Diversity in Corporate Governance
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DIVERSITY IN CORPORATE GOVERNANCE A Quantitive Analysis of Diversity and Inclusion in Texas’ Fortune 1000 Companies March 2018 DIVERSITY IN CORPORATE GOVERNANCE A Quantitative Analysis of Diversity and Inclusion in Texas’ Fortune 1000 Companies with an analysis comparing data from 2016 to 2018 and an analysis of the Oil & Gas Industry March 2018 FOREWORD In the last twenty years there has been an abundance of evidence showing that diversity promotes growth, creativity, and business innovation. We have also seen the disastrous consequences of homogenous thinking, as revealed during the national economic recession of 2008. We are fortunate to live in Texas, one of the most diverse states in the country, and that diversity offers us the potential for growing our markets, improving the ways we work, and leaving better lives for future generations. However, today this potential for growth and improvement is still not fully realized. We at the National Diversity Council invite you to review and contemplate this research on diversity in the corporate governance of Texas companies. In this report you will find that our workforce is highly diverse, but women and People of Color are not succeeding at comparable rates to their white and male peers. The executive leadership and board membership of our most successful companies are still largely homogenous, as demonstrated by the lack of racial, ethnic, and gender diversity in those leadership positions. Though all companies need to implement organizational and structural changes, we can improve the economic and social successes in our state and nation by working together to increase diversity and inclusion in our corporations. In this report you will find data on the diversity of corporate executive leadership and board membership broken down into five areas. Three of these areas assess the race, ethnicity, and gender data for the 101 Fortune 1000 companies located in Texas, as compared with the demographic data for the state. The fourth area breaks down these companies regionally: Harris and Dallas/Fort Worth Counties. The last area is an industry assessment in workforce and corporate governance diversity of Oil and Gas—the largest industry in the state. We also compare corporate governance diversity data from 2016 to 2018 using one of our reports titled, “Workforce Diversity and Corporate Governance, August 2016.” Texas is one of the most diverse states in the country, but without intentional and strategic intervention we will not be able to attain diversity in corporate governance. Join us in working towards making Texas an inclusive and economically thriving state. Dennis Kennedy Angeles Valenciano Founder and Chairman Chief Executive Officer National Diversity Council National Diversity Council 1 TABLE OF CONTENTS EXECUTIVE SUMMARY 4 COMPANIES SURVEYED 5 • Breakdown by County 6 TOP 25 MOST DIVERSE FORTUNE 1000 COMPANIES 8 • Top 25 of 2016 & 2018 9 METHODS 10 RACIAL DIVERSITY CORPORATE GOVERNANCE DATA 13 EXECUTIVE LEADERSHIP 14 BOARD MEMBERSHIP 15 EXECUTIVE LEADERSHIP, 2016 – 2018 16 BOARD MEMBERSHIP, 2016 – 2018 17 HISPANIC/LATINO DIVERSITY CORPORATE GOVERNANCE DATA 19 CORPORATE GOVERNANCE 20 GENDER DIVERSITY CORPORATE GOVERNANCE DATA 22 EXECUTIVE LEADERSHIP & BOARD MEMBERSHIP 23 • Gender Diversity by Race 24 CORPORATE GOVERNANCE DATA, 2016 – 2018 25 EXECUTIVE LEADERSHIP & BOARD MEMBERSHIP, 2016 – 2018 26 CORPORATE GOVERNANCE, 2016 – 2018 27 2 COUNTY DIVERSITY HARRIS • Executive Leadership and Board Membership Data 29 • Corporate Governance Data 30 • Racial Diversity 31 • Gender Diversity 32 DALLAS/FORT WORTH • Executive Leadership and Board Membership Data 33 • Corporate Governance Data 34 • Racial Diversity 35 • Gender Diversity 36 OIL & GAS DIVERSITY COMPANIES SURVEYED 38 EXECUTIVE LEADERSHIP AND BOARD MEMBERSHIP DATA 39 CORPORATE GOVERNANCE DATA 40 RACIAL DIVERSITY 41 GENDER DIVERSITY 42 KEY FINDINGS AND CONCLUDING REMARKS 45 REFERENCES 46 3 EXECUTIVE SUMMARY This report examines the 2018 diversity composition of executive leadership and board membership (“corporate governance”) of Texas Fortune 1000 companies. We researched biographical data on the race, ethnicity, and gender of those comprising the corporate governance for the companies, which we acquired from various online sources, including Bloomberg, Wall Street Journal, Reuters, and the U.S. Census. We were able to collect and analyze data for 101 Fortune 1000 companies. We found that the overwhelming majority of those in executive leadership and board members are non-Hispanic white males. This was true across Texas, in Harris and Dallas/Fort Worth counties, and across industries, especially within the Oil & Gas industry. The data is not surprising and confirms the