Latinos on boards: 2015 annual report
The boardroom conjures up an image of power: freshly-pressed suits, the polished mahogany round table, a panoramic view from the high-rises of Center City. Nearly every organization — from Fortune 500 companies to local nonprofits to government entities — has a board of directors, but they don’t often make the news.
While not all of them are c-suite executives, board members collectively wield a great share of political and economic power. A board defines the culture of an organization from executive management down to entry-level positions. It should come as no surprise that these groups of makers and shakers have historically been lacking in minority participation.
AL DÍA presents the first ever survey of Latino inclusion on the executive board level in Philadelphia. We looked at 40 of the top boards of directors across four categories: publicly-traded companies, government-related institutions, arts and culture, and eds and meds.
In this sample, there were just 24 Latinos occupying a grand total of 1,143 board seats.
Our focus here was specific to those groups headquartered in Philadelphia county, with two exceptions in the suburbs. It is by no means definitive, but we nonetheless hope that it will open up dialogue about board diversity, and offer some scraps of guidance to young Latinos who hope to one day rise to the boardroom’s challenges.
National problem, local stage
Here’s the big picture: Only three percent of Fortune 500 companies have a Latino on their board, despite Latinos representing 16.7 percent of the U.S. population. The bigger picture: 870 companies of the Fortune 1000 companies did not have a single Latino on the board in 2012, according to a study by recruiting firm Korn/Ferry. No matter how big or small the sample crowd, lack of inclusion remains a prevalent issue.
Philadelphia’s board climate is no exception, our survey shows.
Although Latinos represent 13 percent of Philadelphia’s population, they occupy just 2 percent of the chairs on the boards. Of the 10 publicly-traded companies we looked at, three of 90 board seats were held by Latinos, with no Latinas. This figures are a hair less than those of Fortune 500 companies across the U.S., which we’ll get to more in a moment.
For most of the government-related boards in Philadelphia, some seats are appointed by either the city or the state. These appointments can make or break the lack of diversity at the executive level. For example, after Gov. Tom Wolf took office in Harrisburg this year, he appointed Antonio Fiol-Silva to the Delaware River Port Authority, who is now the only Latino to sit on that board. The commonwealth appoints one-third of Temple University’s board members.
Out of 200 directors between 10 boards in this category, we counted just five Latinos.
Our survey accounts for a broad range of honorary and status-based board appointments as well. We identified 432 total board members across the eds and meds industry, including health care providers like Independence Blue Cross. On 10 major boards there were 10 Latinos. Four of them sit on the board at Einstein Healthcare Network.
Arts and cultural institutions also have some large advisory boards, often with three-digit numbers of trustees. Out of the 10 organizations we surveyed, we found that Latinos held just six seats. Across all 40 boards, three Latinos occupied more than one seat. This means there are actually fewer Latinos represented (20 out of 1,143) than there are chairs occupied by Latinos (24 out of 1,143).
It should be noted that collecting data about boards from private organizations — especially some of the large healthcare providers in Philadelphia — was tedious. When information wasn’t available online, some institutions were often guarded about not just the names, but the number of total board seats and diversity of their occupants. Temple Health did not return our request for information about their board in time for this article. Moreover, some of board information we found online was often outdated or inaccurate.
Principle and profit: Why board diversity matters
As the president and CEO of the Hispanic Association on Corporate Responsibility (HACR), Cid Wilson’s job is to improve corporate diversity for Latinos across the U.S. on board-level and c-suite diversity, as well as general employment and procurement practices for major companies.
(AL DÍA is hosting an event with Wilson on November 12, where he will deliver a keynote address on this very topic.)
One of HACR’s less obvious and more difficult tasks is to improve the availability of seats. One of the biggest challenges when we talk about board diversification is that there is not a enough turnover. Board seats in some cases look like lifetime appointments.
To Wilson’s mind, the third barrier to diversity is that corporate America isn’t meeting minorities where they are.
“Corporations need to get away and rethink how they recruit Latinos,” he said. “Too often I hear that companies will only recruit from the Ivy League schools for these opportunities, despite the fact that we have an ample number of qualified Latinos that are graduating from Hispanic-serving institutions.”
Wilson says there is a trickle-down effect from the CEO to the entry-level employees. Latino presence on the board can change the way the entire institution markets, hires, does business with and allocates philanthropy to Latinos. In short, diversity doesn’t start and stop in the Human Resources department.
“When diversity and inclusion is discussed at the board level, now the CEO must be evaluated based on diversity and inclusion,” Wilson said.
