Intercontinental Exchange – Diversity Targets (2022)
Outcome: Successfully withdrawn following the company setting race and gender diversity targets and process commitments, including linear increases YOY and a guarantee of interviewing a minimum of two diverse candidates for open senior-level positions.
The business case for workforce diversity is compelling. McKinsey & Company’s ongoing studies find that highly diverse executive teams have higher returns on equity and earnings performance than those with low diversity. Companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have industry-leading profitability. Companies in the top quartile for ethnic/cultural diversity were 36 percent more likely to have industry-leading profitability. (1) A key finding is that ethnicity is consistently linked to higher outperformance than gender is.
Leaders believe that finding diverse talent is the biggest challenge in changing workforce demographics. However, recruitment is the beginning of the problem. Diversity is more difficult to find in upper ranks because of the day-to-day obstacles people of color face related to organizational and cultural issues, retention, and promotion. (2) People of color represented about 40 percent of the entry-level workforce in the financial services industry in 2018. However, this number steadily declines by 75 percent to the C-suite, ending at 10 percent. The most pronounced attrition rates for people of color occur early in the pipeline and promotion rates for people of color lag those of white employees at nearly every level.
One way that companies can address the issue is through its recruitment and retention practices, working to provide equity, inclusion, and justice at each step in the career progression. As our society asks more of all of us when it comes to race, a beginning step that a company like ours can take is establishing meaningful targets and programs to create a diverse pipeline and workforce. Salesforce, Estee Lauder, Goldman Sachs, Microsoft, BlackRock are examples of companies that have set quantitative, time-bound diverse representation targets.
Intercontinental Exchange (ICE) reports that the company’s workforce should reflect the broader communities within which it operates. (3) In the states of New York, Georgia, and California (ICE’s biggest workforces), the Black population percentage represents 17.6 percent, 32.6 percent, and 6.5 percent of the population while the Hispanic or Latino population represents 19.3 percent, 9.9 percent, and 39.4 percent. (4) ICE diversity statistics are incongruent with these states’ demographics. Shareholders are increasingly concerned about material human capital management risk to both their companies and their portfolios and seek clearly established targets and goals that promote diverse workforces reflective of the communities in which companies operate.
Resolved: Shareholders request that ICE set public company-wide, quantitative, and time-bound targets to increase the representation of minorities, particularly at the managerial and senior levels of the company.