Priceline Group – Workforce Diversity (2018)
Outcome: Withdrawn following a commitment from the company to report diversity and relevant metrics in its first sustainability report by the end of 2019.
There is mounting evidence that diversity and inclusion are key components of business sustainability and strong human capital management:
• A McKinsey & Company report found that companies with highly diverse executive teams had higher returns on equity and earnings performance than those with low diversity (“Diversity Matters,” McKinsey, 2015).
• McKinsey research also showed that companies in the top quartiles for gender and racial/ethnic diversity were more likely to have above average financial returns. Companies with greater racial/ethnic diversity were 35 percent more likely to outperform (Ibid).
• In a 2013 Catalyst report, racial and gender diversity was positively associated with more customers, increased sales revenue, and greater relative profits (“Why Diversity Matters, Catalyst Information Center, 2013).
However, Priceline Group does not disclose comprehensive workforce data, or disclose results of diversity initiatives. Consequently, shareholders lack information to determine whether Priceline Group is successfully fostering diversity and inclusion across the business and in senior roles. Without this information, Priceline Group cannot persuasively demonstrate that it is capturing the potential business value associated with a diverse workforce.
Transparency and goals regarding gender and racial diversity can help companies hiring hundreds of employees, such as Priceline Group, create competitive workforces. Moreover, studies suggest that companies that integrate environmental, social, and governance (ESG) factors into business strategy reduce reputational, legal, and regulatory risks and improve long-term performance. And companies that are publicly accountable to diversity goals are most likely to make rapid progress toward achieving their goals.
Improving workforce diversity and inclusion requires proactive policies and programs. Family leave policies, for example, can play a role. McKinsey reports that paid parental leave and on-site child care can significantly impact women’s ability to rise to higher productivity roles, with implications for the gender pay gap. The best performing companies have implemented gender neutral policies that improve the workplace for men, women, LGBTQ workers, and adoptive parents.
Investors seek clarity on how Priceline Group is driving strong human capital management via diversity and inclusion. Publishing workforce composition data is an acknowledged good practice among internet and technology companies, many of which (e.g. Microsoft, Intel, IBM) have set diversity goals and begun tying parts of executive pay to such goals.
Shareholders request that Priceline Group prepare an annual diversity report, at a reasonable cost and omitting confidential information, available to investors including:
1. A chart identifying employees according to gender and race in major EEOC-defined job categories, listing numbers or percentages in each category;
2. A description of policies/programs/goals focused on increasing gender and racial diversity in the workplace.
A report adequate for investors to assess strategy and performance can include historical data, a review of appropriate time-bound benchmarks for judging current and future progress, and details of policies and practices designed to reduce unconscious bias in hiring, to build mentorship, training programs, work-life initiatives, and workforce stability.