In 2020 companies took up the cause of racial equity. Now the challenge is accountability. ‘It really starts from the top.’

·8 min read

Before several Chicago-area companies pledged in 2020 to diversify their ranks in response to calls for racial equity, Beam Suntory was on its way to hiring its first chief diversity and inclusion officer.

The Chicago-based maker of Jim Beam bourbon and other spirits spent two years developing goals to recruit, retain and advance people of color and women. Those efforts led to the creation of a role that would hold the company accountable to its diversity commitments, and by summer, recruitment was well underway.

“We have to have a workforce that is more diverse, because quite honestly our consumers are diverse,” said Paula Erickson, the company’s chief human resources officer.

Adding a chief diversity officer is one step companies are taking after the racial reckoning spurred by the death of George Floyd at the hands of Minneapolis police last May. Frequently, people of color and women are appointed to the roles.

As companies promise to publicly hold themselves accountable, more are detailing their plans. Strategies include recruiting from historically Black universities, enhancing employee benefits like parental leave to increase the number of women in leadership roles and expanding leadership development programs to create a talent pipeline.

Among the 100 largest U.S. companies, 16% of executive-suite positions are held by non-whites and a quarter of executive roles are held by women, according to a 2020 study from Stanford University of Fortune 100 companies.

There is growing demand from the public, consumers and shareholders for more disclosure on these commitments, including how effective they are, said David Larcker, a professor at the Stanford Graduate School of Business and an author of the report.

“Where do those people end up, are there real programs to remove biases and are people getting promoted? There is a big push for companies to provide those things,” he said.

Illinois soon will offer a closer look at one measure of the diversity of companies based here. A law that took effect Jan. 1 requires publicly traded companies headquartered in the state to provide information on the gender, racial and ethnic diversity of their boards to the Illinois Secretary of State. The legislation directs the University of Illinois to provide an analysis by March 1 using the data. Originally, lawmakers considered legislation that would have required companies to have at least one woman, African American and Latino on their boards.

So far, 78 companies have provided a response, department spokesman Dave Druker said.

It remains to be seen how successful companies will be at keeping these promises, but corporations are clear about one thing: The workplace of tomorrow will change.

In November, Beam Suntory tapped Victoria Russell, a Black female executive who worked at Papa John’s and Jack Daniel’s maker Brown-Forman, as its chief diversity and inclusion officer.

Part of her role will be to help the company increase the racial diversity of its U.S. workforce by 45% and expand the number of women in leadership roles by 50% by 2030. The company has about 5,000 employees globally, including some 550 in Chicago.

“I think in 2021 we are beyond pleading the business case for D&I (diversity and inclusion). If nothing else, 2020 has demonstrated the implications of not understanding the importance of this work and the role of D&I leaders,” Russell said in an email.

Currently, about 33% of leadership roles at Beam Suntory are held by women, and midlevel positions are about equally split between men and women, said Erickson, who leads the HR department.

But challenges remain in recruiting and promoting Black and Latino workers. About 13% of its overall U.S. workforce are from racial or ethnic groups other than white, Erickson said.

Financial services firms have also recently announced ambitious diversity goals.

Last fall, major banks like BMO Harris, Fifth Third Bank and JPMorgan Chase announced multi-billion-dollar initiatives to increase racial equity, including increased lending services to customers and recruiting employees from Black and Latino communities in Chicago.

BMO is partnering with Cara, a local workforce development organization, to recruit, train and place people from underemployed neighborhoods in Chicago, including Austin and Little Village, in customer service roles at the bank. Eleven people from racially diverse backgrounds were hired through the program, which is part of Mayor Lori Lightfoot’s Invest South/West initiative aimed at addressing economic disparity in underserved communities across the city.

The bank discovered challenges some people face like the lack of access to transportation, said Fellicia Foster, BMO’s vice president and U.S. head of inclusion and diversity. People hired through the program were placed in bank branches with access to public transit, she said.