need for organizational change in the diversity and inclusion arena. This study shows that the representational gap between non-Hispanic white males and People of Color is large and significant. In most cases Women of Color constitute only 1-2% of corporate governance, whereas non-Hispanic white males constitute on average 80%. Representation from the Hispanic/Latino populations resembles that of the Women of Color populations, accounting for, on average, between 1-2% across executive leadership and board membership positions. This average is contrary to the fact that the Hispanic/Latino population made up over 39% of all Texans in 2016. White women make up the largest historically minoritized group, constituting between 12 to 17% of corporate governance across all sectors. In comparing board member diversity to executive leadership for 2018, we found that board diversity is slightly higher: by 1-2% for Women of Color and 2-3% for Men of Color, and between 2-3% for women generally. Between 2016 and 2018, there was no discernable improvement for diversity. With regards to racial and gender demographics of companies located in Harris and Dallas/Fort Worth counties, we found that companies headquartered in Dallas/Fort Worth had on average almost 5% greater gender diversity than companies headquartered in Harris. Given that the Oil & Gas industry forms a large part of the Texas Fortune 1000 companies, we analyzed the racial and gender demographics of the Texas Oil & Gas industry. We found that over 70% of the Oil & Gas extraction industry workforce is made up of women, but women constitute only 14% of the overall industry’s executive leadership. The gender disparity is larger than that found for race and ethnicity: People of Color constitute 30% of the Oil & Gas extraction industry workforce, but only about 6% of the overall industry’s corporate governance. To conclude this report, we provide a summary of key insights, as well as two areas of opportunity. The first area of opportunity is targeting the Board of Directors for increasing corporate governance diversity. The second area is to change the language around “predominately white and male industries” by highlighting actual workforce diversity and the problems associated with an organizational culture and talent management structure that systemically favors one group over others. 4 COMPANIES SURVEYED Adams Resources Group 1 Automotive Alliance Data Systems Halliburton American Airlines HCC Insurance Holdings American National Insurance Company HollyFrontier Anadarko Huntsman Andeavor iHeart Media Apache Insperity AT&T Jacobs Atmos Energy JC Penney Baker Hughes KBR Benchmark Electronics Kimberly-Clark Brinker International Kinder Morgan Buckeye Partners Kirby Builders FirstSource Lennox International Calpine Linn Energy Cameron International Marathon Oil Celanese Michaels Stores Center Point Energy MRC Global Cinemark Holdings National Oilwell Varco Comerica Incorporated Nationstar Mortgage Holdings Commercial Metals Neiman Marcus ConocoPhillips Nexeo Solutions Crestwood Equity Partners LP Noble Energy Crown Castle International NuStar D.R. Horton Oceaneering Darling Ingredients Oil States Dean Foods Oxy Dell Technologies Par Pacific Holdings Denbury Patterson UTI Distribution NOW Phillips 66 Dr Pepper Snapple Pioneer Natural Resources Dynegy Plains GP Holding Enbridge Primoris Services Enlink Midstream Quanta Services, Inc. Enterprise Product Partners Rent a Center EOG Resources Rush Enterprises EP Energy Sabre Exxon Mobil Sally Beauty Flowserve Service Corporation International Fluor Southwest Airlines FMC Technologies Southwestern Energy Fossil Group Stewart Gamestop Sunoco LP Genesis Energy Superior Energy Services 5 Sysco United Services Automobile Association Targa Resources Valero Energy Tenet Healthcare Waste Connections Texas Instruments Waste Management Torchmark Westlake Chemical Transfer Energy Willbros Trinity Industries Surveyed Companies by County HARRIS Adams Resources Kirby American National Insurance Company Linn Energy Anadarko Marathon Oil Apache MRC Global Baker Hughes National Oilwell Varco Buckeye Partners Nexeo Solutions Calpine Noble Energy Cameron International Oceaneering Center Point Energy Oil States ConocoPhillips Oxy Crestwood Equity Partners LP Par Pacific Holdings Crown Castle International Patterson UTI Distribution NOW Phillips 66 Dynegy Pioneer Natural Resources Enbridge Plains GP Holding Enlink Midstream Quanta Services, Inc. Enterprise Product Partners Service Corporation International EOG Resources Southwestern Energy EP Energy Stewart FMC Technologies Superior Energy Services Genesis Energy Sysco Group 1 Automotive Targa Resources Halliburton Trinity Industries HCC Insurance Holdings Waste Connections Insperity Waste Management KBR Westlake Chemical Kinder Morgan Willbros