CBC Urges Investment Associations to Increase Diversity at Firms They Own
Today, the Congressional Black Caucus (CBC), led by CBC Chairman Cedric L. Richmond (D-LA-02) and the Co-Chairs of the CBC Diversity Taskforce, Rep. Barbara Lee (D-CA-13) and Rep. G. K. Butterfield (D-NC-01), made public a letter the CBC sent to investment associations urging them to leverage their influence at the firms they own to ensure these firms increase diversity in their board rooms, c-suites, and among their suppliers.
The letter was sent to the Investment Company Institute, Managed Funds Association, American Investment Council, and Institutional Limited Partners Association, and follows a letter the CBC sent last year urging industry associations to ensure their members increase diversity in the same areas. Although the CBC has seen some progress since last year’s letter was sent, is hasn’t seen nearly enough.
Read the Bloomberg article about the CBC’s letter here.
“Firms that look like America and that work with other firms that are diverse can better relate to customers in order to devise marketable solutions that are in demand,” the CBC wrote. “Thus, if you urge the boards and officers that govern the firms that you own to improve racial representation in key cohorts, you are not only pushing them to pursue good corporate citizenship, but also compelling them to move in a direction that is accretive to the bottom line.”
Full text of the letter is attached, online, and below.
March 14, 2018
To Whom It May Concern:
We write to urge you to leverage your influence as owners of major American public and private firms to ensure that American companies prioritize diversity in the board room, the c-suite and among suppliers of key goods and services. More specifically we urge you to have frank conversations with the firms that you own, either in part or in their entirety, about the need to immediately increase the representation of African-Americans in the afore mentioned cohorts.
Last year, the Congressional Black Caucus wrote major trade industries, in their capacity as member service organizations, to communicate with their members concerning the urgency of acting to diversify the ranks of boards of directors, executive teams, suppliers and policy advocates. We have enclosed that letter for your review. Almost a year later, we have seen some progress on the margins, but we continue to witness disappointing data in all the articulated focus areas. Since the CBC sent its letter, several CBC Members have engaged the corporate community in frank conversations, in person and via written communications on this topic. We have received assurances that these issues are a priority and that these discussions about how to proceed would be had at the highest levels of various firms and organizations. We have been encouraged by these conversations.
That being said, we are more than cognizant of the fact that corporate America must ultimately be accountable to its shareholders. As owners of the firms that we have been engaging, we strongly urge you to raise the profile and the volume of this conversation immediately. As we stated in the letter to the associations, there are business reasons for prioritizing racial diversity, apart from the obvious moral imperatives at play. We cited research that concluded that firms that were representative of American racial and ethnic diversity were actually more profitable. This research proved what we know to be intuitively correct. Firms that look like America and that work with other firms that are diverse can better relate to customers in order to devise marketable solutions that are in demand. Thus, if you urge the boards and officers that govern the firms that you own to improve racial representation in key cohorts, you are not only pushing them to pursue good corporate citizenship, but also compelling them to move in a direction that is accretive to the bottom line.
We applaud those of your members that have already made strides to push corporate America to recognize the impact its decisions have on the country. Now is not the time to relent. Now is the time to make a more aggressive push so that the firms that you own understand the seriousness of the issues. As policymakers, it is obvious to us that this is a matter that should have always been a priority and one that can have broad based positive outcomes for the U.S. economy. We simply ask that you reflect on this obvious conclusion and prioritize the conversation around improving representation of African-Americans at all levels of the firms that you own. As owners, you exercise disproportionate influence over these firms. Many of you, or your members, also directly exercise control over these firms via seats on boards of directors. You are in a position of power to create positive change. With great power comes great responsibility. We stand ready to partner with you in this regard.
Thank you for your consideration in this important matter.
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