXECUTIVE BUSINESS LEADER PROFESSIONAL ALL EMPLOYEES LEADER LEADER difference between the two organizations, despite being in the same industry, underscores the impact that company size, GENDER REPRESENTATION: GENDER REPRESENTATION: turnover, and corporate U.S. WORKFORCE INTERNATIONAL WORKFORCE headquarters location can have on an organization’s ability to drive meaningful change at 49% 51% 58% 42% senior leadership levels.

This differs from other levels of 29% 27% the organization where women 41% 36% 39% 45% 45% and POC make up a greater 73% 71% 64% 64% 61% percentage of the population. 59% 55% 55% Women comprise 42% of 36% Brown-Forman’s Leaders, or managers of individuals or small teams, and 52% of ETHNIC REPRESENTATION: U.S. Professionals, or individual contributors with roles that do not require significant career BLACK HISPANIC ASIAN or leadership experience. EXECUTIVE LEADER** 5% 3% 0% Studies show that, if given the BUSINESS LEADER 8% 5% 4% opportunity, women want to LEADER 6% 6% 3% take on additional leadership roles. In fact, according to PROFESSIONAL 9% 5% 2% McKinsey, their career ambitions exceed those of their *B-F workforce data as of August 19, 2019 male counterparts. In its study, ** With rounding, total B-F POC is 9% for Executive Leaders with 5.49% Blacks and 3.3% Hispanics 44% of female senior managers

D&I STRATEGY 2030 - GENDER & RACE EDITION | 40 strongly agreed with the WORKFORCE LOOKS enhance its multicultural statement that “over the course 3 DIFFERENT THAN marketing practice. The group, of my career, I have the desire CONSUMERS formerly led by Tracey Johnson to reach a top management (now Brand Director for position,” compared to only While many D&I conversations, Woodford Reserve), was 37% of male senior leaders. particularly within this applauded in a May 2019 article Additionally, 58% of women document, speak to the internal in The New York Times for of color are willing to take impact of D&I strategies, there serving as an “in-house risks to advance their careers, is also significant value from a consulting operation” that while only 38% of White business standpoint. The more helps the company’s brands women will take the same step. diverse an organization, the improve their outreach to POC greater its ability to (compared to its original And despite an ongoing myth, understand the needs of, and design as a niche group that women are equally likely as market to, diverse populations. created separate advertising men to advocate for for diverse consumer themselves and request a This concept is captured in segments). salary increase. A Harvard Coca-Cola’s D&I Mission Business Review study found statement, which motivates the Yet, having a multicultural that women ask for raises in company to “mirror the richly marketing practice isn’t equal numbers to men, yet diverse markets we serve, sufficient. Brown-Forman must are less likely to receive them. capitalizing on our inclusive evolve its workforce to match The study, conducted in 2014 culture to attract, develop, its current and future in Australia among 4,600 engage and retain a global consumer base or it will never employees in 800 workplaces, talent mix to fuel our fully capitalize on the true found that women who asked competitive advantage.” value of D&I. When considering for raises were successful gender representation, as a only 15% of the time, yet men For Brown-Forman, there is a whole Brown-Forman’s obtained increases 20% of the significant opportunity to population roughly mirrors the time. continue to expand and composition of global spirits

“Leaders have long recognized that a diverse workforce of women, people of color, and LGBT individuals confers a competitive edge of selling products or services to diverse end-users.” – Harvard Business Review

41 | MANY SPIRITS, ONE BROWN-FORMAN consumers. However, when you Brown-Forman only has 20% of co-lead positions) to D&I work. consider the company’s gender its Executive and Business Each ERG is organized representation by management Leader roles filled by women. differently, with the number of level, women are significantly Even when you consider all leadership positions and underrepresented at the higher organizational levels in this committee members differing levels of the organization, country, females comprise only drastically (from the more where the key strategy and 34% of all salaried employees. robust GROW structure to the business decisions are made. more lean BRAVE team). Yet the CURRENT RESOURCES MAY challenge is the same for each – This reality is further 4 NOT SUPPORT FUTURE finding employees with the time exacerbated outside of the U.S., GROWTH to dedicate to leadership where there are fewer positions, keeping them employees in Executive and Even with an experienced, engaged and committed when Business Leader roles. For ELT-level Chief Diversity & other work demands interfere, example, in one European Inclusion Officer, and a team of and ensuring ongoing support country, where spirits six talented, dedicated from their managers for what consumers are 56% male and individuals in its Office of D&I, is sometimes characterized as a 44% female, Brown-Forman has Brown-Forman’s D&I efforts “side job” as opposed to being three Executive Leader roles, all also rely on the hard work and appropriately characterized as held by men. There are eight dedication of a “volunteer the “business of the business.” Business Leader roles, all but army,” or the global employees two of which are held by men. who step up to spearhead D&I According to Harvard Business The situation is similar in activities in addition to their Review, this challenge may be another European market, regular job responsibilities. among the reasons why some where spirits consumers are While this employee-led ERGs falter or are unsuccessful 54% male and 46% female, yet framework is not uncommon in in meeting their stated 80% of Brown-Forman’s D&I structures, it may not be objectives. Its August 2017 Business Leader roles are held the best model for sustained article entitled “Deloitte’s by males. Recently, however, a growth and progress. Radical Attempt to Reframe female was appointed to the Diversity” claimed that few executive role in the country. These challenges are evident in ERGs “were properly funded, A Latin American country is the ERG framework, which their leaders were usually doing the one location where females relies on employees to commit the work in their spare time, are the majority of spirit as much as 15-20% of their and the visibility they gained consumers (at 51% vs 49%), yet work week (in the case of from running an ERG didn’t