“That was something that came out as an opportunity for us to really address the unique needs of the individuals within that community,” Foster said.

The bank also launched an initiative to increase the number of people of color in senior leadership roles to 30% or greater by 2025. BMO has about 14,000 employees in the U.S., about half of them in the Chicago area.

People of color hold about 20% of those positions, said Tracie Morris, BMO’s U.S. chief human resources officer and chief inclusion officer.

“What we want to do moving forward is to take that effort and amplify it,” Morris said. “We have done well, but we can do more.”

Some companies have improved diversity through apprenticeships, talent development and mentoring programs started years ago. After last year, more businesses are hoping to expand these efforts.

Chicago United, an organization focused on advancing multiracial leadership in executive ranks and boardrooms, received calls from several companies since the Floyd protests wanting to address inequities in the workplace and chart a path forward for racially diverse employees, president and CEO Tiffany Hamel Johnson said.

“I think that with where we are coming out with COVID-19 and racial injustice, the retention piece is going to be a big piece and incorporating a culture of inclusion will be something employees and new applicants will be looking at,” Johnson said.

One way the organization is helping companies is through its nine-month program designed to help employees of color develop within their company. Since its launch in January 2019, the organization has trained about a dozen participants from companies including ComEd and Nicor Gas, she said.

About 43% of participants were promoted at their firms either during or after completing the program, she said.

Stan Jones, 40, of Plainfield, Ill., has worked as an engineer for Nicor Gas and took part in the program last year. He was assigned a mentor, a colleague from Nicor, who asked him to consider applying to higher level positions within the company. In August, Jones was promoted to a new role that involves managing the flow of goods and services at the utility’s headquarters.

“I think a lot of the conversations I had with my mentor outside of the program, and the ideas that were brought up, helped me have an open mind to be willing to consider things outside of my traditional comfort zone,” he said.

Chicago-based Adtalem Global Education, the former owner of DeVry University, set out to change the makeup of its workforce after the appointment of CEO and Chairman Lisa Wardell in 2016. Four years ago, there were almost no people of color in executive, board or manager roles at the company, said Stephen Beard, chief operating officer.

Now, half of senior leadership roles are occupied by people of color, including Wardell, who is Black. The number of women in those roles increased from 23% in 2016 to 38% last year, Beard said. Women and people of color account for 75% of Adtalem’s C-suite, group presidents and senior vice presidents. Just three of its nine board members are white men.

One way Adtalem has reached that benchmark is by tying managers’ performance goals to diversity, including recruitment of people of color and women.

“It really starts from the top,” Beard said.

Beard said Adtalem has leveled the playing field by eliminating certain requirements for those positions.

“One important thing we wanted to do is not require prior board experience. That’s one barrier that’s allowed people of color to serve as board members. We gave them that first opportunity by dropping that requirement,” he said.

Global consulting firm Accenture is using several programs, including apprenticeships, to create a talent pipeline and help people of color move up within the company.

Joan Taylor, 29, started out as an apprentice in the IT department in 2018 after graduating Wilbur Wright College, and was hired a year later when she was named software engineering senior analyst.

The skills from the apprenticeship alone weren’t what helped her grow at the firm. The relationships she built with colleagues and department heads throughout her first year were crucial in her moving up at the company, said Taylor, of Chicago’s Gold Coast neighborhood.

Without investing in programs aimed to advance the careers of people of color, Taylor said it would be challenging for a company to truly commit to diversity and inclusion.

“It’s hard to set up diversity and inclusion when you don’t have any or you are keeping them out of the room,” she said.

Accenture, which has a more than 6,000 employees in Chicago, announced in September plans to increase the share of Black workers from 9% to 12% and Latino employees from 9.5% to 13%, which would represent about a 60% increase in the number of diverse employees companywide.

In the U.S., Black employees make up about 5% of Accenture’s more than 23,000 executives, and 4.9% are Hispanic, according to the company.