Outcome: Successfully withdrawn with a commitment from BNY Mellon to expand its diversity and inclusion reporting with a focus on the executive team. The expanded report will discuss how BNY Mellon sets specific diversity goals for leaders, including the executive leadership team, to hold them accountable for improved workplace diversity, with particular emphasis on diversifying senior management.
“Our Diversity is our greatest strength” – Bank of New York Mellon, Global Diversity and Inclusion report
We believe that diversity, inclusive of gender and race, are critical attributes of a well-functioning executive team and necessary to meaningfully drive diversity throughout an organization.
Currently, Bank of New York Mellon (BK) has limited racial/ethnic diversity on the executive team.
Despite the strong business case for cultivating a diverse workforce, white males continue to dominate executive roles at Fortune 500 companies. BK has made progress in acknowledging the value of diversity and inclusion, but the company has failed to deploy this strategy among senior leadership. BK’s transparency on workforce diversity is commendable, but the workforce data illustrates the company’s slow progress in building racial and ethnic diversity into the top ranks. As reported by the company, more than a third of employees identify as non-white, but 50% of these employees hold Administrative Support roles. Similarly only 21% of First/Mid Officials and Managers roles are non-white. The representation of non-white employees rapidly diminishes with rank with less than five percent of the executive team identifying as racially or ethnically diverse.
A growing body of empirical research indicates a significant positive relationship between firm value and the percentage of women and minorities people of color in senior leadership roles. Diversity of gender, but also of race and ethnicity are critical to a well-composed leadership team. A McKinsey & Company report found that companies in the top quartile for gender or racial ethnicity are more likely to financially outperform national industry medians. Specifically, companies with greater ethnic diversity were 35 percent more likely to outperform. For every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent . Without a truly diverse executive team we are concerned BK may be leaving money and value on the table.
BK has gone to great lengths to define a diversity and inclusion strategy, however this approach has not succeeded at the highest ranks at the Company – arguably some of the most influential decision makers at the Company. Efforts of this strategy include employee resource groups, mentoring, inclusion policies and practices, key performance indicators, and education outreach. However, these efforts do not appear to be sufficient.
In its 2017 CSR report, BK implicitly acknowledges that it is not making significant progress towards its 2020 goal to “advance diverse representation in senior-level ranks”. We believe now is the time to set goals, track and report progress and hold executives accountable to expanding diversity beyond current levels.
RESOLVED: Shareholders request that the Board of Directors prepare a report (at a reasonable cost, in a reasonable time, and omitting confidential information) providing its assessment of the current state of its executive leadership team diversity and its plan to make the company’s executive leadership team more diverse in terms of race, ethnicity, and gender.