D&I STRATEGY 2030 - GENDER & RACE EDITION | 42 necessarily serve them well in Even though he’s backed by a influence on the daily getting a promotion to a big team of professionals who experience of employees than operational role in the work tirelessly and creatively any other individual in an business.” to champion the company’s organization. D&I goals and objectives, the While Brown-Forman ERGs fact remains that the Office of Yet, many D&I conversations, continue to succeed despite D&I is not adequately staffed in organizations both large these challenges, there is some and equipped to embed its and small, speak about the evidence that suggests a work across the organization, challenges posed by members possibility for burnout or drive global communications of the “frozen middle,” a term disengagement among ERG and awareness, and transition used to describe those middle leadership. Over the years, perceptions of D&I from a managers who prevent the many ERG co-leads expressed “project” to an integral part of change that’s championed by concerns that the majority of Brown-Forman’s business senior leaders and desired by the ERG work is handled by strategy. individual contributors from only a small fraction of the flowing seamlessly throughout group’s membership. MIDDLE MANAGERS FACE an organization. These 5 COMPETING PRIORITIES individuals are often described The structure of ERGs, which as the “in-group,” those who brings in new employees every For D&I to be successful in any enjoy unearned privilege and year to serve on steering organization, it needs middle advantages created by certain committees for a two-year managers to actively engage as aspects of their identity (e.g. rotation, requires the sitting the “organizational glue” tying race, gender, nationality). ERG leadership and the Office the vision of senior leadership These individuals may be at of D&I to provide ongoing to the daily reality for different places in their D&I education and onboarding employees across the journey, some unintentionally efforts for new leaders. While organization. The support of all unaware, others cautiously this process ensures fresh middle managers is critically optimistic, and others thinking and diversity of important to the success of D&I staunchly opposed. thought, and prevents potential initiatives and outcomes for a burnout, it increases the number of reasons. This group demand placed on current is on the front-line, making leaders during the transition. day-to-day decisions that impact an organization's “To opt out of Finally, Brown-Forman’s Office ability to build and maintain a of D&I runs lean (much like the diverse workforce and an conversations rest of the organization). inclusive culture, all while about privilege Currently, only one team maintaining a focus on member is located outside of delivering business results. and oppression Louisville, which could limit the Moreover, they hire and team’s ability to reach and develop employees, set because they make influence a global audience. The individual performance goals team’s leader, Chief Diversity, and expectations – and then you uncomfortable Inclusion & Community evaluate results. They approve is the epitome of Relations Officer, Ralph de (or reject) requests from Chabert, has unintentionally employees to work flexibly, to privilege.” become the sole D&I face and participate in ERGs, to attend brand – not the best way to build diversity events and training – Brené Brown, a global, meaningful brand. and the like. They have more Dare to Lead

43 | MANY SPIRITS, ONE BROWN-FORMAN Conversations with those the change, and instead be This requires a shift in mindset middle managers who are part of the movement. from one of equality to equity. reluctant to support D&I As Bernard J. Tyson, Kaiser initiatives aren't easy, but they As organizations proceed in Permanente’s Chairman and are necessary. A Harvard their quest to hire, retain, and CEO said, “Equality says Business Review article points promote diverse talent, the everybody gets equal. Equity to “social science research challenge, according to says no, everybody gets what [that] suggests that people Harvard Business Review, is to they need. Part of building an tend to react with anger and hear the in-group’s feelings inclusive environment is not irritation when confronted and frustrations and, how you’re going to change the about their biases – ultimately, to help them better person. It’s how you’re going to particularly when those biases understand the fundamental change yourself and the are accurately labeled as such. objectives of the D&I strategy environment in which the Although such interactions and its potential to enable person is going to have to may be unpleasant, they also business growth. Otherwise, succeed.” tend to lead to behavioral their resentment, change, and so should be frustrations, and beliefs that Brown-Forman still has welcomed as opportunities for diverse talent is receiving considerable work to do to growth.” This requires moving “unfair and unmeritocratic” engage more of its middle the reluctant middle managers treatment will come out in managers, who already have from passive bystanders to informal company chatter, many competing demands for active D&I champions, to online comments, retention their time, their energy, and compel them to stop resisting rates, etc. their mindshare. This includes

EQUALITY VS. EQUITY

IN THIS IMAGE, EVERYONE RECEIVES HERE, PEOPLE ARE GIVEN DIFFERENT FINALLY, THE BARRIERS ARE REMOVED THE SAME SUPPORT. THEY ARE SUPPORTS TO HAVE EQUAL ACCESS. BECAUSE THE CAUSE OF THE TREATED EQUALLY. THEY ARE BEING TREATED EQUITABLY. INEQUALITY WAS ADDRESSED.

This series of images, which was created by Craig Froehle, has been widely circulated when discussing the concepts of equality vs. equity. While it is not a perfect representation of the challenges presented to individuals of diverse circumstances and backgrounds, since not all inequities are inherent to individual characteristics (e.g. height), and not everyone always starts on “level ground,” it quite accurately depicts Brown-Forman’s desired future state. The end goal of the company’s D&I initiatives is not the first (equality) but the third, where all systemic barriers are removed, inclusion is at the core of the culture, and each person can experience the organization fairly.

D&I STRATEGY 2030 - GENDER & RACE EDITION | 44 increasing awareness and differently than they do. milestones along the journey. exposure to the business case In fact, it may be the difference behind D&I, or the positive INCONSISTENT between success and failure, outcomes possible at the 6 ACCOUNTABILITY PREVENTS aspiration and reality. individual, team, and business MEANINGFUL CHANGE level. It requires increased As organizations evolve along According to Deloitte’s 2017 training on unconscious biases the D&I continuum, part of the Global Human Capital Trends that may inadvertently create evolution includes research, while 70% of social barriers for diverse implementing metrics and responding companies promote talent. It suggests that more processes that hold the their organization as a diverse individuals at the Leader and organization and its leadership and inclusive organization, Business Leader levels should more accountable for the only 12% have actually be involved in ERG activities success of D&I initiatives. This achieved this standard and and initiatives. It includes accountability is inconsistent even fewer tie compensation to setting people leader across Brown-Forman, diversity outcomes (at 6%). performance objectives that preventing the organization are tied to D&I learning and from experiencing The tie to compensation is outcomes. And finally, this fundamental changes in its critical according to Jennifer means better defining what culture and workforce Reynolds, President & CEO for “inclusive leadership” looks composition. Toronto Financial Services like, teaching managers how to Alliance, “For business leaders lead and develop employees This critical step may be among hoping to drive transformational that may think, act, and look the most meaningful change in their talent pool and

Smart managers understand that they need to look beyond their daily activities and show a wider interest in leadership and management in general and how it is practiced within their organization. A smart male middle manager will have to show that he understands the importance of gender parity and knows how to foster it. – Elisabeth Kelan, Linchpin – Men, Middle Managers, and Gender Inclusive Leadership, 2014

