Despite the popularity of corporate diversity initiatives, progress — within corporate leadership ranks and society — has been slow and faltering. Measuring the evolution of actual corporate diversity alone remains a challenge, as concrete reporting of racial diversity data in the fashion industry’s leadership ranks is hard to come by.
The transparency that does exist — largely due to self-reporting and voluntary participation in periodic industry surveys — shows a continuing lack of Hispanic and Latinx representation in the chief executive officer and executive leadership ranks. While the U.S. Latinx population grew to 60.6 million people in 2019, an increase of roughly 20 percent since 2010, according to the U.S. Census data in June, there are only 16 Hispanic ceo’s leading Fortune 500 companies, according to the Hispanic Association on Corporate Responsibility, or HACR, a 34-year-old organization advocating for Latinx inclusion in U.S. companies.
“Corporate America needs to recognize that our Latino community is a growing community, not only in terms of population, but in terms of economic force,” said Cid Wilson, president and ceo of HACR. “And yet, we know that there is a major gap in terms of Hispanics at high levels of corporate America, and as well as the corporate boards.”
After a summer of national Black Lives Matter protests, catalyzed by the killing of George Floyd in Minneapolis, many of fashion’s largest brands and retailers have been pressured to address the evident inequality in their own institutions.
“For many organizations, the events of 2020, including George Floyd’s murder, brought a more focused commitment to D&I efforts,” the industry lobbying group National Retail Federation said in an August report by its new diversity and inclusion working group formed in June. The working group comprises some 75 retailers, according to the NRF.
An initial survey by the group found that most of its participants said their senior leadership was committed to diversity and inclusion, but that they lacked formal systems to ensure it.
“Survey respondents said they were prioritizing initiatives such as promoting employee diversity through formal hiring programs, implementing unconscious bias training and establishing employee resources,” the NRF report said. “At the same time, organizations were less likely to have existing processes in place such as candidate pipelines, implementing targeted sourcing methods or increasing the diversity of interviewers.”
Just three out of 10 said those types of initiatives were on their roadmap for the next 18 months, and less than half of them (roughly 46 percent) said they were planning to take steps to ensure women and people of color have equitable access to development opportunities, according to the report.
HACR does not yet have a breakdown of the number of Latinx ceo’s within the fashion and retail industry, nor does the NRF, though both organizations told WWD they intend to gather more detailed breakdowns.
Few executives of Hispanic or Latinx origin lead major fashion companies. Undoubtedly the highest-profile retail ceo on a global scale is Carlos Crespo González of Inditex of Spain, owner of Zara, while Diane von Furstenberg’s ceo until recently was Sandra Campos.
The lack of meaningful advancement of Hispanic and Latinx executives tracks with the overall lack of racial diversity in corporate leadership. In May, consulting firm McKinsey & Co. wrote that it found that “ethnic minorities on U.K. and U.S. executive teams stood at only 13 percent in 2019, up from just 7 percent in 2014,” according to its third so-called business case for diversity report since 2015.
Eric Lopez, director of corporate accountability at HACR, said the organization’s Corporate Inclusion Index surveys, which ask participating companies about their Latinx employees and their corporate recruitment, retention and talent development practices, have found that mobility of those employees tends to stop at the midmanagement level.
“We look at the pipeline for talent development and promotions,” said Lopez. “We look at it from internships all the way through the senior level positions.
“When you get to middle management and beyond, there seems to be, what is in the social science research called, ‘a frozen middle,’” he added. “So from middle management, up until senior levels, there seems to be a leak somewhere, there seems to be some kind of a freeze or ceiling that doesn’t allow leadership to progress to those levels.”
On Tuesday, HACR released the results of its 2020 Corporate Inclusion Index survey of 70 companies that took the survey. It found that Latinx workers comprise an average of 15 percent of the total reported employee base for survey participants and that Latinx leaders held just over 4 percent of executive positions, while among that group, women made up just over 1 percent of those positions among participating companies.
Wilson, HACR’s president and ceo, cast the issue as a function of the word-of-mouth based hiring process, especially at senior and top executive levels.
“Once you start going from midlevel to senior and executive, it then becomes a balance between your qualifications and executive network. And once you get to the c-suite, it’s almost more about your network than it is about your qualifications,” Wilson said. “The reality is that, the common denominator is that when you’re at that level, you’re at the executive level because someone vouched for you. And there are not enough leaders who are vouching for people of color.”
Generally, corporate messaging on the issue of workplace diversity and representation at the leadership level appears to be crafted around professed commitments to social ideals and a statement of belief that those goals ultimately also serve business interests.
A pattern emerges from the sampling of statements and reports from the industry: there is an emphatic affirmation of diversity as a moral imperative, a bow of contrition about perhaps not having lived up to that ideal, followed by a vow to do better.
But a number of fashion brands and retailers are trying to signal that they’re going beyond the script.
Ralph Lauren said it is broadening the “Mosaic” multicultural group initiative that it launched last year, and will have advisory groups to represent different communities within the company, including its first Hispanic, Latino and Latinx Advisory Group, which was launched this month to coincide with Latinx Heritage month. According to its fiscal-year 2020 report in June, 24 percent of its U.S. employees in fiscal-year 2020 are Hispanic and Latino, a slight increase from 22 percent in fiscal-year 2018.
