Changing the narrative: The fight to have more Latinos on corporate boards
A LCDA/KPMG report found that Latinos make up 2.7% of Fortune 1000 board seats despite being a fifth of the population.
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The Latin American community in the U.S. have found new ways to contribute to the nation’s economy as well as involve themselves in topics of national interest over the years.
Forbes outlines that the group now contributes over $2.6 trillion to the U.S. economy, making up a quarter of the country’s gross domestic product.
This will only increase since the group is becoming a larger fraction of the population. In 1970 there were 9.6 million Latinos in the U.S. and they now stand at over 61 million.
With the Census Bureau projecting the Latino population to reach 111 million or represent nearly 30% of the U.S. population by 2060, mainstream media will soon have to abandon calling them a “minority” group.
Their influence in the pop culture sphere has been clear, especially with “Despacito” being the most streamed song of 2017 and Shakira performing at the halftime show of Super Bowl LIV.
Politics has been another point of growing success for Latinos as they have prominent leaders in both major political parties in Congress like Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Marco Rubio (R-Fla.).
President Joe Biden boasted to have a cabinet that “looks like America,” the positions of Secretaries of Education, Homeland Security and Health and Human Services were all given to Latinos.
All of this does not mean that the community is fully separated from the stereotypes that people associate them with. The perception of all Latinos working low-skill jobs and only caring about immigration issues have not gone away.
Whenever the group has recently featured in national headlines it mainly centers around the Central American migrant crisis or a path to citizenship for undocumented immigrants.
These issues are critical and do need to be resolved, but they do not represent where the Latino community in the U.S. is going.
An indicator of a change in the common narrative is the number of Latinos enrolled in higher education. In 2000, 1.4 million Latinos were in college and that figure grew to 3.27 million in 2017.
The final piece to erasing stereotypes associated with Latinos could be to see them gain prominence in an important field where they are drastically underrepresented and that is corporate America.
The group’s increase in population and college graduates are large steps in having them attain recognition in the business and finance sectors.
Publicly-listed American companies have quadrupled the Latino representation on their boards in the first quarter of 2021, but a Latino Corporate Directors Association/KPMG report revealed that after the increase they only make up 2.7% of Fortune 1000 board seats.
That figure is far from resembling the fact that Latinos are a fifth of the U.S. population.
The LCDA joined with Unidos US, LULAC, the US Hispanic Chamber of Commerce and other organizations last September to form Latino Voices Boardroom Equity.
Together they set a three part plan to better the inclusion of Latinos on corporate boards. The plan is calling for a tripling of Latino representation on public company boards by 2023, targeting corporations with no Latino representation and tracking their progress through publication of a quarterly scorecard.
Their second point will be a sizable task because the LCDA also found that 73% of 2020 Fortune 1000 companies lack a single Latino director on their board.
Although this year’s increase in Latino representation is not as significant as many would have hoped, this is not to say that companies have not been trying to raise these figures even more in recent years.
In December, Nasdaq asked for improved diversity among the 3,000 companies on its exchange through a proposal filed with the Security and Exchange Commission.
Having at least two diverse board members: a woman and someone who identifies as an underrepresented minority or LGBTQ is one of the new rules in the proposal.
As of last year 75% of Nasdaq’s companies fail to meet the suggested diversity requirements.
Another rule is that companies who do not disclose statistics on diversity could face being delisted from the exchange.
Inclusion and diversity are values that the higher ups in the exchange have wanted to promote in order to improve their image and revenue.
“If you don’t have those diverse voices that are helping lead the company, then, frankly, it can impede your progress, can impede your success, and you can make mistakes,” Nasdaq CEO Adena Friedman said.
In early March it was announced that the SEC decided to postpone a decision on accepting the new proposal. If a final decision is delayed again it might not be made until August.
Nasdaq unveiled amendments to their plan in February after receiving criticism for their original suggestions. The rules would be laxed for boards of five or fewer and they would companies a grace period for not meeting the diversity requirement because of a board vacancy.
They are the only ones wanting to bring different perspectives into board meetings across America.
At the 2020 World Economic Forum in Davos, Goldman Sachs CEO David Solomon announced that the firm would only underwrite Initial Public Offerings to private companies who have at least one diverse board member. The firm would raise the standard to two members in 2021for IPO clients.
Bloomberg reported that Goldman Sachs wants to also set a target of hiring 14% Latinos and 11% Blacks for entry-level analysts and associate positions.
Latinos do not dictate the pace of corporate America today, but their own strive coupled with initiatives proposed by some in the market could spell a prosperous tomorrow.