45 | MANY SPIRITS, ONE BROWN-FORMAN company, there is no doubt The study also found that only OPPORTUNITIES that compensation is an 42% of organizations hold integral part of that process. senior leaders accountable for ENHANCE D&I BRAND AND Management at all levels needs making progress toward 1 INCREASE COMMUNICATIONS to be held accountable for gender parity. hiring, developing, and With its significant expertise promoting diverse talent. They Before today, Brown-Forman in brand management, need to be compensated for the had not developed or published Brown-Forman has the unique success of that talent in order ambitions for increasing marketing and to truly be invested in driving diversity representation across communications capabilities diversity in the organization. If the global organization, though needed to define and create a performance evaluations do this has been a stated objective D&I strategy and brand that is not include clear objectives and and focus of D&I efforts. There effectively positioned, rewards for the diversity goals are some places within the marketed, and communicated, of the company, then organization, however, that both internally and externally. employees will quickly dismiss have had functional or the initiative and focus on regional-specific diversity This starts with identifying those objectives that result in scorecards to bring visibility to target audiences, and then greater compensation and the work and the progress intimately understanding their more rapid promotion. being made. The Global perceptions and experience Production Diversity with D&I, as well as Brown- From a workforce Management Scorecard, for Forman’s culture and employee example, translates functional- experience. According to composition specific D&I objectives into PricewaterhouseCooper’s 2015 perspective, localized scorecards for all Millennial Survey, 80% of leaders and production sites. Millennials agree that D&I “research shows that policies impact their setting and For Brown-Forman to employment decisions. accelerate its progress in following through achieving parity across all However, employees are on diversity goals is dimensions of diversity, and naturally more skeptical of continue on its path to true employer-made claims, with the most effective inclusion, it is time to draw the 61% of employees (or 62% of method for line in the sand and increase women, 65% of Millennials, and individual, leader, and 66% of emerging market increasing organizational accountability. candidates), indicating that underrepresentation they are more skeptical of “Saying there is no deadline on “what employers say about of women and this, or that things will right themselves than they were minorities.” themselves, is an ahistorical three years ago.” As such, way of looking at the advances many employers are that have been made in terms encouraging employees to Yet, according to Women in of equity and representation,” submit reviews on Glassdoor, the Workplace 2018 by said Katherine Maher, CEO and a platform that’s deemed much McKinsey, only 38% of Executive Director, The more credible by job candidates companies have set target Wikimedia Foundation. “It has than employers themselves. goals for gender representation, always required people to do and a mere 12% share the the work. It has always It is also important, majority of their diversity required people to stand up particularly for internal metrics with employees. and make it a priority.” audiences, to define the

D&I STRATEGY 2030 - GENDER & RACE EDITION | 46 business case, or the “why” employees, investors, etc.) “success.” However, only 39% behind the D&I strategy. digest information in the same of diversity leaders were Equally important is making manner. Even more, there can satisfied with their ability to sure the D&I strategy is be considerable differences take action against D&I intrinsically tied to the even within one segment based metrics. While it is universally business strategy. A common upon different factors (i.e. understood that sharing more disconnect between D&I and employee preferences may data and metrics is ideal, the organizational strategy occurs differ by age, tenure, location, level of transparency into the when you create a D&I brand role, and the like). data may depend on an strategy that is separated from individual’s role and position the organizational brand E. & J. Gallo Winery, for within the organization. The strategy, thus “requiring the example, held a livestream Gartner Chief Diversity Officer organization to manage panel discussion in April 2019 Forum Discussion Materials multiple stories.” from Twitter headquarters suggests the following, “Senior with Twitter Blackbirds, the executives need to understand Johnson & Johnson, for social media giant’s Black ERG, the entire D&I picture to drive example, states its D&I vision is on the topic of “inclusion and action. Middle managers work “for every person to use their diversity in the wine and more effectively if guided unique experiences and spirits industry,” toward a few key areas. HR backgrounds, together – to simultaneously illustrating its needs full transparency into spark solutions that create a strong command of social D&I metrics to inform the better, healthier world.” For media tools while leveraging talent strategy, but heads of Brown-Forman, D&I needs to be partnerships with ERGs from D&I should report metrics to placed into the context of other organizations. the business in a stand-alone “Brown-Forman: Our Story,” dashboard.” not “Diversity & Inclusion at UNDERSTAND D&I DATA AND Brown-Forman.” 2 METRICS Each organization must identify what metrics it wants Finally, organizations must Before individuals and leaders to track, the individuals deploy an integrated, can be held accountable for the responsible for updating them multimedia approach to success of the D&I strategy and on a regular basis, and the market its D&I brand, efforts, they must have access method and frequency by recognizing that not all to and understanding of the which they are communicated consumers (which, in this case metrics that will define to the accountable individuals includes employees, potential individual and/or collective and teams.

47 | MANY SPIRITS, ONE BROWN-FORMAN IMPROVE INDIVIDUAL, According to Harvard Business managers and executive 3 LEADER, & Review, “For women and POC, leaders to D&I goals. Other ORGANIZATIONAL the key to rising above the companies, like Microsoft and ACCOUNTABILITY playing field that remains Apple, connect executive and stubbornly uneven is staff compensation to D&I To ensure an organization is sponsorship. A sponsor is a objectives and, as a result, have making continued progress senior-level leader who seen improvements in against its D&I strategy and elevates their protege’s retention for underrepresented objectives, it must hold visibility within the corridors groups. Allstate has a individuals, leaders, and the of power, advocates for key Quarterly Leadership global organization assignments and promotions Measurement Survey for its accountable for achieving for them, and puts their department managers, specific, documented goals. reputation on the line for the connecting annual reviews and These goals should link back to protege’s advancement. For pay decisions with the leader’s specific strategic initiatives, those who feel marginalized by team demographics, promotion and can be both short- and their gender, ethnicity, age, rates, retention, and turnover. long-term in nature. For sexual identity or education individuals, this may mean and economic background, For the organization as a including a D&I objective in sponsorship is particularly whole, increasing their annual performance crucial in invigorating accountability may come in the management goals, or ambition and driving form of setting, publishing, assessing their behavior and engagement...Lack of and tracking metrics for the performance against critical sponsorship increases global representation and cultural competencies. someone’s likelihood of employment experiences of quitting within a year.” females, POC, and other For leaders, this could include diverse employee segments. more specific requirements The ultimate in accountability, around recruiting, promoting, some companies have even tied CONTINUE D&I FOCUS IN and developing diverse talent leader compensation and 4 GLOBAL TALENT ACQUISITION within their functional and bonuses to D&I results. Sodexo, regional areas of responsibility a French food services and As more companies place an through formal scorecards. In facilities management increased emphasis on D&I, the addition, leaders may also be company, is a leader in this harder it will be for an asked to serve as a mentor or space. It has linked as much as employer to recruit and retain advocate for diverse talent. 25% of the total bonus for the desired talent – the laws of

