Nasdaq made something of a statement this month when it submitted a proposal to the U.S. Securities and Exchange Commission to adopt new rules relating to board diversity at companies listed on its stock exchange.
If the SEC approves, the rules would require all Nasdaq-listed companies to publicly disclose board director diversity statistics and have — or explain why they don’t have — at least two diverse directors.
In this context, diversity includes one director who self-identifies as female and one who self-identifies as either part of an underrepresented ethnic minority or as LGBTQ+. Foreign companies and smaller reporting companies could satisfy the new requirement with two female directors.
It felt like an extension of the sentiments unveiled last year in the Business Roundtable statement that placed all stakeholders on an equal footing when it comes to the purpose of corporations, rather than prioritizing shareholder value above all else.
Some say Nasdaq didn’t go far enough and that it’s a low bar for companies to clear. They also point out that, in an ideal world, an exchange shouldn’t have to come out with governance guidelines like this — rather, companies should be acting proactively to embed diversity at all levels of their organizations.
Others, including The Wall Street Journal’s editorial page, accuse Nasdaq CEO Adena Friedman of engaging in a “diversity stunt” aimed at personal self-aggrandizement. It believes Nasdaq was straying way out of its lane and indulging in a “groupthink” process to promote its diversity-consulting subsidiary.
“Nasdaq’s decision, if upheld at the SEC, could pave the way for even more intrusive hiring quotas,” concluded a WSJ editorial on Wednesday. “Big business is increasingly teaming up with big government to profit at the expense of everyone else. The cultural and economic incentives are so convenient for Nasdaq that it can’t see it is enforcing groupthink in the name of puncturing it. And unlike woke politicians, it doesn’t face voters who can hold it accountable.”
But, beyond the narrow confines of the Journal’s editorial pages, there’s no doubt real change is afoot in relation to diversity and business, whether it is state laws, trade associations, the U.S. Chamber of Commerce or institutional investors such as BlackRock and others demanding commitments to diversity within the companies they fund. And the Nasdaq initiative can only help accelerate that process, whatever the cynics and doubters may say.
Yesterday’s PRWeek Racial Equity Virtual Summit shed light on the issue in the context of PR and communications, adopting a no-holds-barred approach to four core areas of the debate: Showing Up as Your True Self at Work, Diversity as a Business Imperative, What it’s Like to be Black in the Tech PR Sector and The Agency Diversity Conundrum.
In truth, we organized the summit in lieu of our Diversity Distinction in PR Awards. Given the egregious instances of racial injustice this year and data showing PR firms in particular aren’t making enough progress on diversity, especially at senior levels, it just didn’t seem right to celebrate in our usual fashion.
While researching the summit it was noteworthy that this debate has been raging in the pages of PRWeek for the best part of two decades, and some argue little progress has been made in this time. That’s why we ensured senior white leaders were part of the summit panels and conversations, including the leader of the world’s largest PR firm, Richard Edelman.
Edelman noted that 50% of the senior hires at his agency since June have been diverse, including global & U.S. chair of purpose Helga Ying and MD, digital, corporate affairs & advisory services, Chris Gee.
He conceded that growing organically from within the organization was not going fast enough, so he was hiring laterally as well. He is also including diversity as one measure within senior staffers’ annual reviews and is leading from the front personally.
“My waiting time is over,” he said. “It’s [now] an intimate involvement on a monthly basis of ‘Where are we on diverse hires for these geographies or these practices or to run these clients?’”
There now has to be at least one diverse candidate in every search the agency conducts and those diverse candidates need to be taken seriously in terms of consideration for the roles.
“George Floyd’s murder was a moment, not just for brands but for PR agencies, to be counted,” added Edelman. “And we want that responsibility on our shoulders.”
As evidence that racial equity is seeping into the agency’s culture, Edelman cited work such as The CROWN Act for Unilever (nominated in five categories in this week’s PRWeek Awards 2021 shortlist), A New jingle for a New Era for Unilever’s Good Humor ice cream brands (nominated twice) and #TakeOutHate for Ajinimoto as examples of work pushing the boundaries and highlighting diversity issues and led by diverse teams.
“It’s just better work and it’s changing how we do our business,” said Edelman. “And that to me is the motive force.”
Edelman clients including HP are doing their part by insisting their agencies report every quarter on the amount of diverse teams working on their business.
“Clients want the best work,” added Edelman. “They’re convinced diverse teams deliver it and we’re going to not only accommodate that we’re going to move fast towards that.”
Edelman also applauded Nasdaq’s diversity in the boardroom initiative and noted that “where the money goes, change happens."
But all is not yet rosy in the garden. In the same session, Blue Impact’s Suresh Raj noted that he couldn’t in all conscience advise his nephew to enter the PR industry because he just wouldn’t see enough people who look like him. He recounted relatively recent instances of being asked to carry an agency CEO’s bag or call housekeeping for a hotel room to be cleaned and still experiencing a glass ceiling even after 23 years in the industry.
In the Diversity as a Business Imperative session, Lenovo’s Torod Neptune told a similar story about the conversations he was currently having with his son about where to forge his career after university.
The point was emphasized by Taylor’s Sade Ayodele in Showing Up as Your True Self at Work, where she recounted examples of being the only person of color in a group of 20 staffers and being told to change her approach rather than expecting the rest of the company to accept her on her own terms.
In response, Edelman’s Trisch Smith implored the best young people who are looking around and not seeing themselves represented to come into PR, because “we need you.”
“Our industry needs you. If this is an industry you want to be in there are opportunities. Your voice is necessary, valuable and critical to determine the success of our clients’ business and our agency business,” added Smith.
With enough leadership from the top of the communications industry and a willingness to be “comfortable being uncomfortable” (Smith), allied with macro moves in wider business such as Nasdaq’s new guidelines, hopefully we can move beyond egregious instances of different workplace treatment for BIPOC PR professionals.
I’m only scratching the surface of the Racial Equity Summit discussions here and the material in all of the sessions is very rich and well worth checking out. You can access it all on demand free of charge here.
And it is my hope that the Diversity Awards will return next year to celebrate real progress made on racial equity in PR and business by the time of the 12-month anniversary of the horrific murder of George Floyd in Minneapolis and beyond.
We cannot afford to be revisiting this issue yet again in five more years only to find that nothing substantial has changed.