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Changing the Landscape of Corporate Leadership: “Know when to hold ‘em, Know when to fold ‘em.”

April 29th, 2013 No comments

By: Marcia Leach

Blog Category: Minorities in the Corporate World

Changing the Landscape of Corporate Leadership: “Know when to hold ‘em, Know when to fold ‘em.”[1]

In May of 2011, the Alliance for Board Diversity (“ABD”) Census reported that between 2004 and 2010, Caucasian men in the Fortune 100 corporations gained 32 corporate board seats while African American men lost 42, and women, particularly minority women, had no appreciable increase in corporate board seats.[2] The census also found that Fortune 500 boards were even less diverse than the Fortune 100 boards.[3] Ilene H. Lang, Chair of ABD and President and CEO of Catlyst, called the results “staggering”, in light of today’s labor market having “. . . so many qualified women and minority candidates available for board service.”[4] Thus, the results confirm that in order to change the landscape of corporate leadership, proponents for the diversification of corporate boards need to change their strategic approach by shifting away from arguments “based on social and moral grounds” to “market-based” arguments supporting diversity on corporate boards.”[5]

Evan Roberts in his law review article, Corporate Leadership and the Unfinished Diversity Movement, found that “[D]espite their symbolic rhetoric, these rationales [social and moral grounds] do not appear to energize the business community enough to inspire broad changes in policy.”[6] In response to the judicial opinions in Bakke and Grutter where the majority of the Supreme Court justices “indicated skepticism over arguments for affirmative action based on the need to remedy past (or even present) societal discrimination,” market based arguments offer a way for advocates to utilize the broad ‘diversity’ rationale that eliminated strict consideration of race.”[7] According to Roberts, the “business case for diversity” makes sense in the present social and legal climate and is increasingly playing “a major role in the debate over why firms should seek to accelerate racial and gender integration.” [8]

One study by The Council of Institutional Investors (“CII”) offers “two sale-related” arguments for corporate boards to diversify.[9] First, diverse boards have a “deeper understanding of minority purchasing priorities and better connections to various minority communities” where there has been new growth in marketing opportunities.[10] Second, diverse boards have a better understanding of cultural differences in the global marketplace.[11] “Talented minority candidates can more easily plug themselves into markets where they have an understanding of the cultural differences of the market, relative to their white peers.”[12]

For diversity advocates, surely the time has come “to know when to hold ‘em and know when to fold ‘em” if they are going to change the corporate landscape.[13]

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

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*Marcia Leach is a staff member on the Widener Journal of Law, Economics & Race. To learn more about Marcia, click here to view her page.

[1] Kenny Rodgers,The Gambler,(Dream Catcher 1978)

[2] Women and Minorities lose Ground on Fortune 500 Corporate Boards, Diversity Employers, © 2011 by IMDiversity, Inc. http://www.diversityemployers.com/index.php/career-news/137-board-diversity, accessed 3/3/2013.

[3] Id.

[4] Id.

[5] Evan Roberts, Corporate Leadership and the Unfinished Diversity Movement, 14 Duq. Bus. L.J. 277, 280-81 (Summer 2012).

[6] Id. at 280-81.

[7] Id. at 281

[8] Id.

[9] Id. at 282.

[10] Id.

[11] Id.

[12] Id.

[13] Rodgers, supra note 1.

WJLER Symposium: “Diversity in the Legal Profession”

April 22nd, 2013 No comments

Widener Journal of Law, Economics & Race Upcoming Symposium:

“Diversity in the Legal Profession”

April 25, 2013, 6-9:15 pm

Widener Law Delaware Campus (Vale)

Widener Law Harrisburg Campus (Televised in A180)

Click on the Flyers below to learn more information on the upcoming symposium.

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Shattering the Glass Ceiling Through the Entrepreneurial Spirit

April 22nd, 2013 No comments

By: *Carla Arias

Blog Topic: Minorities in the Corporate World

Shattering the Glass Ceiling Through the Entrepreneurial Spirit

American society has vastly changed in recent decades. When glancing over our political and corporate structure one may assume that the idea of a “glass ceiling” has faded into obscurity. Currently, we have an African American president, a Hispanic American woman on the Supreme Court and minorities holding powerful positions all over the corporate and political arenas. However, it must be understood that although racial lines in our country have been blurred, advancements such as these are typically the exception not the rule.