D&I STRATEGY 2030 - GENDER & RACE EDITION | 48 of supply and demand will promotions. competency of every leader, simply work against it. Yet, at Fewer than one in four and a guidepost for every the same time, it is this companies use tools to people-related business increased emphasis that will reduce bias when reviewing decision. It means that the attract the individuals who resumes. workplace must allow each desire an employer where Fewer than half of individual to bring their best diversity is celebrated and companies require diverse self to work, not force inclusion is ubiquitous. candidate slates for external individuals to change to hires. conform to the workplace. Deb As Harvard Business Review Only a quarter of companies DeHaas, Deloitte’s former suggests, “if the goal is require diverse slates for Chief Inclusion Officer said, proportional representation internal promotions. “Inclusion is leadership in over the long term, it’s better action...it’s everyone's to overcorrect for bias early on, While there is still much work responsibility, every day and at by hiring more people from to be done, the trend is moving every level, to create the traditionally underrepresented in the right direction. LinkedIn culture that can make that groups, than it is to found that “78% of talent happen.” undercorrect.” However, this is professionals and hiring not necessarily accomplished managers say that diversity is It begins with day one. A by favoring a particular race or the top trend impacting how Harvard Business Review study gender explicitly, but by they hire” while 71% report found that employees are 42% making simple adjustments to that “achieving gender parity less likely to indicate that they the selection process, such as at their company is a top will leave their job within a using blind resumes in the priority.” year if they are able to bring talent acquisition process and their “whole selves” to work. objective metrics in FOCUS ON INCLUSION Employers have the performance management. 5 opportunity, from the moment an employee accepts a job It may also be beneficial to While talent acquisition offer, to build an inclusive include compensation and processes and efforts can go a environment where the benefits information on job long way in increasing the descriptions, which is typically diversity of an organization, it of more interest to women is through inclusion that real candidates. Moreover, cultural change will occur. As according to LinkedIn, “when Harvard Business Review “Diversity is being an employer shares salary stated, “Diversity equals information in job posting, this representation. Without invited to the could be seen as a signal that inclusion, however, the crucial party. Inclusion is they are committed to connections that attract transparency and fair pay diverse talent, encourage their being asked to regardless of the candidate’s participation foster gender or background.” innovation, and lead to dance.” business growth won’t __ Organizations have a long way happen.” Or, the business case – Verna Myers, to go in this arena. McKinsey for D&I, quite simply, won’t be VP, Inclusion Strategy found: fulfilled. at Netflix and author, inclusion strategist, and Fewer than one in three This means that inclusion must companies set diversity be present in every interaction cultural innovator targets for hiring and between colleagues, a cultural

49 | MANY SPIRITS, ONE BROWN-FORMAN employee feels valued for who 1.3 times more likely to “feel Inclusion is also about they are and what they bring to that their innovative potential versatility, flexibility, and the table. From an onboarding is unlocked.” ensuring a work environment perspective, employers must is adaptable to the needs of the incorporate D&I information However, building productive, diverse populations it wishes to into orientation, provide successful workplace attract and retain. Women, for corporate materials and relationships – particularly example, are more likely to information that ensure new across racial boundaries – leave a company if it is not employees feel in the know requires trust and risk taking, conducive to their needs. regarding the company’s big since most people are naturally picture strategy, and introduce drawn to individuals similar to In fact, 69% of women who the acronyms and terminology themselves. As such, Harvard depart an organization would that will help individuals Business Review suggests that have stayed at their current speak the same language as organizations that “hope to employer if it had a flexible their new colleagues. increase diversity and promote work option. Millennials also the careers of racial minorities value flexibility – 77% believe a It is equally important to build can benefit from being aware flexible schedule would make inclusion principles and of these challenges – and [take them more productive while competencies into a company’s the necessary] steps to make 39% report that their workday leadership development employees from varied isn’t conducive to exercise and strategy and programs. demographic groups feel healthy living. This may be why Employees who describe their comfortable engaging with one LinkedIn, according to its managers as inclusive are another.” Global Talent Trends 2019

I believe that inclusion is the antidote to complexity and the catalyst for innovation. Our ability to seek and value diverse perspectives enables us to better understand and navigate complex problems and create innovative ideas in every corner of our business. – Kirsten Hawley, SVP, Chief Human Resources and Corporate Communications Officer

D&I STRATEGY 2030 - GENDER & RACE EDITION | 50 report, found a 24% increase in diversity changes as the experiences of underprivileged groups the number of people who continue to evolve with societal movements and events. consider flexible work arrangements to be an Consider, for example, the concepts related to gender identity. In important factor when recent years, there’s been an increase in understanding and considering a new job. In awareness around gender identity and individuals who may not addition to serving as a talent identify with the gender they were given at birth – an evolution magnet, flexible work helps that requires education and conversation, and creates employers expand their talent opportunities for employers to evaluate the impact to their pool to diverse talent, business, their workplaces, and, most importantly, their employees. including people with disabilities, military spouses, This means an unrelenting focus on increasing awareness and caretakers, and residents of education throughout all parts of the business, for all employees, remote areas. including those already committed to D&I efforts and outcomes, and those still struggling to understand their place in the In the end, inclusion must be conversation. woven into the fabric of an organization if it wants to retain its diverse employees. As Harvard Business Review indicates, “Simply hiring members of a minority group FLEXIBLE WORK WORKS won’t ensure that they feel STUDIES SHOW FLEXIBILITY IS comfortable or equipped to VALUED BY EMPLOYEES AT ALL build the relationship LIFE STAGES & AGES necessary for advancement. And as companies invest in mentorship and sponsorship programs, making these relationships flourish among 69% 24% workers of differing races may require special effort.” It’s a Of women would have Increase of people who constant process that takes stayed at their consider flexible work time, focus, commitment, and employer if it had a arrangements an continued vigilance to get it flexible work option important job factor right.

INCREASE AWARENESS & 6 EDUCATION TO EXPAND THINKING & BUILD 77% 39% CAPABILITIES Of Millennials believe Of Millennials say their D&I, even within this particular a flexible schedule workday isn't document, is often described as would make them conducive to exercise a journey or continuum. Yet, in actuality and in practice, it is more productive and healthy living an ongoing process that requires continuous awareness and constant attention. In fact, even the way we define

51 | MANY SPIRITS, ONE BROWN-FORMAN It’s important here to note that success will not come from 15 GENDER IDENTITY TERMS TO KNOW simply adding more training, TO BUILD AN INCLUSIVE WORKPLACE for individuals can sit in a conference room for days and still not change their behavior.

GENDER IDENTIY A person's lived experience of being a man, a women, or neither, or somewhere in between Instead, an organization must embed the principles of The way a person expresses their gender GENDER inclusion into every aspect of EXPRESSION externally (e.g. dress, hairstyle, and behavior) the business in a way that shifts SEXUAL The gender(s) someone is attracted to thinking and enables change, ORIENTATION holds leaders accountable, and QUEER A catch-all term when discussing gender encourages employees to identities and sexualities other than straight engage productively with and cisgender individuals whose experiences CISGENDER Describes people whose gender identity and mindsets are different corresponds with their birth sex than their own. It means leaders must have the self-awareness CISHET People who are both cisgender and to honestly acknowledge their heterosexual position on the D&I continuum, NONBINARY Umbrella term for people whose gender while committing to ongoing identity is neither solely male nor solely learning and growth. female GENDERQUEER People who identify as neither just male or just To borrow the words of Michael female, but as both, neither, or some Kimmel, whose words ring true combination for not just gender equality, TRANSGENDER An individual who has a gender identity that is about which he was speaking, not aligned with the sex they were assigned at but all aspects of diversity: birth “Equality is in the interest of GENDER Someone whose gender expression does not countries, of companies... NONCOFORMING adhere to what is considered “normal” for Equality is not a zero-sum their gender game. It is not a win-lose. It is GENDERFLUID Someone who has a gender identity that isn't a win-win for everyone.” fixed but varies over time INTERSEX Umbrella term used to describe individuals whose biological sex varies in some way from “Diversity and our binary understanding of men's and women's bodies inclusion is not a program with a AGENDER / Individuals who identify as not having a GENDER NEUTRAL gender beginning and an end. GENDER When an individual explores their gender It is a business QUESTIONING identity and considers how they want to imperative that is express it critical to our future GENDER Process by which a transgender person begins TRANSITION to live their life in a way that matches their as an innovator.” gender identity, rather than their birth sex – Brian L. Roberts,

