Equal employment opportunity is a key issue for many shareholders. The 1995 bipartisan Glass Ceiling Commission Study explains that a positive diversity record has a positive impact on the bottom line. Yet while women and minorities comprise 57% of the U.S. workforce, the Commission found that they represent only 3% of executive management positions.
Workplace discrimination has created a significant burden for shareholders due to the high cost of litigation, potential loss of government contracts, and the financial consequences of a damaged corporate image resulting from discrimination allegations. In several instances, including at Home Depot, the financial impact on shareholders has exceeded $100 million to settle discrimination lawsuits.
More than 150 major U.S. corporations now provide complete information on workforce diversity in public reports to their shareholders. Examples are Disney, Intel, K-Mart, May Department Stores, Merck, Monsanto, Sears, and Texaco. These companies and others provide reports describing diversity progress, challenges and detailed statistics. Often companies include this information in their annual reports.
RESOLVED: Shareholders request that the Board expand Home Depot’s annual Social Responsibility Report, at reasonable cost and omitting confidential information, to be made available to shareholders and employees by October 2000, to include:
1. A chart identifying the number and percentage of employees by gender and race in each of the nine Equal Employment Opportunity Commission defined job categories for 1999, 1998 and 1997.
2. A summary of policies and initiatives to advance equal opportunity for women and minorities into sales, managerial positions and other job classifications where they are found to be underutilized.
3. A report on any material litigation in which Home Depot is involved concerning race, gender or the physically challenged.
Over a dozen concerned institutional investors have filed this resolution urging Home Depot to be completely and publicly accountable for its efforts to achieve a discrimination-free workplace. Our investor coalition represents religious institutions, investment managers, mutual funds, as well as other organizations.
We congratulate Home Depot for taking an important step toward public accountability by including selected diversity data in its 1998 Social Responsibility Report. The information gives a broad picture of Home Depot s progress in meeting its diversity goals. But just as the Financial Accounting Standards Board sets the standards on how to report financial data, there are standards set forth by the Equal Employment Opportunity Commission (EEOC) on how to report diversity data. The data provided by Home Depot draw selectively from the job, gender and racial classifications that the EEOC has established, and in so doing, the report denies investors an adequate understanding of Home Depot s progress. Since the company already collects the data in the EEOC format, it would not be burdensome to include this information in its Social Responsibility Report.
We believe Home Depot aspires to real leadership on this issue and that it is making meaningful progress toward that end. Full disclosure is a powerful incentive for companies to achieve their equal opportunity objectives. Such accountability symbolizes management s strong dedication to a diverse workforce.