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, Newell Brands has limited racial/ethnic diversity on its Management Committee and Extended Leadership Committee. Two of the eighteen committee members are women.
The business case for workforce diversity is compelling. A growing body of research indicates a positive relationship between firm value and the percentage of women and minorities in senior leadership roles. 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, for every 10 percent increase in racial and ethnic diversity on the executive team, earnings before interest and taxes rise 0.8 percent . Without a truly diverse executive team we are concerned Newell Brands may be leaving money and value on the table.
The number of women and people of color in leadership roles at public companies remains remarkably low. Only nine percent of top executive roles in the Russell 3000 are held by women.
Many companies across industry sectors are setting goals and targets to address this significant issue. Intel has been tracking diversity data since 2014 and ties diversity goals to incentive compensation. In 2018, two years ahead of schedule, Intel achieved full representation of underrepresented minorities and women in its U.S. workforce. Symantec set a goal to increase the percentage of women in leadership (Director-level and above) to 30 percent by 2020. BP says it wants women in at least 25% of its group leadership roles by 2020. Citigroup, in August 2018, announced plans to reverse “falling diversity” by setting public quantitative goals and holding senior leaders accountable for meeting them.
Newell Brands has made some progress expanding board diversity. It is time, in our view, to extend the same focus and accountability to building diversity in its leadership ranks.
To address the lack of diversity in senior roles we believe the Board and senior leadership must set clear policies to attract, retain and promote women, including establishing and reporting on gender pay equity, formalizing mentor and sponsorship programs, and establishing gender-neutral family support programs.
Further, we believe that linking diversity performance metrics to senior executive compensation packages can sharpen management’s ability to manage human capital management risks, increase accountability and successfully reach inclusion and diversity goals
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.