CHICAGO, Sept. 19, 2016 /PRNewswire/ -- Chicago United unveiled the findings of its biennial report, Inside Inclusion Featuring the Corporate Diversity Profile, which examines trends in the racial composition of board of directors and senior leadership positions in the top 50 Chicago-headquartered companies. The report revealed minimal gains in minority representation throughout executive ranks and examined its significant impact of earning power over minority groups' lifetimes.
In addition to leadership diversity trends, this year Chicago United partnered with the Federal Reserve Bank of Chicago to calculate earnings trajectories over a 40-year career of different races/ethnicities, genders and education levels using data from the U.S. Census Bureau. The results found that, compared to white males, most minorities experience significantly reduced lifetime earnings regardless of their level of educational achievement.
For example, minorities with professional degrees earn less than white males with similar levels of education:
- Over a lifetime, African American men will earn 74 percent of their white male counterparts' earnings.
- Caucasian females will earn 68 percent and African American females will earn 67 percent of what white males earn.
- Latino males will earn 71 percent and Latinas will earn only 55 percent of their white male counterparts' lifetime earnings.
- Asian females fare slightly better, earning 80 percent of white males' lifetime earnings.
- Asian males were the one exception to the trend, earning 6 percent more than white males over a lifetime.
"The fact that the majority of diverse professionals are subject to lesser lifetime earnings than their Caucasian counterparts, regardless of an equivalent education level, has corresponding negative impact on the ability to purchase homes, accumulate savings, pay for their children's education and build generational wealth. These findings reveal that inclusion is a necessary strategy in addressing disparities which are obviously not linked to educational differences," said Gloria Castillo, president and CEO of Chicago United. "It is clear that intentional action is needed now, more than ever, to implement leading inclusive business practices."
An analysis of the larger trends in racial diversity across Chicago's top 50 companies (based on revenue) shows incremental movement across three core areas, including boards of directors, C-suites and executive ranks:
- Minority representation on boards of directors increased from 12 percent to 14 percent between 2014 and 2016 with African Americans maintaining the largest percentage of representation at 8 percent.
- Minority representation in the C-suite grew by 1 percent between 2012 and 2014 from 7 percent to 8 percent and remained stagnant (8 percent) in 2016. African Americans, Asians and Hispanics are separated by no more than a couple of percentage points, showing representation levels of 4 percent, 3 percent and 2 percent, respectively.
- 19 out of 50 (38 percent) of Chicago companies have no ethnic diversity within their executive ranks and minority representation slipped between 2016 and 2014, decreasing from 10 percent to 9 percent.
"The people serving on board of directors and in the C-suite make decisions about where corporate investments are made. These critical decisions have a very direct impact on economic opportunity and who benefits in wealth creation," added Castillo. "In order to achieve equal representation in these leadership positions, I challenge our local leaders to consider what purposeful changes they can make to strengthen diversity within their organizations and positively impact the communities of Chicago."
To provide organizations with a roadmap to improve in areas critical to diversity and inclusion (D&I) advancement, Chicago United convened a team of leading diversity and human resources professionals to identify the most relevant challenges and best practices of Chicago's corporations. This taskforce, chaired by Warren M. Smith, America's career management leader at Ernst & Young LLP, together discovered insights that informed a Toolkit included within Inside Inclusion that offers insights into leading D&I practices and provides questions to keep leaders and stakeholders engaged in an ongoing dialogue around diversity and inclusion.
"The Toolkit provides an introspective review into an organization's talent agenda and how organizations can continue to advance their efforts," said Smith. "It provides a scalable framework that can be applied at the corporate or business-unit level—and that's what makes it so powerful."
To download a copy of 2016 Inside Inclusion Report, please visit chicago-united.org.
About Inside Inclusion
Inside Inclusion examined the top 50 Chicago-based public companies ranked by 2015 revenues as reported in the Crain's Chicago Business Book of Lists, December 2015. The number of incumbents and ethnicity was determined by reviewing company proxy statements.
Additionally, in collaboration with the Federal Reserve Bank of Chicago, an analysis was conducted by Maude Toussaint-Comeau, senior business economist in the community development and policy studies division of the economic research department, to help illustrate the earnings prospects of workers across stages of their career. The calculations are based on American Community Survey (ACS) 2010-2014 five-year estimates.
About Chicago United
Chicago United is a corporate membership, advocacy organization whose mission is to achieve parity in economic opportunity for people of color by advancing multiracial leadership in corporate governance, executive level management, and business diversity. Founded in 1968, the organization is focused on transforming the Chicago region into the most inclusive business ecosystem in the nation by engaging the top publicly and privately held corporations in leading talent management and inclusive diversity practices. Chicago United's signature programs include its Business Leaders of Color publication which showcases a diverse pool of corporate director candidates and the Five Forward Initiative, designed to invigorate job creation in communities of color by increasing the scale of large MBEs in the Chicago region.
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SOURCE Chicago United