Diversity initiatives continue to make inroads in American corporations. According to a 1998 study by the Society for Human Resource Management in Alexandria, Virginia, three out of four Fortune 500 companies have formal diversity programs in place, over half of which (58%) have staff members dedicated to these issues.
But while 80% of executives at these companies believe diversity is important, only 26% consider it “very important.” Furthermore, 8% of executives don’t consider diversity important to the bottom line at all.
Despite what might be perceived as less than enthusiastic support for these initiatives, they appear to be having an impact. A 1998 study by Korn/Ferry International in Los Angeles, the country’s largest executive search firm, reveals that women and minorities continue to make strong advances in the boardrooms of corporate America. Ethnic minorities moved up the most dramatically last year and now sit on 55% of all corporate boards, an increase from 51% in 1996. African Americans represent the largest number of minority directors and are now on 37% of all major boards vs. 35% last year. Still, there is room for improvement, since just 3% of directors at major U.S. companies are African American.
“The companies that appoint minorities to the boards typically have diversity efforts in place,” explains Madeleine Condit, a vice president in Korn/Ferry’s Chicago office. “In fact, the largest companies — the Fortune 100 — have the largest number of minority directors and are typically some of the leaders in the diversity movement.”
When you look below the board level, the news is also encouraging. Condit says there has been a definite increase in minority searches over the past year at the staff management level. While companies formerly would recruit upper-level minority executives from other companies, today they are recruiting for lower-level positions and developing those people internally. “Companies are beginning to understand the need to have their own pipeline filled with a diverse workforce, as opposed to recruiting people from other companies,” she explains.
In an effort to more closely examine the corporate diversity work that is making these changes possible, BLACK ENTERPRISE invited Fannie Mae and Ford Motor Co. to submit answers to detailed questions about their diversity initiatives. These companies agreed to have their efforts analyzed by diversity experts as a means of gaining objective feedback about their programs’ strengths and weaknesses.
Fannie Mae, formerly known as the Federal National Mortgage Association, is the nation’s largest source of home mortgage funds. As a shareholder-owned corporation since 1938, the company provides financial products and services that increase the availability and affordability of housing for low- to middle-income Americans.
Of the company’s 3,700 employees, 22.5% of its top managers are minorities. African Americans represent 15.5% of its management group and 26.5% of all employees; Hispanics represent 3.3% of managers and 3.8% of employees; and Asians/Pacific Islanders represent 3.4% of managers and 8.7% of employees. Additionally, 22% of Fannie Mae’s 18-member board of directors are minorities, or double the average for similar companies.
Fannie Mae launched its diversity initiative in 1992 with the creation