Source: LinkedIn, May 20, 2019 Chairman & CEO, Comcast

D&I STRATEGY 2030 - GENDER & RACE EDITION | 52 THREATS POTENTIAL FOR TALENT ACQUISITION 2 BUSINESS DECLINE 3 LOW TURNOVER/SLOW 1 GROWTH LIMITS DIVERSITY The unpredictability of the An organization's ability to beverage alcohol industry, recruit diverse talent is An organization’s ability to which is currently plagued complicated by many factors, increase employee diversity is with the retaliatory tariffs particularly for organizations dependent on its ability to placed on U.S. imports, like Brown-Forman. While make adjustments to its including American Whiskey, there are some organizations workforce composition, which by the European Union and that may attract more than their is driven by two primary other governments in response fair share of a particular labor factors: business growth and to U.S. taxes on imported steel market, this is not a realistic employee turnover. Because, and aluminium – creates a option for Brown-Forman. quite simply, to add diverse volatile, uncertain, complex, talent to a workforce, you need and ambiguous marketplace in With U.S unemployment rates open positions. To provide which companies can and demand for diverse talent opportunities for internal experience dramatic shifts in at an all-time high, talent movement, you need open business results from one year acquisition partners are hearing positions. For organizations to the next. In this anecdotes of employers that with slow growth rates and low environment, organizations are willing to pay above-market turnover, it will take many may struggle to retain (much salaries to recruit diverse talent years to make meaningful less, increase) the resources into their organization. While changes to workforce needed for effective, consistent Brown-Forman has had a composition. Or, in other D&I initiatives. In addition, it premium-pay philosophy for words, reaching representative could prove difficult to ensure all employees, it has not parity among diverse continued focus on D&I as specifically used above-market populations will likely be a priorities shift and leaders salaries to attract diverse talent, multigenerational effort that direct all their energy to which could be a disadvantage. requires commitment, addressing the immediate consistency, and patience. business needs. In addition, location can present a challenge in talent attraction. As a mid-sized U.S. city with few multinational organizations, Louisville, in particular, is not a preferred location for POC or female executives with a professional spouse or partner, though this isn’t as much an issue for global locations or roles where remote work is possible. Certain populations (such as the LGBTQI+ community) may be averse to working in locations (i.e. countries, states, and even cities) where LGBTQI+ rights aren’t as progressive with respect to laws or the court of public opinion.

53 | MANY SPIRITS, ONE BROWN-FORMAN WAR FOR TALENT remote locations or locations spanning consumers of all 4 where popular forms of generations and income levels. communication are blocked However, organizations must In April 2019, the U.S. jobless (e.g. Google in China, and be careful to recognize that the rate fell to 3.6%, its lowest level LinkedIn in Russia), and beliefs themselves are not as since December 1969. It is one employees working in uniform as buying habits, with data point for one month, in production facilities with a social issue often having an one market, yet it illustrates a limited access to equal number of supporters key point in the global war for communications technology. and adversaries. talent: A majority of people, at least in the U.S., are already While there’s no more effective In this environment, often a participating in the labor medium than face-to-face company’s internal posture and market, creating a unique communications, particularly stated goals regarding key supply/demand dynamic. for D&I topics that can often social issues will conflict be personal, sensitive, and directly with the beliefs and As the war for talent rages on, emotionally charged, this is not ideals of their core, consumer employees and job candidates a feasible and realistic option audience, thus forcing an have more negotiating power for most global organizations. organization to wrestle with than ever before. They are also This includes Brown-Forman, the challenge of supporting its equipped with more knowledge which has 17% of its salaried internal audience without and more information than workforce in a location with alienating a critical consumer previous generations, thanks in less than 25 colleagues. segment. large part to advances in Ultimately this means they technology that have given are significantly less likely to rise to the so-called “informed be able to participate in ERG candidate.” events, interact directly with senior leaders, or have Employers must find a way to encounters with colleagues break through the noise, to that think, act, and behave stand out from the competition, differently than they do. and convince qualified, diverse talent that their organization Organizations must find a way is the ideal place to build and to reach employees and engage grow a career. them in D&I conversations, no matter how far they sit from GLOBAL WORKFORCE IS corporate headquarters, how 5 DIFFICULT TO REACH often they interact with senior leadership, or how “connected” While technology has increased they are to technology on a our ability to communicate and day-to-day basis. collaborate across massive geographic barriers, there is POTENTIAL CONSUMER still an inherent disadvantage 6 BACKLASH AGAINST D&I to effectively reaching and OBJECTIVES communicating with a global workforce. As the 2018 Edelman Earned Brand report indicated, belief- These communications barriers driven buyers represent the can stem from multiple factors majority of the population in such as employees working in markets around the world,

D&I STRATEGY 2030 - GENDER & RACE EDITION | 54 STRATEGIC DIRECTION

WHERE WE ARE GOING

VISION MEASURING SUCCESS

Create an environment where With the depth and breadth of importance that D&I will have on leveraging diversity and Brown-Forman’s future, it is critical the company establishes a inclusion occurs naturally, method to gauge its progress. To do this, Brown-Forman will set giving us a sustainable aggressive, yet achievable, diversity and inclusion ambitions, and marketplace advantage. measure its progress towards these ambitions via a number of key performance indicators (KPIs).

MISSION 2030 AMBITIONS

Given the internal and external D&I factors at play, Brown-Forman We will create an inclusive can achieve the following ambitions with a mindful and culture that values diversity continuous focus on recruiting, retaining, and developing diverse and encourages trust, talent: openness, and mutual support so that we can each bring our best self to work. BY 2030, BROWN-FORMAN INTENDS TO HAVE A 1 GENDER-BALANCED GLOBAL SALARIED WORKFORCE, WITH We will build high-performing PARITY AT THE PROFESSIONAL AND LEADER LEVELS AND FEMALE teams comprised of diverse GROWTH AT THE BUSINESS AND EXECUTIVE LEADER LEVELS skills, cultures, and experiences. Brown-Forman set a 2030 ambition that accounts for its current structure, historic statistics and forecasts for turnover, job We will demonstrate diversity creation, and advancement opportunities. By 2030 the company and inclusion leadership intends to grow global female representation at the senior across our business and be leadership level, including Executive and Business Leaders, to 40% recognized internally and from its current level of 34%. These increases represent a stretch externally as one of the best for the organization, yet are still achievable. places to work. Within this same period of time, Brown-Forman aims to have at least 50% of Professional- and Leader-level positions filled by female employees (with female global representation currently at 42% for Leaders and 52% for Professionals).

