Outcome: Successfully withdrawn following the company’s commitment to provide comprehensive workforce composition data by gender and EEO race/ ethnicity categories and enhance public disclosures of its inclusion and diversity practices in its 2019 CSR report.
The business case for workforce diversity is compelling. McKinsey & Company, for example, found in 2015, and in a larger study in 2017 that highly diverse executive teams had higher returns on equity and earnings performance than those with low diversity. ISS Analytics examined companies with CEO tenure of at least three years, and found those that combined gender diversity in the boardroom and the C-Suite showed the best results in terms of risk-adjusted quality of performance. (ISS Analytics /Governance Insights/October, 2018)
Xilinx’s board is committed to a policy of inclusiveness when selecting new board candidates. Xilinx believes “Diversity is essential to fostering a culture of innovation and creativity that can change the world.” Yet, the company has minimal disclosure of its diversity and inclusion initiatives and how it tracks performance of these initiatives.
Recent incidences of sexual harassment and misconduct across industries are creating investment risks in the form of financial and legal liabilities. In assessing how companies are reducing homogeneity and uneven power dynamics in the workplace, factors that can foster harassment, investors are seeking evidence that companies are taking meaningful steps to build a diverse and inclusive workplace.
Further, lack of diversity among high tech workers is a central public policy concern according to the U.S. Equal Employment Opportunity Commission. In 2014, the Commission reported that the high-tech sector employed a larger share of whites, Asian Americans, and men, and a smaller share of African-Americans, Hispanics and women than the “overall private industry”.
Peers including Adobe Systems, Cisco, F5 Networks, and Palo Alto Network publish workforce statistics, including annual Equal Employment Opportunity (EEO-1) reports, as well as descriptions of initiatives implemented to build a more diverse and inclusive culture. Intel set targets for raising the percentage of women and underrepresented minorities in their workforce. Symantec created a sub-goal of increasing its percentage of women in leadership (Director-level and above) to 30 percent by 2020. Financial services sector companies, similarly, have begun setting diversity targets. Citigroup, in August 2018, announced plans to reverse “falling diversity” by setting public quantitative goals and holding senior leaders accountable for meeting them.
An effective inclusion and diversity strategy requires inclusive leadership and accountability.
RESOLVED: Shareholders request that Xilinx prepare a diversity report, at 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 focused on increasing diversity and inclusion in the workplace.
Supporting Statement: A report adequate for investors to assess strategy and performance would include disclosures, such as a review of appropriate time-bound benchmarks for judging current and future progress, and practices in use to ensure progress can be achieved, for example, the extent to which incentive compensation packages include diversity and inclusion goals.