How Dow Chemical Got Woke
(Bloomberg Businessweek) -- On April 1, Dow Chemical will be spun off from DowDuPont Inc. to form an independent company. The move will be big for the corporate financiers behind it, and for the manufacturers around the world that put Dow’s chemicals in running shoes, mattresses, adult diapers, baby wipes, and many other products. But it will also be a bellwether for a great many other people. When the spinoff is complete, Dow, which was founded in 1897, will be the first large industrial company with an openly gay chief executive officer and only the second major public company with a gay CEO, after Apple Inc.’s Tim Cook.
“I hope the first thing that people think about me is not that I’m gay,” says the new boss, Jim Fitterling, during an interview at Dow’s headquarters in Midland, Mich. “I’ve put a lot of my life into the company, and I understand the company really well, and I know what it takes to deliver good financial results.”
Unlike Cook’s identity—which he announced in a Bloomberg Businessweek essay that made international news when it was published in 2014— Fitterling’s sexuality went mostly unremarked on when he was appointed by Dow’s former CEO, Andrew Liveris, last year. “It’s just interesting when it comes up. People say, ‘How did you get there?’ ” says Liveris, referring to Dow’s having a gay CEO. “And I kind of look at them quizzically and say, ‘Get where?’ ”
Although neither Liveris nor Fitterling would ever put it this way, Dow—whose legacy includes making napalm during the Vietnam War and much of the plastic waste polluting the world’s oceans today—is also, somewhat improbably, woke. The company has scored a perfect 100 on Human Rights Campaign Foundation’s Corporate Equality Index every year since 2005, meaning it meets every requirement for an LGBT-friendly workforce. These include having policies protecting employees from discrimination, benefits for domestic partners, coverage of the health needs of transgender employees, and a track record of advocating publicly for LGBT causes.
Dow, of course, isn’t alone. While the country remains deeply divided over LGBT rights, corporate America has been faster to embrace social change than the rest of us, and not only in coastal cities or traditionally liberal industries. Dow’s hometown of Midland, population 42,000, is a world apart from Apple’s home base in the Bay Area. Less than a week after the Supreme Court legalized gay marriage in 2015, a Midland district judge stopped performing marriages. The same year, when the local newspaper announced the promotion of one of its editors, a state representative sent out an “agenda alert” to warn constituents that the editor was gay. (The representative later apologized.) Donald Trump won Midland County by 20 points; the county has voted for a Democratic presidential candidate only once in the past century, for Lyndon Johnson in 1964.
But Dow’s politics are different from Midland’s. Starting in the late 1980s, it began creating “employee resource groups” for women and minorities. There are now 10 such groups, which Liveris says has allowed the company to recruit from a wider talent pool and to avoid losing longtime executives such as Fitterling to more progressive companies. “We’re here in the middle of Michigan, and there’s no question we could be labeled as a company that may be superconservative based on the physical location of our headquarters,” says Liveris, who turned the company over to Fitterling last July. But, he continues, “we’ve always put a premium on human talent.”
Dow employees in Midland, Mich.
Fitterling is 57, and like many of the company’s executives, he’s a Dow lifer. He grew up on a farm in Odessa, Mo., about 35 miles from Kansas City and joined Dow after graduating from the University of Missouri. In the mid-1980s he worked at various points in sales, marketing, and supply chain management before relocating to Hong Kong to work on a unit dedicated to water treatment products. During his 11 years in Asia he rose through the ranks, eventually taking over Dow’s operations in Southeast Asia and Australia, with stints in Sydney, Bangkok, and Kuala Lumpur.
Through all this, only those closest to Fitterling knew about his sexuality. He met the man he eventually married while posted in Hong Kong in 1994, but at work he was still in the closet. “It wasn’t something that you went out of your way to talk about,” he says. “There was almost no reward for doing it, and there was a lot of risk.”
Fitterling finally decided to come out in 2008, after he was diagnosed with cancer. “I was going through several surgeries, a year’s worth of chemo,” he recalls. “I started to look around and say, you know, I’m going to have to make some changes in my life. And one day I was thinking about a lot of stresses that I needed to reduce, and one of them was trying to live two different lives.”
Initially he told only close colleagues, but as he continued to climb the executive ranks, he started to feel like he had do something more public. “If you’re a young employee coming to work here and you think that one of the top managers of the company is gay but not willing to be out publicly, then what’s your thought process about being able to be out?” he says. Then he supplies the answer: “Well, if he’s afraid of doing it, then I’m afraid of doing it.”
In 2014 he decided to make an announcement at an internal company event for National Coming Out Day. Next to him on stage was Chief Financial Officer Howard Ungerleider, a straight man and the executive sponsor of the LGBT employee group GLAD (for Gays, Lesbians, and Allies at Dow). “I would say to you, having lived with my own thoughts, inside my own mind, for a number of years, and having come out, most of that fear was my own, and it wasn’t anything that was out there to be afraid of,” Fitterling told colleagues in an auditorium at the corporate headquarters or watching via webcast. He’d been at Dow for 30 years, he pointed out, and with his partner for 20. “That part of my life had been very separate from my Dow life for that whole 20 years,” he said. The following year, after the Supreme Court ruling, they married.