55 | MANY SPIRITS, ONE BROWN-FORMAN BY 2030, BROWN-FORMAN BROWN-FORMAN WILL 2 INTENDS TO SUBSTANTIALLY 3 IDENTIFY AND ESTABLISH INCREASE ITS RACIAL AND ADDITIONAL D&I AMBITIONS IN 2030 B-F ETHNIC DIVERSITY THE FUTURE, PARTICULARLY ON A COUNTRY/REGION AMBITIONS Brown-Forman intends to SPECIFIC BASIS increase its representation of all key racial and ethnic Recognizing that these demographic groups at all ambitions only begin to touch 40% management levels, with an the important areas Female Senior Leaders increase in the U.S. from 16% encompassed by D&I, B-F intends to grow global to 25%. It is important to note Brown-Forman will continue female representation at that ethnic demographics to add and track additional the senior leadership level vary country by country, and ambitions between FY20 and in some cases it is difficult FY30. This may include broad and/or against the law to ambitions or those particular obtain ethnicity data. to specific locations. For 25% Brown-Forman intends to set example, ambitions may People of Color country-specific ethnicity expand within the U.S. to B-F intends to increase U.S. ambitions (where legal) as data include groups such as representation of key racial becomes available to ensure generations, veteran status, and ethnic groups at all progress is made on a broader, or disabilities. management levels global basis.

We’ve done a wonderful job increasing education and awareness for diversity and inclusion across the organization, and a lot of time talking and debating. It’s time to take the next step. – Lawson Whiting, President and CEO

D&I STRATEGY 2030 - GENDER & RACE EDITION | 56 KEY PERFORMANCE REPRESENTATION: INVESTMENT: MEASURING INDICATORS 2 COMPARING BROWN-FORMAN 4 PAY TO ENSURE EQUAL PAY POPULATION TO THE TALENT FOR EQUAL WORK Progress against POOL (ANNUALLY) (ANNUALLY) Brown-Forman’s D&I Brown-Forman Population Global Competitive ambitions will be measured by vs. Talent Pool: Review Benchmarking of a number of KPIs at varying employee demographics frequencies. These KPIs will Brown-Forman Jobs: Review (gender and ethnicity, when help determine the company’s all jobs against the possible) against the broader advancement along the D&I competitive external market talent pool for each market continuum, as well as help to ensure roles are paid to determine progress identify areas of opportunity, fairly both within the toward representation. The in a timely manner, for market and across definition of talent pool may continued focus and growth. Brown-Forman. vary depending on the type of role and its location.

POPULATION: MEASURING PRESENCE: MEASURING THE ENGAGEMENT: MEASURING 1 GENDER AND ETHNIC 3 GENDER & ETHNIC DIVERSITY 5 EMPLOYEE COMMITMENT TO DIVERSITY (QUARTERLY) OF MANAGEMENT LEVELS BROWN-FORMAN (AS IN COUNTRIES THAT CAN AVAILABLE, BEGINNING FY20) External Hires: Review the BE MEASURED (BI-ANNUALLY) demographics of individuals Engagement + Enablement joining Brown-Forman. Management Level Surveys: Review Total Population: Review Representation: Review Brown-Forman engagement total global population to gender and ethnic diversity and enablement scores compare against baseline. of management levels. across all diversity metrics. Country Population: Review for progress within each location. Reviews of ethnicity may be limited depending on availability (legal or otherwise) of data.

OTHER METRICS 16% 10% Brown-Forman’s Office Supplier Diversity Community of D&I has a number of Percentage of suppliers that Percentage of U.S. additional metrics to Brown-Forman aspires to be community outreach and ensure continued women and/or minority- contributions that support of D&I within owned businesses by 2030 Brown-Forman aspires to the company’s business in locations such as the U.S., go to organizations that partnerships and the the U.K., and Australia where benefit diverse groups surrounding community the process is viewed through a governmental lens

57 | MANY SPIRITS, ONE BROWN-FORMAN STRATEGIC PRIORITIES

HOW WE WILL GET THERE

welcomed Lawson Whiting, brand as it does its global STRATEGIC 21-year company veteran and consumer brands, effectively former EVP, Chief Operating communicating the brand to IMPERATIVES Officer, to the role of Chairman internal and external and CEO on January 1, 2019. audiences, including current Armed with its deep knowledge The transition prompted and potential employees. of the trends impacting D&I – significant reorganization in within the marketplace and many of the company’s regions workplace, for consumers and and functional groups, with employees of all kinds – as well the majority of the company's as the company’s strengths, salaried employees “Crafting a truly weaknesses, opportunities, experiencing a shift in role, effective I&D and threats, Brown-Forman team, or leader as a result. established six strategic strategy is no imperatives that will enable With this transition as a small effort, but the company to achieve its backdrop, there is perhaps no long-term D&I mission and greater time in the company’s the potential vision. These imperatives are history for it to build and benefits of intended to serve as a global communicate a strong, framework to guide the recognizable, and global D&I stronger business company’s decisions and brand, one that is intrinsically performance are thinking at the highest level. tied to the organization’s Yet, as the framework is rolled overall corporate strategy. well worth it.” out to Brown-Forman – McKinsey & Company employees across the world, it To communicate this must be customized to the local commitment, the ELT will cultural and people needs. embed the value of inclusion into the company’s strategic BUILD & COMMUNICATE A themes alongside agility, DEFINE & BUILD 1 RECOGNIZABLE D&I BRAND simplicity, transparency, and 2 INCLUSIVE LEADERS empowerment. The theme will In FY19, Brown-Forman be included in all ELT-level Most leaders are clear on the experienced one of the most communications whenever and definition of diversity, it is the significant transitions in the wherever possible. inclusion portion of the company’s recent history. It equation that they find most bid farewell to long-time Brown-Forman must apply the challenging. Many leaders need Chairman, CEO, and D&I same marketing and brand- help creating an environment champion, Paul Varga, and building acumen for its D&I where team members can be

D&I STRATEGY 2030 - GENDER & RACE EDITION | 58 their best selves and feel understand is that as a black conversations easier to avoid.” valued for their unique talents woman, you can see my colour, The article further suggests and perspectives. and you can say that you see that instead of avoiding my colour, because it shapes conversations about race (or As a Medium article on D&I the life experiences that I’ve other aspects of diversity), trends highlighted, “inclusion had.” which can feel uncomfortable, is now a requirement for being leaders need to expect conflict, a good manager…[There is] a When addressing the value of be open to learning and self- desperate need to fill the gap healthy conversations around reflection, and recognize that that exists in the traditional race specifically, Harvard personal and social identifies manager training approach, Business Review pointed out, can influence workplace where essential managerial “when conversations about interactions. skills don’t include skills to race occur within a larger foster an inclusive work investment in inclusion, those The organization must culture for their teams.” discussions gain a context that communicate (and then helps employees understand reinforce) that inclusion is not Leaders also need to why they’re valuable and an “optional” leadership skill, understand that where they fit into the overall it is a requirement and acknowledging their biases is business strategy. Cordoning baseline expectation of every one of the first steps in off diversity and inclusion leader across the organization, becoming a more self-aware, efforts in a single department at every stage of his/her/their inclusive leader. Moreover, signals those issues aren’t career. Brown-Forman will there is no shame in having priorities, making challenging promote inclusion across its biases, the key is addressing them, learning from them, and ensuring they don’t interfere with business and people decisions.

