A Commitment to Diversity & Inclusion

For more than 40 years the California Business Roundtable has confronted the issues critical to a healthy business climate and provided the leadership necessary to strengthen California’s economy and create jobs. CBRT’s mission and the composition of its membership provide it with the capacity to respond to calls for racial justice through meaningful, tangible actions and policy recommendations. These actions, if effectuated, will do more than strengthen our economy; they will address the structural barriers to inclusion for talented leaders of all backgrounds in both the public and private sector – a critical element to California’s long-term economic recovery.

The Business Case

McKinsey & Company, a CBRT member company, has investigated the business case for diversity on executive teams since 2015. Their findings include data sets from 1,000 large companies in 15 countries and the results remain compelling: In 2019, top-quartile companies outperformed those in the fourth quartile by 36 percent in profitability, slightly up from 33 percent and 35 percent in 2014. McKinsey’s data has also consistently found the likelihood of outperformance continues to be higher for diversity in ethnicity than for gender.

That said, progress around gender and ethnic diversity in corporate leadership teams continues to move at a glacial pace. In March 2020, the Latino Corporate Directors Association announced an analysis of 662 California headquartered, public companies and found that 35 percent of corporate boards are still all-white. More critically, the number of Black directors has stalled or, worse, declined. Real progress demands a systematic data-informed review of corporate structures, processes, procedures and (most of all) practices and a commitment on the part of companies to lean in on specific aspects of inclusion. To quote McKinsey: “Even relatively diverse companies face significant challenges in creating work environments characterized by inclusive leadership and accountability among managers, equality and fairness of opportunity, and openness and freedom from bias and discrimination.”

This will not be easy work and will require conversations about race and racism which will be uncomfortable for some, if not many. It will also require a sustained commitment by organizations like CBRT and the business leaders it represents.

Strategic Approach

Transparency, which leads to accountability and credibility

• Collecting qualitative and quantitative data from the California business community to identify gaps and opportunities to advance social justice goals.
• Communicating the gaps and holding business/industry sectors accountable through regular progress reports.
• Allowing CBRT members the opportunity to help drive initiatives through the strategic planning process and carrying out actions within their own companies.

A focus on opportunity structures and tackling biases in corporate California

• Continuous learning and understanding the role of biases in the board room.
• Improving mobility, leadership development and diverse talent pipelines.
• Supporting post-graduate education and training; developing methods to help executives decipher corporate culture, making it more accessible and inclusive.

A Long-term commitment

• This is the beginning of long-term change and an enduring commitment.
• CBRT’s decision making should be supported by evidence and relevant data.
• Continuing the dialogue long after this moment and active participation in advancing social justice in the future.