In Midland, where Dow is so beloved that even the odd smells emanating from its factories are treated with something close to affection, it’s common to see the company’s inclusiveness as a strand of its corporate DNA. “It starts with the fact that Herbert Henry Dow was not from here,” Ungerleider says.
Born in Canada, the company’s founder picked Midland as his corporate base in 1897 because of the area’s plentiful supply of bromine, a key ingredient in medicines, photographic chemicals, and other products. “This was a farming community, and the townsfolk at the time called him Crazy Dow,” Ungerleider says. Extracting bromine required shooting electricity through salt water, which can be dangerous. “He literally and figuratively blew himself up a few different times,” Ungerleider says.
Although the hit products the company eventually developed and sold—among them Saran wrap and Styrofoam—came to define a certain suburban conformity, they were, Ungerleider argues, radical in their own ways when Dow introduced them, in 1933 and 1947, respectively. (The company sold its consumer brands to S.C. Johnson & Son Inc. in 1997, shifting its focus back to specialty chemicals.) Dow hired its first female research scientist in 1929, and a team of women was instrumental in the expanded usage of silicon-based materials in the 1940s. Bettye Washington Greene, who joined Dow in 1965, was an early advocate of black women in the sciences. The company’s first employee resource group was the Women’s Innovation Network, in 1989.
In 2000 a group of Dow employees that included Louis Vega, a former Republican political operative who’s gay, began a push to get the company to offer domestic partner benefits to same-sex couples. Dow agreed two years later; it added gender identity to its nondiscrimination policy in 2007. GLAD, as Vega’s group came to be known, included gay and straight employees and eventually grew to include more than 3,000 participants in 45 chapters.
Today, Vega, who served as chief of staff to Liveris and is now Dow’s vice president of North American Government Affairs and Advocacy, acknowledges that the company’s progressiveness might appear unlikely, but he sees it as sending a powerful message to other companies. The effect, he says, is that others might think, “Wow, if this company has these stances, then shame on us.”
Last year, Dow started flying the rainbow flag outside its headquarters, near the Stars and Stripes and those of other countries where it operates. The small gesture prompted letters to the local newspaper cautioning the company not to impose its views on locals. Fitterling isn’t bothered by the response. He says he likes to think of Dow’s offices as embassies—whatever the law outside, Dow policies and values are enforced on its grounds. “Maybe we’re in a state where an LGBT person doesn’t feel safe because of some of the state laws, but when they come to work here, they need to feel safe,” he says.
Fitterling acknowledges that Dow’s record for women and minorities still needs improvement. Only 27 percent of the company’s U.S. employees are women, and its leadership is composed overwhelmingly of men. Just 18 percent of top managers are women. Meanwhile, only 21 percent of its U.S. workers aren’t white.
To help boost some of those numbers, Dow appointed its first inclusion executive and added an inclusion goal to top executives’ bonus structure last year. They’re now expected to set—and meet—goals for their departments. The change is designed to get more white men involved in discussions about diversity, a step Fitterling regards as crucial. Most of GLAD’s members, he notes, aren’t gay. “Inclusion is about everybody feeling like they’ve got an equal shot to get ahead and everybody feeling like it’s a safe environment,” he says. “That’s what we’re trying to create.”
Of course, protecting this safe environment means protecting the new company once the spinoff is complete. Hedge fund manager Nelson Peltz, who advocated for the 2015 plan to merge Dow with DuPont and then spin off the combined operations into three companies, sold his stake in late 2017, shortly after the merger was completed. In February, Bloomberg News reported that Dan Loeb, another prominent hedge fund manager and backer of the merger and spinoff, was no longer as optimistic about the company’s prospects because of the slowdown in the global economy. DowDuPont shares have fallen about 21 percent in the 18 months since the merger.
Fitterling has waved off concerns about financial performance, promising at an investor presentation in November that after the spinoff Dow will pay the highest dividends of any chemical company. He also said he expects to increase plastics production by 1.4 million tons per year. The added revenue, plus cost cuts, will contribute to Dow’s plan to increase earnings by about $3 billion, he said. (He also acknowledged environmentalists’ concerns about increased plastic production and suggested that the solution was improved waste management.)
A marker of the company’s progress came on a June evening last year, when Fitterling threw out the first pitch for Pride Night at Dow Diamond, the venue where the Class A Great Lakes Loons compete against the likes of the Fort Wayne TinCaps and Quad Cities River Bandits. Pride nights still aren’t that common in minor league baseball, but with Dow’s backing, Midland has embraced the concept. The Dow CEO took the mound in a rainbow-patterned uniform and tossed a rainbow baseball. On his feet were a pair of Under Armour running shoes with rainbow padding. The foam, like so much else, was manufactured by Dow.
To contact the editor responsible for this story: Max Chafkin at firstname.lastname@example.org
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