The Boards Of Fortune 500 Corporations Business Essay


Despite the fact that Title VII of the Civil Rights Act is going on 50 years since its passage, the number of women and people of color in senior positions and on the boards of Fortune 500 corporations in the United States is very low, in fact, in some cases, actually stagnant since 2004. It is believed by some researchers that reforms to this act, therefore making it easier for the courts to determine cases of discrimination, will not prove to be any more effective than the laws in place over the past five decades: They argue that other factors go into a company's motivation to increase its numbers of women and people of color. One of the areas most recently being considered in this regard is organizational makeup and corporate culture. According to this theory, discrimination is not an issue that stems from individuals within a company but rather what is or is not acceptable and encouraged at the organizational level. This paper will first define those factors that are noted to discourage discrimination within organizations. Then, an analysis will be conducted of ten (?) companies Fortune magazine lists as the "Best Places to Work for Minorities" to determine whether or not these characteristics are actively present at these corporations and what other factors may be precipitating their nondiscriminatory environments.

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antidiscrimination growth. According to the Executive Leadership Council (ELC, 2010), less than 800 or 3.2 percent of the 35,000-plus senior executives at the CEO level or those one and two levels below CEO within most Fortune 500 companies are African American. Within this group, African-American women are disproportionately underrepresented. Black women make up only one percent of American corporate officers (League of Black Women, 2012), despite the fact that 75 percent of corporate executives state that having minorities in senior-level positions furthers innovation and better serves a diverse customer base. On the board of these corporations, black women only hold 1.9 percent, compared with 12.7 percent for white women. Of Fortune 500 CEOs, only 21 or 4.2 percent are people of color: Four are black, nine are Asian, and six are Latino. Only 4 are females of color, or.8 percent, and though women make up nearly half of the labor force, only 18 Fortune 500 CEOs or 3.6 percent are female. In fact, the numbers of women and people of color are stagnant: The Alliance for Board Diversity (Catalyst, np) reports that then numbers on board seats for these individuals has remained flat since 2004, and those held by African Americans have declined.

Due to the Title VII, not hiring enough minorities can lead to lawsuits and decreased public image. Employment discrimination exposes firms to potentially costly litigation. In 2010, the top 10 private plaintiff employment discrimination lawsuits alone cost firms $346.4 million, a fourfold increase from the year before ( Bryant, 2010). However, going beyond the legal aspects, the Glass Ceiling Commission (2012) found that "Organizations which excel at leveraging diversity (including the

hiring and advancement of women and nonwhite men into senior management jobs, and providing a climate conducive to contributions from people of diverse backgrounds) will experience better financial performance in the long run than organizations which are not effective in managing diversity." These organizations will also get more government contracts. The Department of Labor does not look favorably on companies that do not hire minorities. The Obama administration threatened to take away $5 million in government contracts from Leprino Foods for "discriminating against qualified African-American, Asian and Hispanic applicants." Negative environment also lead to other significant cost reductions. Employees who are not treated fairly due to gender, race, or sexual orientation become dissatisfied with their work and much less committed to their employer and equally less productive or even counterproductive due to a hostile environment. When their work slides, so does the company's profitability. In addition, the attitudes of these employees can negatively impact the productivity of other people who are not facing discrimination. Beyond all of these considerations is the concept of justice or ethics, regardless of the laws in place and economic motivations.

Researchers continue to debate on how to increase the numbers of women and people of color in American corporations. Given the numbers noted above, the influence of Title VII is not encouraging (if Title VII did not exist, the statistics could not be much lower). According to Bartlett (2009), employment discrimination scholars have proposed Title VII reforms to make it easier to prove discrimination in the courts and expand liability situations. Such reforms are backed by those who believe strong legal norms are critical to addressing the problem. Yet, notes

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Bartlett, it is incorrect to assume that strengthening the laws will actually improve the situation. She points to social science research that implicit bias is invisible and largely unintended as well as not easily attainable through legal coercion. Excessive legal control and pressure undermine

people's commitment to nondiscrimination norms. Rather, there are other factors that need to be put into place to alter a corporation's employment composition. Bartlett reports that people whose motivation to act in nondiscriminatory ways is based on an internal commitment to nondiscriminatory norms, or what she calls "good intentions" are less likely to participate in stereotyping than those individuals who feel pressured by the law. Further, people internalize nondiscrimination values best when they when having a greater sense of autonomy, competence,

and relatedness. Workplace conditions that support these values include strong, unambiguous norms, trust, teamwork, leadership, positive example, and opportunities to grow and advance.

Legal coercion can result in repercussions that are more likely to increase employment discrimination than to reduce it. Rather than strengthening antidiscrimination laws, the most effective way to create workplace justice is to restructure work in a manner that supports innate tolerance. Doing so will decrease actions that are biased and unlawful and, simultaneously, will make people feel better about ourselves. Thus. before establishing further legal tools and assuming that greater coercion will bring better results, more attention must be given to the negative impact of such tools and to alternative measures that may better encourage people's adherence to nondiscrimination norms.

