The Corporate “Me”: How Fortune 500 Companies Represent Diversity in Non-financial Reports

1. By: Audrey Ballinger The Corporate “Me”: How Fortune 500 Companies Represent Diversity in Non-financial Reports

2. What is a Corporate Report? Financial Report Non-financial Report Not Required Company’s responsibility for developing a Sustainable economy Environmental isssues Social Issues • Required by law • Federally established guidelines • Company’s formal record • Overview of profitability and financial condition

3. Non-Financial ReportCSR “Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” – World Business Council for Sustainable Development Social Sustainability/Responsibility Report 30-100+ pages Communicate to shareholders and customers Transparency and credibility Organizations have a great ability to exert positive change on the word’s economy, environmental and social conditions Leads to improved sustainable development, because it allows organizations to measure and improve their performance

4. This study is a… -content analysis of -ten Non-financial reports of -Fortune 500 CompaniesTo examine… -how America’s top corporations -represent DIVERSITY Thesis Overview:

5. Literature Review Diversity “a company that values diversity and employs a diverse workforce retains a competitive edge.” (Sue, 1991) • Derald Wing Sue, 1991 • -American businesses have to prepare for the complexity of the global economic world • Organizational behaviors differ internationally and a lack of understanding can lead to major loss in business • Workforce should reflect the population • Everyone in the organization needs to be comfortable dealing with issues that arise with a diverse population

6. Diversity Training “Diversity Training is no longer perceived as the socially responsible thing to do; instead, it is now viewed as a strategic business objective with the capability to make the organization more competitive.” (Holladay, Knight, Paige, Quinones, 2003) • Diversity Training has become a necessity for multinational corporation’s survival and success in capturing and retaining a diverse workforce (Wentling and Palma-Rivas 1999) • Three Approaches for diversity training (Plummer, 1998) • 1. Abiding Law • - Affirmative Action, Equal Employment Opportunity etc. • 2. Valuing Differences • -Improve work relations • 3. Managing Diversity • -Improving corporate productivity and teamwork

7. Training Sessions:only one component “(diversity training) in and of itself is unlikely to contribute to overall organizational change.” (Arai, Wanca-Thibault, Shodley-Zalabak, 2001) 2006 Study by Dobbin, Kalev and Kelley “Best Practices or Best Guesses? Assessing the Efficacy of Corporate Affirmative Action and Diversity Policies” Found the most effective diversity training structures contained: -Accountability (annual evaluation of specific goals) -Authority (appointment of staff to monitor diversity) -Expertise (various departments to oversee diversity initiatives)

8. Sustainability Reports Global Reporting Initiative (GRI) • GRI is the most widely used sustainability reporting framework • Most recent guidelines developed in 2006: Third Generation “G3” • Can be used to measure performance of an organization with respect to laws, norms, codes, performance standards and voluntary initiatives • Increasing number of companies are creating responsibility reports

9. CSR Reporting Statistics According to the University of Amsterdam and KPMG’s Global Sustainability Services Fortune 500 Companies issuing separate corporate responsibility reports in 2005 -33% of top 100 Fortune 500 Companies -52% of the top 250 Fortune 500 Companies

10. Mead (1934) Theory of Self “The Self, the I and the Me” Self is socially constituted by adopting the attitudes and perspectives of others “Body” – can act without the self being involved “Self” – separate from the body, experienced indirectly through communication with others “I” (subject) – initiates action and represents all of the possible choices of behavior “Me” (object) – social self who is aware of cultural norms, attitudes and values “conversation of gestures” – when one communicates they expect certain responses in others and will change action based upon the responses by other

11. Linking Theory to Study The Corporate “Me” “Me” (company) – decides what to report based on reactions from previous reports or the “conversation of gestures” Following the GRI guidelines will become an expectation. Diversity Training- works to change negative attitudes of the trainees acquired from previous socialization - Generalized other - Understand their “Me” - Use self reflection to create a culturally sensitive environment

12. Methodology Original study - “What are the top diversity leaders in corporate America doing to promote/implement diversity within their companies?” • Survey - closed and open questions at www.surveymonkey.com • Sample – DiversityInc magazine “2007 Top 50 Companies for Diversity” • A member of the company that deals directly with diversity initiatives was sent an email with a link to the survey

13. A content analysis of non-financial corporate reports to examine how America’s top corporations are representing diversity • SAMPLE • Fortune 500 Companies 2007 • CorporateRegister.com Information was coded from 10 CSRs that had direct correlation to the company’s diversity initiatives or reporting practices

14. Findings • 90% used the GRI guidelines • 50% mentioned using a third party to monitor the validity of the report • 80% mentioned having programs to help the underserved populations in global communities

15. Adapting to Local Population • 60% mentioned using language adaption to communicate • 50% acknowledged the awareness of cultural differences in each community • 40% mentioned providing diversity training for employees to help them understand how to work with the indigenous population • ConocoPhillips “Sustainable Development Report” “The United States and many countries have laws and regulations regarding business gratuities that may be accepted by government personnel. Because entertainment and business gifts are an important part of doing business in some cultures, it requires special training to determine to what extent these laws are permitted.”

16. Employees 50% of companies provided statistics on the number of women and minorities they employ 60% provided information on women employed in company hierarchy 40% provided information on minorities employed in company hierarchy

17. Other forms of diversity were only briefly mentioned in either a definition of diversity or employee networks that the company supports 80% of reports referenced online links for more information about company diversity 70% mentioned providing some type of diversity training

18. Discussion The sustainability reports promote transparency and accountability of a company’s policies and understanding of diversity Although 90% of reports used GRI guidelines, the information was not consistent The CSR include selected positive information they are eager to boast about Standardization must be required before the information provided can be taken as a serious program of cultural awareness rather than a marketing tool Future: more reliable audits need to be administered, the progress of programs need to be tracked and more measurable information needs to be provided

19. Discussion Since the information that companies choose to report is voluntary, the amount of information regarding diversity can provide insight as to weather a company values diversity. Every company mentioned improving diversity as a goal, yet only 50% gave statistical information regarding the amount of women and minorities in the workforce. It can be inferred that America’s top companies realize that diversity is not currently a strength and there is need for improvement. Trends in Corporate Sustainability Reports are paving the path towards more socially responsible and aware companies.

20. Strengths and Weaknesses • Sample Size • Not a representative sample of Fortune 500 Companies • No Laws / Monitors • Difficult to compare • Freedom of reporting provides insights regarding the extent to which each company values diversity • Positive Skew • Aim to please

21. Future Studies Make Connections to Diversity Leaders -attend a conference -face to face interviews Identify what a company is doing for their diversity initiatives vs. what they are reporting