Howard Ross, a global consultant focused on D&I and cultural competency, highlights this point when he said, “We’ve emphasized that bias is a bad thing as opposed to understanding it’s normalcy.”

Darlene Slaughter, the Chief People Officer, March of Dimes has said, “There’s always a person that raises their hand at workshops and says, “I don’t see colour.” Well, I don’t necessarily believe that. So now I have a trust issue with you. If I ask you what I am wearing, you certainly can see the colour of my clothes. So, what I need for you to

59 | MANY SPIRITS, ONE BROWN-FORMAN workforce by building inclusion competencies in leaders. This WIN THE WAR FOR begins by understanding and defining the skills and competencies 3 DIVERSE TALENT expected, assessing leaders against these competencies, and building the required skills in established and developing leaders In Brown-Forman’s effort to where gaps exist. win the war for diverse talent, it will refine and enhance its The Office of D&I must also strengthen its partnership with talent acquisition and talent Brown-Forman HR teams in support of this objective. Together, management practices so that they must build inclusion competencies into the criteria it can continue to attract considered for internal promotions. They will build the diverse employees who organization’s collective courage to resolve the internal resistance understand that Brown- that still exists within the business. In addition, they must work Forman offers the culture, together to ensure future regional and functional reorganizations career opportunities, and total are intentionally and purposely creating diverse teams. rewards needed to ensure every individual can grow and thrive. It must fully leverage its own global expansion to identify and mobilize diverse talent “The level of collective courage in an throughout the organization, organization is the absolute best predictor of opening them up to new career opportunities in different parts that organization’s ability to be successful in of the company, and the world. terms of its culture, to develop leaders, and to Through all of these actions, Brown-Forman must keep meet its mission.” current and potential employees at the forefront, – Brené Brown, Dare to Lead building an employer brand that will cement the company’s position as an “employer by choice,” not just an “employer of choice.”

To do so, Brown-Forman will continue to build upon the foundation that GTA has developed. It will be critical to identify targets for both slates and hires with full transparency around progress by function/region.

To reach candidates who value D&I, Brown-Forman will need to further develop its “Brand Brown-Forman” and then update employer branding materials and social media channels to showcase the company’s commitment to D&I.

D&I STRATEGY 2030 - GENDER & RACE EDITION | 60 To ensure that all candidates opportunities to increase its workplace great, the more that have a fair opportunity to be Glassdoor reviews related to company gets a leg up on rivals hired by Brown-Forman, it will D&I, as they are seen as much in areas including growth, look for every opportunity to more credible than employer- retention and extra effort.” remove bias from its processes, generated content, including such as gender neutral job requesting anonymous, candid Brown-Forman will continue descriptions, blind resume feedback during ERG events to build a supportive screenings, and diverse and via other D&I-driven infrastructure for employees candidate and interviewer communications platforms. to successfully integrate work slates. The company should demands with their personal also continue to ensure It can also build an employee interests at all stages of their compliance and global adoption advocacy program to capitalize career journey. This may of unconscious bias training. on employees’ social media include developing programs, networks (particularly on such policies, and practices for To expand its talent pool, platforms as LinkedIn), which employees from dual-career Brown-Forman will reevaluate collectively are ten times larger families, finding creative requirements for specific roles, than that of a corporate brand solutions for leaders with a such as previous industry and whose “shares” get double professional spouse to take experience or required the click-through rates of advantage of short-term relocation. It can also increase corporate postings. and/or expat assignments, and its investment in the facilitating connections Management Development RETAIN PROPORTIONAL between employees so that Program with its distributor 4 TALENT they can form smaller, more partner to bring more female intimate networks to lean on for POC into the beverage alcohol It is not enough for career support and guidance. industry. Similarly, to increase Brown-Forman to get talent in educational opportunities for the door, it must find a way to Brown-Forman will make a POC and female STEM students, keep diverse individuals concerted effort to increase the company could fund engaged and committed to the the representation of women scholarships to colleges and company and its strategic and POC among its universities that provide objectives. The business case management levels with a STEM-related degrees. simply requires it, as Fortune’s multipronged approach. It research suggests, “the more will identify leadership teams To communicate its efforts, consistently all people in an where there is only one female Brown-Forman will also explore organization consider their or POC and then work the

61 | MANY SPIRITS, ONE BROWN-FORMAN manager to expand the team, also within each region and cultivated. This includes such or find other ways to add functional team. Additionally, activities as building diverse perspectives. To information will be shared quantitative D&I objectives increase the number of female with ERG steering committees into the annual Performance and POC vice presidents, it will at the conclusion of each fiscal and Growth Planning process establish clear officer title year to support their annual for every Executive Leader, criteria to ensure appropriate strategic planning process, and Business Leader, and Leader, representation in Executive ensure everyone is utilizing the and qualitative inclusion Leader roles and consider same data for communications objectives for every increasing the total number of and planning purposes. Professional. To ensure vice president positions. It will success, it will also conduct also continue to look for ways As part of this effort, the regular reviews of regional to build leadership capabilities Office of D&I must partner and functional groups to and experiences so that when with HR’s People Analytics and measure progress against the positions open, women and Master Data teams to build the stated short-and long-term POC have the skills necessary tools, capabilities, processes, diversity objectives, similar to for the role. and workflow to accurately any other business goals. This report on the company’s will require ELT members to While exit interviews have workforce, ensure compliance partner with their respective been a bit ad hoc in the past, with our people data policy, HR Business Partners and the Brown-Forman will develop a and ultimately, safeguard the Office of D&I to understand robust process to gather, integrity and privacy of the detailed needs, and analyze, and evaluate the individual and aggregate data. progress, of their reasons why employees have organizations. voluntarily left the To assist with the collection, organization, and then maintenance, and integrity of Taking it a step further, systematically address people data, Brown-Forman Brown-Forman will look for identified issues that are will increase efforts to obtain ways to establish within the company’s control. employee gender and ethnicity accountability, not only everywhere permitted by law. internally but externally as LEVERAGE DATA & It will also seek to modify well, evaluating such options 5 TECHNOLOGY TO MEASURE, internal systems to allow for as the Bloomberg Gender- INFORM, & INFLUENCE transgender and non-binary Equality Index, CEO Action for CHANGE gender identification. Diversity and Inclusion, Catalyst’s CEO Champions for BUILD LEADER & Change, EDGE Certification, Brown-Forman must be ORGANIZATIONAL and The United Nations Global transparent regarding its 6 ACCOUNTABILITY INTO LGBTI Standards of Conduct diversity objectives and EXISTING SYSTEMS & for Business. ambitions, as well as reporting PROCESSES progress against its ambitions on a consistent, regular basis. Finally, Brown-Forman will There is, perhaps, no more build accountability into its important step to creating a existing systems and processes more inclusive culture than so that all individual sharing employee diversity contributors and leaders are numbers and ambitions. responsible for building an inclusive environment where This must be done globally, but diversity is celebrated and