To better understand the difficulties faced by women and minorities in the workforce we must first define the term “glass ceiling”. Webster’s dictionary has defined it as “an intangible barrier within a hierarchy that prevents women or minorities from obtaining upper level positions.”[1]   This invisible barrier has created a political and corporate society, which hinders the advancement of minorities and woman, thus preventing them from reaching their full potential in their respective fields. A 2010 Board Diversity Census found that Caucasian men hold the majority of high-ranking positions on corporate boards for fortune 500 companies throughout our entire country.[2]  The study also stated that the number of positions held by women and minorities is at a standstill, with no steady advancement, although they are extremely qualified to hold superior titles.[3]

The primary question then becomes, how can minorities or women break through this invisible barrier? As stated above, studies have shown that minorities and women being affected by this barrier do not lack the educational background and drive to advance.[4]  Therefore, one must find another route to combat the glass ceiling. It is my opinion that this can be done through the use of the entrepreneurial spirit that has helped our country succeed since the founding of the thirteen colonies. We are a country created by the ability to look past any barrier, which may stand in the way of formulating a governmental system, innovation or societal advancement.  From the settlers to the trailblazers to the huddled masses, the new American pioneer continues the legacy of the entrepreneurial spirit. This same method of thinking is being used today to further the roles of minorities and woman in all branches of government and the corporate world.

When looking at some of the most powerful companies throughout our country, it becomes evident that immigrants and minorities have been able to break through any invisible barrier to formulate fortune 500 corporations, which greatly impact our economy. Berry Gordy, the founder of Motown Records, has made tremendous contributions to the music and entertainment world and has become one of the most influential entrepreneurs in the world.[5]  One cannot lose sight of the fact that he is an African American man. He falls directly into a group impacted by the glass ceiling. However, through entrepreneurial drive, he shattered through that invisible barrier and was able to run a business in which he held the most powerful position. This route used to combat any sort of limitations based on race and gender can be seen time and time again. Jerry Yang, the co-founder and former CEO of Yahoo! Inc. is a Taiwanese born American[6]  who in theory should have been hindered by the glass ceiling but was not. He was able to use his ideas and drive to become one of the most successful entrepreneurs in the world.

The idea of using the entrepreneurial spirit to go around the glass ceiling is not a novel one, but one needs to understand that it is not strictly geared towards those wanting to engage in fortune 500 companies. This is an idea that every American, male, female, or minority can grab on to as a way to reach their full potential. I am a Hispanic American female; some may say I fall into both groups of people who are affected by the glass ceiling; but I am not afraid. I have seen individuals from all walks of life come up with an idea that has potential. They then take that idea and develop it into a business, whether it is a restaurant, a store, a daycare, a medical practice, or even a television show, which might eventually lead to owning their own television network. Although the glass ceiling may still exist, but just as the oceans and the dense wilderness are inadequate to hinder the entrepreneurial spirit, the glass ceiling also cannot hinder the entrepreneurial spirit and it will not prevent women and minorities from reaching their goals. The sky is the limit!

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

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* Carla Arias is a staff member on the Widener Journal, Economics & Race. To learn more about Carla click here to visit her page
[1] “Glass Ceiling.” Merriam-Webster Online Dictionary. 2013. http://www.merriam-webster.com (4 March 2013).
[2]  Alliance for Board Diversity, Women and Minorities Lose Ground on Fortune 500 Corporate Boards, IMDiversity, (March 4, 2013); http://imdiversity.com/villages/women/women-and-minorities-lose-ground-on-fortune-500-corporate-boards/.
[3] Id.
[4]  Id.
[5]See generally Motown Museum, http://www.motownmuseum.org/story/berry-gordy/ (for a biography on the life and works of Barry Gordy throughout his career as the chairman of Motown Records.)
[6] See generally Forbes, http://www.forbes.com/profile/jerry-yang/ (for a biography on the works of Jerry Yang as the co-founder of Yahoo!,Inc.)

WJLER Symposium: “Diversity in the Legal Profession”

April 15th, 2013 No comments

Widener Journal of Law, Economics & Race Upcoming Symposium:

“Diversity in the Legal Profession”

April 25, 2013, 6-9:15 pm

Widener Law Delaware Campus (Vale)

Widener Law Harrisburg Campus (Televised in A180)

Click on the Flyers below to learn more information on the upcoming symposium.

Harrisburg Flyer (larger view)                                            Delaware Flyer (larger view)

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A Call for Change in Corporate Diversity Programs

April 15th, 2013 No comments

By: *Melissa Chapaska

Blog Topic: Minorities in the Corporate World

A Call for Change in Corporate Diversity Programs

Diversity is essential to a corporation’s ability to compete in today’s economy. While corporations seem to have acknowledged the importance of diversity with “diversity days” and other programs intended to promote racial diversity, these programs have failed to create an increase in diversity among corporate leadership positions. For instance, as noted in a recent MSNBC blog, despite the Hispanic population’s growth in number and influence, Hispanics comprise only about 3% of corporate board members and 1.2% of Fortune’s 500 CEOs.