Green and Kaley (2008) report that social science research reveals that discriminatory biases and reliance on stereotypes in the workplace are not always conscious or motivated by

personal prejudice; the degree and effect of bias on employment decisions are instead more influenced by the work environment itself. Legal scholars are accordingly assuming a "cognitive turn" in their approach to discrimination. Articles such as Linda Hamilton Krieger's The Content

of Our Categories and Susan Sturm's Second Generation Employment Discrimination represent a transition in the status of discrimination from mostly serious exclusion to decisions contaminated by implicit biases. Social scientists and legal scholars and practitioners are starting to identify some of the organizational practices that can encourage or discourage such biased

decisions in the workplace. Green and Kalie, for example, report that researchers find that

formal personnel procedures and accountability can decrease gender and racial stereotyping in

personnel decisions. Such studies provide other employers with a means for lowering discriminatory decisions about the labor force, as well as emphasizing to employers, attorneys and consultants that employers play a significant role in decreasing discrimination even when

implicit biases and unconscious reliance on stereotypes are driving that discrimination.

Gelfand et al (2007), for example, demonstrate ways in which aspects of organizations - such as formal and informal structure, organizational culture, leadership, strategy, human resource systems, and organizational climates may add to or support discrimination. The authors recognize that the relationship between certain organizational-level processes and existing levels of discrimination is necessarily mediated by individual cognitions and interpersonal behaviors.

Furthermore, they realize that organizations do not exist in a vacuum but rather they exchange resources and information with the external environment. Thus. it is also necessary to look at environmental factors such as legal, economic, and social milieu that act as input into the

organization that are relevant to the phenomenon of discrimination. It is necessary to see how these environmental factors interact with such organizational throughputs as organizational structure and culture, leadership, strategy, human resource systems, and organizational climate. Gelfand et al (2007) also suggest that additional studies be conducted on how individuals

perceive the alignment of organizational processes and structures in relationship to discrimination and the consequences these perceptions have on companies. If managers believe that discrimination issues are dealt with across the organization, they will less likely feel

accountable and motivated to be watchdogs against such biased behavior. Increasingly, research must take a systems approach to discrimination where the interrelationship between processes and structures is thought to be as essential as documenting their independent influence on discrimination.

With global expansion, the problem of organizational impact on discrimination decisions becomes even more complex and problematic. Gelfand et al (2007) write that many companies may simply take the road of least resistance and not transfer their own American practices when expanding to another country. A critical concern is the way that companies that are in the process of establishing a global organizational environment try to relate the culture for intolerance for discrimination that is derived from Westerns practices, values, and laws, with those of other cultures. For instance, in some countries, legal restrictions keep women in the local context from filling certain jobs. Further, contrary to the U.S. civil rights act, gender can be considered a bona fide occupational qualification. Although American-based employees operating on foreign soil are still technically protected by the civil rights laws, women and minorities may still face overt and covert discrimination in other internationally. Studies find that U.S. female expatriates, for example, experience over prejudice and discrimination from host nationals.

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Organizations need to critically analyze how their structures and culture, internal processes and practices separately and collectively foster and perpetuate discrimination to determine how they can make changes that affect these biases. It is only through making concerted efforts across their organization in many different areas that they can alter the status quo.

Every year, Fortune magazine publishes a list of the companies that are best for minorities and women due to the having the most employees in these categories. If studies are correct in theorizing that organizational structure is a primary means to reducing or eliminating internal discrimination, then these organizations should act as role models in their culture, processes and procedures. If they do, then other organizations can learn from them. If not, then what similarities exist between these companies that make them such positive companies for women and people of color?


Best Cos. rank

U.S. employees

% minorities

Baptist Health South Florida




Methodist Hospital




Intercontinental Hotels Group




Four Seasons Hotels & Resorts




Marriott International




Kimpton Hotels & Restaurants




Scripps Health








Men's Wearhouse








Camden Property Trust




Capital One




Navy Federal Credit Union








Children's Healthcare of Atlanta




Whole Foods Market








Darden Restaurants








Atlantic Health








Fortune explains that these firms make an effort not only to have minorities and women in their ranks, but also o retain and promote them. They actively interact with outside minority communities and make management accountable for diversity efforts. The level of diversity reflects on the company's culture, where people of color and women feel they belong in all levels of work. All companies have diversity programs, but it is necessary to look at behavior and how they act in their daily work. Involvement in diversity efforts begins with senior management, which shapes the culture as a whole. It is up to senior management to set the direction and push the status quo. They keep on raising the bar.


This report will determine what factors will be best incorporated into an organizational structure to make it most prone toward promoting an unbiased and fair environment where all people, regardless of their background have an equal opportunity and the ability to succeed. To the contrary, it will provide insights into the type of environment that leads to a perpetuation of increase of discriminatory practices.