D&I STRATEGY 2030 - GENDER & RACE EDITION | 62 STRATEGIC INITIATIVES

To achieve the established, long-term strategic imperatives, the most critical initiatives for the next two fiscal years are as follows:

Build & Communicate a Recognizable D&I Brand

Create and launch a communications plan for Many Spirits, One Brown-Forman: Diversity & Inclusion Strategy 2030 – Gender & Race Edition. Embed D&I more clearly into B-F Values. Engage the Brown-Forman Global Brands and Corporate Communications organizations to drive the development of the Brown-Forman D&I brand. Reevaluate existing D&I mission and vision statements for potential revisions that better integrate Brown-Forman’s business strategy.

Define & Build Inclusive Leaders

Define what it means to be an inclusive leader at Brown-Forman; determining the competencies and metrics required to measure individual success. Reassess all current leadership and development programs to ensure that inclusion competencies play a meaningful role in program design. Develop learning curriculum for key inclusion competencies outside existing leadership development programs (e.g. emotional maturity, active listening, conflict resolution, etc.). Build inclusion competencies into performance reviews, promotion criteria, and officer nominations. Increase % of employees participating in cross-functional, cross-border, or cross-market assignments, thus expanding their exposure to different ways of working and thinking. Increase participation of middle managers in D&I initiatives, including ERG steering committees, D&I councils, and the like.

Win the War for Diverse Talent

Set and track annual diversity slate and hiring metrics by function/region. Build a stronger corporate brand – “Brand Brown-Forman” – that appeals to candidates who value D&I; leverage branding materials and social media to showcase D&I commitment. Reduce bias in the talent acquisition process by ensuring that hiring processes are neutral and all interviewers have attended a program that minimizes bias and improves hiring decisions. Expand talent pool by reevaluating specific role requirements, investing in local feeder programs, as relevant to local needs.

63 | MANY SPIRITS, ONE BROWN-FORMAN Retain Proportional Talent

Continue to assess total rewards programs to ensure a supportive infrastructure for all employees at every stage of their career journey. Refine promotion and development processes to ensure that women and POC have the skills necessary to move to senior leadership roles. Develop a robust exit interview process to better understand voluntary departures; subsequently develop retention solutions that address identified gaps.

Leverage Data & Technology to Measure, Inform, & Influence Change

Set, track, and communicate diversity ambitions by function/region. Identify markets where tracking ethnicity data is legal and begin the collection process. Develop bi-annual reporting system for all employees to see progress against diversity ambitions.

Build Leader & Organizational Accountability into Existing Systems & Processes

Build D&I objectives into the annual Performance and Growth Planning process for every people leader. Build D&I objectives into the annual Performance and Growth Planning process for every Professional. Conduct regular reviews of regional/functional groups to measure progress against stated short- and long-term D&I objectives.

“As a global society, we all need to recognize that every person counts. That all people deserve and can have a great experience at work. And that when they do, there’s a ripple effect—as those employees leave good days on the job to be better parents, community members, citizens.” – Fortune

D&I STRATEGY 2030 - GENDER & RACE EDITION | 64 APPENDIX

ACKNOWLEDGEMENTS & SOURCES

THANK YOU

A work of this magnitude could not have been possible without the dedication, energy, creative ideas, passion, and support of Brown-Forman employees across the world. Developing Many Spirits, One IN APPRECIATION Brown-Forman has truly been a collaborative effort that showcased the best of our Sarah Bovine company and the importance STRATEGY Hanna Buckner of our core values. TEAM Mike Dunleavy Thank you to everyone who offered their talents and OFFICE OF Paula Caffer insights to the project. A DIVERSITY & Donna Halkyard* special thanks to Sarah Bovine, INCLUSION Tammye Henderson the primary author of the Sheila Irvin strategy, and Hanna Buckner, Raylene Pollio our ever-reliable and almost Cynthia Williams* magical researcher. Our appreciation extends to the GLOBAL DIVERSITY Alex Alvarez Office of D&I and the Global COUNCIL Marshall Farrer Diversity Council for their Azucena Garibay support and review during the John Hayes development process. Thomas Hinrichs Finally, thank you to all Michael Masick employees for your support of Katarzyna Obuchowicz this strategy and the road Crystal Peterson ahead. We can't wait to watch *ODI Members Noted Above our Many Spirits continue to come together as One Brown-Forman.

– Ralph, Kirsten, and Chris

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Benjamin Artz, Amanda Goodall and Diversity Best Practices, Diversity Primer Joseph Barberio, “This Comic Perfectly Andrew J. Oswald, “Research: Women Ask Explains the Mental Load Working Mothers Bear,” Working Mother, for Raises as Often as Men, but Are Less Ed Frauenheim, “Why Nike’s Diversity Likely to Get Them,” Harvard Business November 2, 2018 Disclosure Is Just the First Step,” Fortune, Review, June 25, 2018 May 16, 2016 Karen Brown, “To Retain Employees, Focus on Inclusion - Not Just Diversity,” BrandTrack 4 Quarters ending FY19Q3; TDS Eric Morath and Sarah Chaney, “Jobless drinkers; all markets LDA-49; n>1000 Harvard Business Review, December 4, Rate Falls to Lowest in Nearly 50 Years as 2018 Buck Gee and Denise Peck, “Asian Employers Ramp Up Hiring,” Americans Are the Least Likely Group in The Wall Street Journal, May 3, 2019 Kate Gibson, “At Goldman Sachs, the the U.S. to Be Promoted to Management,” future is half female when hiring Harvard Business Review, May 31, 2019 Erika Irish Brown, “Why employee workers,” CBS News, March 18, 2019 resource groups still matter,” Bloomberg, Katie Levinson, “What is Employee Cale Guthrie Weissman, “Google Walkout: July 31, 2017 Why employees are making these 5 Advocacy and How Do Marketers Win With It?,” LinkedIn Marketing Solutions demands,” Fast Company, November 1, 2018 Blog, March 13, 2018

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67 | MANY SPIRITS, ONE BROWN-FORMAN DIVERSITY & INCLUSION TEAM STRUCTURE

RALPH DE CHABERT SVP, Chief Diversity, Inclusion, & Community Relations Officer

CYNTHIA WILLIAMS DONNA HALKYARD SHEILA IRVIN VP, Director of D&I Director, D&I - International Senior Executive Assistant

PAULA CAFFER Manager, D&I

TAMMYE HENDERSON Manager, D&I

RAYLENE POLLIO Manager, D&I

D&I STRATEGY 2030 - GENDER & RACE EDITION | 68