Latinos left behind as companies diversify
Cisco Systems, the multinational tech giant based in San Jose, has no Latino on its board of directors.
Ditto for Intel, the world’s largest semiconductor manufacturer, headquartered in Santa Clara, Calif.
Ditto for Tesla — which moved offices to Austin from Palo Alto last year — and for a host of other Fortune 100 companies with millions of Latino customers, employees and suppliers. Among them: Amazon, Fedex, Albertsons, Kroger, Walgreens Boots Alliance, Exxon Mobil, Citigroup, Jpmorgan Chase, United Parcel Service and Berkshire Hathaway.
Latinos are the nation’s largest ethnic or racial minority — accounting for 18.9 percent of the population — and its fastestgrowing group. In California, 40 percent of residents trace their roots to Mexico or Central or South America.
Yet even as companies tout their commitment to diversity, equity and inclusion, Latinos are far less likely to ascend to the pinnacle of business power in mostly white boardrooms than Black Americans, who account for 13.6% of the U.S. population, or Asian Americans at 6.1%.
“We remain a blind spot for corporate America,” said Esther Aguilera, chief executive of the Latino Corporate Directors Assn., an advocacy group founded in 2013. “The narrative has been, ‘We can’t find qualified Latinos.’ But there’s ample talent.”
Across a huge screen at a recent San Diego business conference, before 6,300 executives and professionals, Aguilera splashed the names of 47 of the nation’s Fortune 100 corporations with no Latino directors.
Beyond the naming and shaming, she contrasted Latinos with other people of color. A slide showed what she called “the stark reality” of S&P 500 boards: Black directors at 11%, Asian directors at 6% and Latino directors at 5% in 2022.
Companies, she said later, promote people based on “perceptions of who’s worthy … and Latinos are at the bottom of the barrel. Yet Latino talent is right under their nose.”
The issue of who benefits from inclusion initiatives — and who doesn’t — is at the heart of affirmative action debates across the nation. California ballot initiatives have outlawed preferences in public university admissions and government contracting. A high-profile case before the U.S. Supreme Court argues that Asian students lose out when colleges favor Black and Latino applicants.
“We don’t want anybody to be under-engaged, whether they’re African American or Asian American or Anglo American. But we do want to see Latino and Latina Americans at par,” said Solomon Trujillo, a former chief executive of telecommunications firm U.S. West who joined Western Union’s board in 2012.
“When you hear CEOS and everybody talk about ‘I believe in diversity and inclusion,’ I say show me the numbers.”
Trujillo co-founded the Latino Donor Collaborative, a Beverly Hills nonprofit that publishes an annual Latino GDP report. Its latest research, by scholars at UCLA and California Lutheran University, pegs the economic impact of the nation’s 62 million Latino consumers at $2.8 trillion in 2020. And in 2018, he co-founded L’attitude, the conference where Aguilera shared her findings, as a way to showcase Latino contributions.
Trujillo condemns the dearth of Latino board members, given the size of the Latino market and the importance of cultural knowledge. Companies without Latino directors risk “leaving money on the table,” he said.
From the dais at L’attitude, he asked attendees: “How many of you use an Exxon station to refuel? Guess who are the most people on the road, commuting to work every day? It tends to be Latinos in many of the major markets in our country. So you have to ask, why don’t they want a Latino or Latina on their board?”
An Exxon Mobil spokesperson declined to comment on the lack of Latinos on the company’s 13-member board, which has two Black directors, but said the board “believes diversity of thought, experience, and background is critical for successful governance.”
Cisco and Intel spokespeople said their leaders value diversity but declined to elaborate on why their boards, which include Black and Asian directors, have no Latinos. Other Fortune 100 companies called out for lacking Latino directors offered statements of support for diversity without addressing the composition of their own boards.
Bold tactics, mixed results
Corporate boards, ranging from about five to more than a dozen members, wrestle with complex challenges, including fluctuating profits, shareholder revolts and corporate raiders. Also on their agendas: environmental impact, climate change, social justice and how the company is governed.
Directors — chosen for their expertise in strategy, finances, legal issues, digital transformation and marketing — attend an average of eight meetings a year and their compensation at the 500 most valuable U.S. companies averaged $316,000 last year, according to consulting firm Spencer Stuart.
