Latino Group Pressures California Companies for More Directors
A group advocating for Latino board members hopes that the glare of publicity will pressure California companies into adding Hispanic corporate directors.
The Latino Corporate Director Association’s new director tracker showed that Latinos hold only 2.1% of the board seats at 674 public companies in the state even though Hispanics are California’s largest ethnic group, at 39% of the population. Non-Hispanic White people, who make up 37% of the state’s residents, hold the vast majority of the seats. Black people, who are 6.5% of the state’s population, hold 2.9% of seats, the data show.
The California Boardroom Equity Scorecard, compiled with the help of research firm Equilar, also showed that 86% of the state’s companies had no Latinos on their boards.
“We have to track it,” said Esther Aguilera, president of the association, adding that companies need to know where they stand. “Our purpose is to keep the attention on who’s getting appointed and if it reflects the demographics of California."
The group wants to ensure that Latinos benefit from a new California law requiring each public company based in the state to have at least one director belonging to a minority group by the end of next year. The law, the first of its kind in the U.S., will require companies in the state to have as many as three members of underrepresented groups by the end of 2022. Between July 1 and Oct. 31, 71% of new board appointments in the state went to White men and women and 2% to Latinos.
Latinas, who hold only 0.7% of corporate seats in California, failed to benefit from a similar law that required at least one woman on each board by the end of last year and as many as three women by the end of 2021. Of the 511 women appointed to boards after the law passed, only about 3% were Latina, according to Aguilera.
“Latinas were left behind,” she said. The association has already started nudging companies into improving representation, engaging in conversations with them and providing lists of Latino candidates.
Boards across the country have been under pressure to add at least one Black director since nationwide protests over the killing in May of George Floyd in Minneapolis. Latino groups have pushed back against a nationwide initiative that seeks to ensure that every public corporation have at least one Black director first, asking companies to consider all underrepresented groups equally when there is an open seat. Investors have also been insisting that companies do more to both disclose the racial breakdown of their boards and add more members of underrepresented groups.
The association’s tracker will be updated quarterly and include information about the progress of California’s various economic sectors. Fewer than 30 companies in California’s tech industry have Latinos on their board while only four of the state’s companies have three or more Latinos on their boards. The association aims to triple Latinos’ share of board seats by 2023 and plans to expand the tracker to other states, eventually making it national.
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