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

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

• By Audrey Ballinger

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What is a Corporate Report?

• Financial Report

• Non-financial Report

• Required by law
• Federally established guidelines
• Companys formal record
• Overview of profitability and financial condition

• Not Required
• Companys responsibility for developing a
• Sustainable economy
• Environmental isssues
• Social Issues

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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 words economy,
  environmental and social conditions
• Leads to improved sustainable development,
  because it allows organizations to measure and
  improve their performance

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This study is a -content analysis of -ten
Non-financial reports of -Fortune 500
CompaniesTo examine -how Americas top
corporations -represent DIVERSITY

• Thesis Overview

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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

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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 corporations 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

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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) -Authorit
y (appointment of staff to monitor
diversity) -Expertise (various departments to
oversee diversity initiatives)
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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

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CSR Reporting Statistics

• According to the University of Amsterdam and
  KPMGs 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
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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
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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
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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

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A content analysis of non-financial corporate
reports to examine how Americas top corporations
are representing diversity

• SAMPLE
• Fortune 500 Companies 2007
• CorporateRegister.com
• Information was coded from 10 CSRs that had
  direct correlation to the companys diversity
  initiatives or reporting practices

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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

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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.

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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
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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
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Discussion
The sustainability reports promote transparency
and accountability of a companys 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
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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 Americas
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.
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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

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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