Walmart Inc., which said Tuesday that it received a five-star rating in the 2020 HACR Corporate Inclusion Index survey in the categories of employment, governance and procurement, said in a mid-year diversity report this month that its Latinx associates in the U.S. make up roughly 16.4 percent of its total U.S. workforce, an increase of 1.5 percent from January 2019.
“Latinx associates are also realizing career growth opportunities at Walmart with promotion rates outpacing representation,” the company said in the report. “Latinx associates represented 10 percent of all U.S. management positions as of July 31, 2020 and accounted for 15.12 percent of total management promotions year-to-date — outpacing management representation by more than 5 percent.”
Levi Strauss & Co. said Latinx employees make up 28 percent of its workforce, while Latinx leaders comprise 6 percent of its executive management team, according to the company.
“Since 2018, our diversity, inclusion and belonging strategy has focused on creating an inclusive culture, furthering women in leadership, ensuring pay equity and recruiting diverse candidates,” Tracy Layney, Levi’s chief human resources officer, said in a statement posted on the company’s website. “Some of our key achievements include building out a Diversity, Inclusion and Belonging function, standing up employee resource groups, or ERGs, and implementing programs to empower women, people of color and other underrepresented populations, as well as fostering inclusion and allyship across Levi Strauss & Co.
“But we need to do even more,” she wrote. “We vow to hire, support, promote and elevate more people of color at LS & Co. across levels and functions.”
Some have also set targets — Gap Inc. said it plans to “double the representation of Black and Latinx employees at all levels in our U.S. headquarters offices by 2025 to mirror our customers, with a particular focus on functions that make and market our products to ensure we are creating for all, with all.”
Etsy, which last year said it planned to double the percentage of Black and Latinx employees in its workforce by 2023, said it has already doubled the number of Black and Latinx employees it has hired in a year, compared to 2018.
Black and Latinx employees represented approximately 15 percent of Etsy’s U.S. hires in 2019, most of them in engineering, according to the company. As of December 2019, Black and Latinx employees comprised 11 percent of Etsy’s U.S. workforce, an increase from 8.5 percent in 2018. The company said it is now targeting sponsorship and mentorship programs to help increase those employees’ representation in company leadership.
There are questions about whether increasing diversity at the ceo level is even a meaningful path to broader social equality, though it would still be a welcome influx of diverse leaders. A report in August by the nonpartisan Economic Policy Institute found that ceo pay in the top 350 companies in the U.S. shot up 14 percent to an average of $21 million, roughly 320 times that of their average workers.
That marks an astonishing 1,167 percent increase from in 1978, as opposed to the pay of average workers, which rose just 13.7 percent during that time, according to the EPI report. The federal minimum wage of $7.25 is unchanged since 2009.
Nonetheless, organizations are addressing the issue, led by corporate executives including ceo’s, diversity officers, human resources professionals and in-house attorneys who insist leadership will drive structural change.
The group CEO Action for Diversity & Inclusion now has more than 1,300 signatories to an agreement to commit to four main efforts: holding conversations through “A Day of Understanding” events, conducting unconscious bias training, sharing their best practices with one another, and creating a diversity strategy and sharing it with their board. There are some 31 retail industry signatories, including executives from Movado Group, NRF and Walmart, among others.
“Because as we know, over the last 20 years or so, there’s a lot out there on the business case for diversity, and yet, even though that business case includes being more profitable and being able to move your business forward, we haven’t had a lot of companies that have really taken up those issues and really moved the dial forward,” said Shannon Schuyler, chief purpose and inclusion officer at PwC, and a leader of CEO Action for Diversity & Inclusion.
Reducing the case for diversity to business imperatives can itself be diminishing, however. The argument for greater diversity is simply that it is a matter of basic fairness to have people of color in leadership roles, said Wilson of HACR.
“Our argument is that that’s the reason why you need to focus on diversity and inclusion,” he said. “Because there is inequality in terms of how promotions happen.”
At present, CEO Action for Diversity & Inclusion doesn’t examine company diversity data or track their progress in their stated goals, she said.
“We don’t look at metrics per se — every year, people have to reconfirm that they’re moving toward either accomplishing all four of those commitments, or there’s some companies that have done all four of them and are moving on to the next stage,” she said. “But we don’t hold people actually accountable as far as what the metrics are within their organizations.”
When asked whether the group plans to collect such metrics and monitor progress, Schuyler said the current focus was on building inclusive workplace cultures that would support the retention and promotion of diverse employees.
“I think we’re starting to look more at: what does transparency look like, and where are companies in that journey,” Schuyler said. “I will tell you, in order to get people to really want to focus on diversity and inclusion, we realized early on, the first step was to say, don’t just try to move a number in a box. Try to build a culture that’s different.”
Leon Buck, vice president, government relations at the NRF, who is a financial services and banking lobbyist overseeing the organization’s diversity efforts, said NRF is planning to collect more detailed data on the diversity of ceo’s and executives in fashion and apparel retail.
“We only think we can effectuate change if it starts at the top,” Buck said. “We want the managers, the c-suite level, we want the board level, we want the chairman level. We’ve only started but those are the goals.
“I can only tell you, there’s a ways to go in reaching this goal…I don’t think we are where we should be, to be honest with you,” he said. “We’re now at the point, as you know in our country, that we have a large number of Latinos in the country, why not have candidates who reflect what the country is?”