There are profits to be made from inclusion, too. While three percent of Latinos occupy seats on Fortune 500 boards, only 1 percent of all seats are held by Latinas, and Wilson has an argument that goes something like this: Latinos have about $1.5 trillion of economic buying power. Roughly half of all adult Latinos in the U.S. are married, and about 90 percent of all major buying decisions in the Latino household are made by the women.
“What that means is that, of that 50 percent of the married Latinos, Latinas actually control 90 percent of the buying power,” Wilson said.
Factoring in the unmarried population, Wilson estimated that Latinas alone command between 65 to 70 percent of that $1.5 trillion economic buying power.
“If you’re a corporation trying to figure out how to capture Latino buying power, you’ve got to figure out how to capture the Latina buying power,” Wilson said. “And if you have a board of directors that has no Latinas on on it, then how are you going to really understand and prioritize the insights on how to sell to [the population as a whole]?”
Judge Nelson Díaz holds a seat on three prominent boards in Philadelphia: PECO, Temple University, and the Philadelphia Museum of Art. His analysis of the local problem echoes Wilson’s on the national level.
The biggest barrier against inclusion in Philly is the lack of “headhunters” who know how to find Latino talent. Secondly, Díaz says, “there are a lot of “elderly white males who don’t want to retire from the boards,” thus leaving few vacancies. The third issue? A lack of understanding about the fastest growing market in the country.
“We are trying to open the minds of the CEOs in this country and let them know that it is to their benefit, financially and otherwise, to include Latinos on corporate boards,” Díaz said.
Both in Philadelphia and throughout the country, corporate boards are some of the most prestigious and competitive positions. Their directors are paid handsomely. A Comcast director, for example, can be paid upwards of $350,000 a year to attend quarterly meetings and assist in other advisory duties throughout the year.
Getting on a Fortune 500 or even Fortune 1000 board requires a strong resumé, but also persistence. Varsovia Fernandez, president of the Greater Philadelphia Hispanic Chamber of Commerce, has been on the local director scene for years. Even with a seat on four boards, it’s not an easy road to the top.
“I’ll be honest, I’ve had interviews for positions on corporate boards and I haven’t gotten them. And what it comes down to is seasoned experience,” Fernandez said.
Fernandez counts herself lucky in that she was asked to sit on several boards, including the prestigious Pennsylvania Convention and Visitor’s Bureau (included in our survey). But for rising board members — especially Latinos — her best advice is to start learning about the organizations that interest you.
“The greatest challenges is getting up to speed and learning about it,” she said. “A lot of times people say, oh look, there’s the convention center, there’s the visitor’s bureau. But there’s a lot to it.”
Being board-ready isn’t a guarantee, however. Rev. Luis Cortés sits on the boards of Federal Home Loan Bank of Pittsburgh, Cancer Treatment Centers of America Eastern Region, and the Kimmel Center (included in our survey). Cortés notes that there are a number of exceptional Latino candidates in Philadelphia, but they seldom get recruited because the local corporations are isolated from the Latino business community.
“When the corporations need a Latino candidate they refer to businesses in New York or Chicago … so when they do have a Latino it’s a not a local Latino, it’s a Latino from outside the region,” Cortés said. “The way to close that gap is for the business community to do local searches now before they have a need [for new directors], and keep tabs on the individual Latinos for when the need arises.”
Gabriela Guaracao*, 28, is the youngest Philadelphian of Latin American descent to sit on any of the boards we surveyed. She is also one of seven Latinas, whereas there are 13 Latinos. Guaracao also serves on the executive board of the Young Friends of the PMA, a kind of training ground for millennials interested in working their way to the top. When she was being vetted for an official board seat at Einstein Healthcare Network, Guaracao said her experience volunteering in and around other institutions’ boards was looked upon rather well.
“It’s about getting involved and taking the onus upon yourself to attend planning meetings, for example, and work your way to the top. People see you’re interested in the institution after a couple months or a year of service,” Guaracao said.
Want to learn how to get on on a board of directors? We’ve identified the problems, now here’s some proactive advice from actual Latino directors about how to work your way into the boardroom.
Volunteer at for-profit and nonprofit institutions that have boards.
Seek out directorship positions geared towards millennials.
Develop a strong and diverse network of professionals.
Encourage corporate recruiters to seek talent at Latino-serving colleges and universities.
Learn as much as you can about a particular organization before you apply.
Keep an eye on organizations that are trying to diversify.
- Build your business and management experience.