“Corporate boards are where companies’ culture is established, how they make decisions and target resources,” said Assemblyman Chris Holden (Dpasadena), a former Black caucus chair and the main author of a landmark California law in 2020 that mandated racial and ethnic diversity on company boards.
Diverse directors can offer fresh perspectives.
Aguilera cites a large consumer products company, which she declined to name, whose board planned to look for new markets abroad. A Latina director pushed back. “She argued, ‘We have an untapped market here, right in our back yard, which is the Latino market.’ She influenced growth and shareholder value.”
But frustration over the slow pace of progress is spurring bold tactics. Latino Voices for Boardroom Equity, a coalition including civil rights groups Unidosus and the Mexican American Legal Defense and Educational Fund, has launched a public online tracker showing how many Latinos, if any, are on the board of each Fortune 1000 company.
So far, 650 lack any Latino director. The group’s mission: Increase the ratio of Latino directors to 1 in 5 — equivalent to the Latino share of the U.S. population.
The coalition first targeted U.S. companies based in the Golden State, and not just due to its huge Latino population. The group aimed to boost enforcement of that 2020 director law, Assembly Bill 979, which was the first in the nation to target race and ethnicity.
The measure required publicly traded companies based in California to appoint directors from “underrepresented” communities.” The definition included individuals self-identifying as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native, gay, lesbian, bisexual or transgender.
An earlier law in 2018, also a first, had ordered California companies to appoint female directors. Both board measures are mired in litigation. Conservative challengers argue that any quotas violate the California Constitution’s equal-protection clause.
“We are outraged that companies like Facebook, Netflix, Paypal, PG&E, Molina Healthcare, Ross Stores, Chipotle Mexican Grill, El Pollo Loco, and Del Taco Restaurants have no Latinos on their board of directors,” declared a coalition statement in late 2020, amplified by a social media campaign.
The strategy drew results. Since the call-out, seven of the nine companies have added Latinos to their boards — all except Netflix and Molina Healthcare.
A Molina spokesperson said the company’s next new director will be Latino or Latina. A Netflix spokesperson said, “We’ve met with the Latino Voices for Boardroom Equity and look forward to continued discussions.”
Over the last two years, the coalition has written to more than 580 chief executives of publicly traded California corporations declaring it “unacceptable” that “your company profits from Latino culture and Latino purchasing power, but your corporation has no Latinos on its board of directors.”
The letters, offering to provide lists of “highly qualified” candidates, request meetings to discuss diversity plans “inclusive of Latinos.” But the tally is so far underwhelming: Just 3.7 percent of the directors of California’s largest 505 companies are Latino, according to a January survey by the data analytics firm ISS Corporate Solutions.
Why boards lack Latinos
Latino leaders say their corporate struggles are in part related to a dearth of positive portrayals in movies and television along with the media’s intense focus on illegal immigration, leading to negative stereotyping.
“We’re often seen as the housekeepers, the farmworkers, the mechanics,” said former California Assemblywoman Cristina Garcia (D-bell Gardens), co-author of the board diversity bill. “Culturally, this sense of what we are eligible to do limits us.”
Among U.S. professionals, a quarter are Latino, a five-point gain over the last decade and higher than Latinos’ general population share, according to a Mckinsey report last year.
But recently a Latina financier who manages client assets of $2 billion told Aguilera that she has attended business meetings where “someone will tell her, ‘Oh, can you clean the table?’ That’s people’s perceptions,” Aguilera said.
Momentum and timing are also factors.
The Executive Leadership Council, a group aimed at promoting Black executives, was formed in 1986 — 27 years before the Latino Corporate Directors Assn. And George Floyd’s murder in May 2020, while fueling the push to hold boards accountable on diversity, boosted the appointment of Black directors far more than those from other racial and ethnic groups.
Among the largest 3,000 public corporations, the proportion of Black directors has surged 90 percent since 2019 — more than any other racial or ethnic group, according to an ISS Corporate Solutions analysis.
By comparison, the share of Asians rose 55 percent and Latinos, 37 percent. The proportion of white directors fell 9 percent to 79.9 percent of the more than 26,000 directors.
“The civil unrest brought issues of equity and disenfranchisement to the fore,” said Holden, the California diversity law author. “In a state with a majority minority population, why weren’t we seeing greater progress?”
After the Floyd video, “you had a lot of corporations making promises about diversity,” cgarcia said. “We saw an opportunity — let’s make good on those promises, starting with corporate boards.”