Monday, August 1, 2016

The Number of Black C-Suite Executives Has Shrunk Under Obama (BW)

  • The peak was in 2007, the year before first White House win
  • African Americans must still work ‘twice as hard to be equal’

Pamela Carlton, a former executive at JPMorgan Chase & Co. and Morgan Stanley, was as hopeful as any black American when Barack Obama was elected. She believed in the post-racial society and could imagine the next generation not facing the obstacles and isolation she did.
“There was an expectation things would get better,” says Carlton, who went to Wall Street after earning an MBA and law degree from Yale University and since 2003 has headed the consultant Springboard.
Instead, in many ways, they got worse. Just five companies in the S&P 500 -- American Express Co., Merck & Co., Carnival Corp., Eaton Corp. and Xerox Corp. -- are headed by African Americans, and that will drop to four when Ursula Burns steps down as chief of Xerox in the next few months. In 2007, the year before Obama first won the White House, there were seven. That was the peak.
The pipeline into the biggest corner office is also thin. Most executives in posts within striking distance of CEO last year were white, 7.8 percent were Asian American and 4.2 percent were Latino. Blacks made up 2.6 percent, according to statistics compiled by Richard Zweigenhaft, a professor at Guilford College.

‘Guarded Behavior’

Boards, which would seem to be relatively easier to diversify, are less black, too. The proportion of African Americans directors was 8.6 percent last year, down from 9.6 percent in 2010, data from recruiter Spencer Stuart show.
“Blacks are still mostly being channeled into staff jobs rather than line jobs running business divisions that lead to the CEO office,” says Ronald Parker, chief executive officer of the Executive Leadership Council, an advocacy group for African Americans. “There’s still this guarded behavior around who gets to sit in that seat.”
Parker calls it “unconscious bias,” judging people based on how they look, a “common denominator” with what’s behind much of the racial strife in the country. The ugly point the U.S. has reached in race relations -- fueled by a spate of deaths of black men at the hands of police officers and the recent killings by black snipers of cops in Dallas and Baton Rouge, Louisiana -- is spurring some corporate reassessments, says Katherine Giscombe, a vice president at Catalyst, an advocacy group for female executives.

‘Deep-Seated Problems’

“The violence is bringing race more strongly into the diversity conversation,” she says. “For several years now, when companies have discussed diversity, they’ve often talked about their need for diversity of thought and ignored the elephant in the room -- which is race.”
Obama has been an inspiration and role model to African Americans, and there were hopes his being in the White House would radically change race relations for the better.
“The expectations of what he could do were far too inflated, because the problems are too deep seated,” says Michele Mayes, vice president and general counsel of the New York Public Library and former general counsel of Allstate Insurance Co. “Some people still think blacks are ‘less’ than others, so then they say Obama or other successful blacks are ‘special,’ which just relieves them of having to examine their biases. I tell people I don’t want to be seen as special.”

Rare Junction

The first black to lead a Standard & Poor’s 500 Index corporation was John Thompson, at Symantec Corp., in 1999. Kenneth Chenault, CEO of Amex since 2001, was the second. Merck’s Kenneth Frazier was appointed in 2011, Carnival’s Arnold Donald in 2013 and Eaton’s Craig Arnold in 2016. JC Penney Co., which was dropped from the index three years ago, named Marvin Ellison CEO last August. (Burns, the only black woman who’s led an S&P 500 company, will remain chairman of Xerox after it divides into two publicly traded entities by the end of the year; Jeff Jacobson will become Xerox CEO and Ashok Vemuri will head the other post-split company, Conduent.)
There’s no question many companies have made strides. In some cases, the Leadership Council’s Parker says, they realize having African Americans in top jobs is in their business interests. Blacks, after all, had purchasing power of $1.2 trillion last year, according to the University of Georgia’s Selig Center for Economic Growth.
At Sodexo SA, a French food-services and facilities-management company with about 120,000 employees in the U.S., 13 percent of managers are African American, according to Rohini Anand, the global chief diversity officer. That’s the same percentage of the U.S. population that’s black -- a rare junction in America. “Attracting and keeping diverse talent is central to our growth strategy,” Anand says. CEO Michel Landel sets hiring targets, making sure minorities get experience “so they can move up.”
Companies have to take risks and look for talent outside traditional networks if they want to bust up the status quo. “At the end of the day, you have to break some rules,” Mayes says.
The highest-ranking black employee at New York Life Insurance, Senior Vice President for Government Affairs George Nichols, says he was lucky to have been mentored by white chief executives. Now he does his bit by coaching young black colleagues -- and tells them they’ll have to work “twice as hard to be equal.”
At Guilford College in Greensboro, North Carolina, Zweigenhaft, who researches minorities in senior management, has a theory: A black president, and a few high-profile blacks in business positions, took the pressure off. Suddenly, “it wasn’t so embarrassing” that corporate America was largely colorless. “Sometimes having a small number who’ve broken out works against change.”
Clifton Wharton Jr. TIAA-CREF 1987-1993
Franklin Raines Fannie Mae 1999-2004
John Thompson Symantec Corp. 1999-2009
Kenneth Chenault American Express Co. 2001-present
Richard Parsons Time Warner Inc. 2002-2007
Clarence Otis         Darden Restaurants Inc. 2004-2014
Stan O’Neal         Merrill Lynch 2002-2007
Aylwin Lewis         Sears Holding Corp. 2005-2008
Ronald Williams Aetna Inc. 2006-2010
Roger Ferguson TIAA-CREF 2008-present
Rodney O’Neal Delphi Automotive Plc 2009-2015
Ursula Burns         Xerox Corp. 2009-present
Kenneth Frazier Merck & Co. 2011-present
Don Thompson McDonald’s Corp. 2012-2015
Arnold Donald Carnival Corp. 2013-present
Marvin Ellison JC Penney Co. 2015-present
Craig Arnold         Eaton Corp. 2016-present

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