Furthermore, according to an article by the Center for American Progress, African Americans and Asians are also extremely underrepresented in corporate leadership positions (constituting only 0.8% and 1.8% of Fortune’s 500 CEOs, respectively). These startling low numbers suggest that despite corporations’ best intentions, corporate diversity programs provide the appearance of corporate diversity without actually promoting diversity in the leadership of these corporations. As a result, it would be prudent for corporations to reconsider the effectiveness of their ongoing diversity programs and take more proactive steps in recruiting and promoting minority workers from within, in order to best compete in today’s diverse economy.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

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*Melissa Chapaska is a staff member on the Widener Journal of Law, Economics & Race. To learn more about Melissa, click here to visit her page.
References
Lili Gil Valletta, Pope Francis: A reminder of Latino priority for corporate America and the GOP, MSNBC (March 14, 2013), http://tv.msnbc.com/2013/03/14/pope-francis-a-reminder-of-latino-priority-for-corporate-america-and-the-gop/.
Crosby Burns, Kimberly Barton & Sophia Kerby, The State of Diversity in Today’s Workforce, Center for American Progress (July 12, 2012), http://www.americanprogress.org/issues/labor/report/2012/07/12/11938/the-state-of-diversity-in-todays-workforce/.

Why Are There So Few Minorities Represented in the Corporate World?

April 8th, 2013 No comments

By: *Kayla Butz

Category: Minorities in the Corporate World

Why Are There So Few Minorities Represented In the Corporate World?

This blog seeks to answer the question, why are there so few minorities represented in the corporate world? According to the Boston Consulting Group, “[m]arked and measurable progress has been made in minority business development” since the topic first came into the spotlight to the U.S. Department of Commerce through reports conducted in the 1980s by The New Strategy for Minority Businesses and Minority Business Enterprise Development. However, the report goes on to say, the next step is “moving from presence to prominence” on growing larger and self-sustaining minority businesses.[1]

Not everything is positive in regards to corporate diversity. Many people have speculated as to the reasons why there are fewer women and minorities in the corporate world. Law professor, Randolph McLaughlin, has commented on this issue. His observations, while working with clients, were that minority executives were given less responsibilities than their white counterparts and were also paid less.[2]  This could be one reason as to the rise in minorities and female workers leaving their jobs in the corporate world.  In addition,  study published in the Journal of Applied Psychology revealed that, “women quit more than men; African Americans, Hispanics and Asian Americans quit more than whites; and that minority women quit more than both whites and men of their own ethnicity.”[3]  The study also explains that minority workers are new to the corporate world and “are struggling disproportionately with newcomer challenges of adapting to a new workplace.”[4]  Ultimately, these are just speculations because the study focused on who left and not why they left the workplace.

Despite this disparaging phenomenon, there are companies that have been successful in fostering diversity in the workplace. Fortune 500 did an article on the 50 best companies for minorities.[5]  The companies that made the list, “are firms that make an effort not only to hire minorities but also to retain them and promote them through the ranks.”[6]  In addition to interacting with minority communities, these companies make management accountable for diversity efforts. This may be why they have not experienced the high turnover rates as other companies. Ultimately, companies that are best for minorities “are really those in which people of color feel that they belong–at all levels–everyday.”[7]

For a continued diverse workforce, there needs to be a match in diversity among management ranks.[8]  One way to foster the growth of diverse management among companies is to encourage minority business development. A minority business is one that is at least 51 percent owned and controlled by members of minority groups.[9]  While the growth in minority businesses has been dramatic, the total number of businesses still leaves minorities underrepresented in this area.[10]  The reason for the expanse of minority businesses can be attributed to federal government legislation programs.[11] Besides the growing minority population, the importance of expanding minority businesses includes the fostering of economic development.[12] The Boston Group’s report indicates that minority-owned businesses could serve as a powerful infrastructure for inner-city economies, which ultimately will contribute to the overall economic growth of the United States.[13]

The benefits for creating a more diverse corporate world are clear. The problem is making that happen. Even though there have been improvements made, “history takes time.”[14]  As the federal government continues to pass legislation that promotes businesses and companies owned by minorities, like those listed in the Fortune 500, which continue to work to diversify their firms, the scarcity of minorities in the corporate world will no longer exist.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

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*Kayla Butz is a staff member on the Widener Journal of Law of Economics & Race. To Learn more about Kayla Butz click here to visit her page.

[1] The New Agenda for Minority Business Development. Boston Consulting Group, (June 2005), www.kauffman.org/uploadedfiles/minority_entrep_62805_report.pdf
[2] Farrokh Hormozi & Randolph McLaughlin, Minorities Gain in Corporate World, THE JOURNAL NEWS (April 28, 2011), http://pressroom.blogs.pace.edu/2011/04/28/minorities-gain-in-corporate-world-lohud-com/.
[3] W.P. Carey, Women and Minorities’ High Quit Rates Make Corporate Diversity Difficult (April 27, 2007), http://knowwpcarey.com/wpc/25/Engaged-in-the-Totality-of-the-Profession-Conference-Leadership/1343/
[4] Id. at 3.
[5] Id. at 3
[6] Id.
[7] Id.
[8] Id.
[9] New, supra note 1, at 5.
[10] Id.
[11] Id. at 7.
[12] Id.
[13] Id.
[14] Daniels, supra note 5.