|
Today, we’re talking about our very own DiversIQ Transparency Score: what it is, how we developed it, and what companies are best-in-class in our book.
|
TRANSPARENCY SCORE
What is the DiversIQ Transparency Score?
When we first started sifting through human capital data and company disclosures, it quickly became apparent we needed to analyze all this data in our own way and make it easy to digest, especially given the lack of reporting structure. We developed the DiversIQ Transparency Score to measure how transparent public companies are and base a company’s score on whether or not they disclose quantitative metrics across 4 big buckets: Workforce Representation, Board of Directors, Employee Development, and Pay Equity.
Today, we are taking a look at what best-in-class looks like – what all companies should aspire to – when it comes to reporting information in each of these areas.
WORKFORCE REPRESENTATION
Ford: Supplemental Public EEO-1 Data as Best Practice
Our measure of transparency for workforce representation is based on disclosure of the overall workforce, C-Suite, and at least one leadership level by gender, age, and race/ethnicity, and US representation overall for veterans, people with disabilities, and LGBTQ+. This also includes EEO-1 data, intersectional (gender + race/ethnicity) representation data which is required to be reported to the federal government for any company with at least 100 employees. Up until a few years ago, this information stayed anonymous for the most part, but today, the expectation has become that companies, especially large corporations, disclose this information to stakeholders on an annual basis. Over 75% of S&P 500 companies now make this data public.
Ford started making their EEO-1 data public in 2020, and they also include a supplemental file which reorganizes the same data into their organizational structure. We believe this is best practice and should be emulated by other companies that want to be super transparent but also translate the information into industry and/or company-relevant structure.
WORKFORCE REPRESENTATION
Perrigo: DEI Raw Numbers
While Perrigo does not disclose their EEO-1 data, they provide an extremely granular look at the raw number of people in each category, checking nearly every box except LGBTQ+.
BOARD OF DIRECTORS
Idex Corp: A Perfect BoD Score
Nasdaq’s Board Diversity Matrix has become the go-to reporting template for not only Nasdaq-listed firms but all public companies in the US. Companies are now expected to include diversity characteristics for each individual director – nearly 50% of S&P 500 companies now report the self-identified race/ethnicity of each individual director.
Some companies are going even further – for instance, Idex Corp discloses the gender, race/ethnicity, nationality, sexual orientation, disability, and military status for each director, 1 of only 4 companies of the over 1,000 in our universe to get a perfect score in this category.
EMPLOYEE DEVELOPMENT
M&T Bank: Granular Raw Number Breakdown
Many stakeholders have moved beyond representation and are pushing companies to disclose hiring, promotion, and turnover data by gender and race/ethnicity.
M&T Bank goes even further, disclosing those metrics by not only gender and race/ethnicity, but also age, disability, LGBTQ, and veteran and breaking each down by job category, aligning with how they report representation. They also report raw numbers instead of just percentages. The only reason they don’t get a perfect Employee Development from us is because they only report voluntary turnover, whereas at DiversIQ, we expect involuntary and/or overall turnover as well.
PAY EQUITY
Citigroup: Gold Standard for Pay Equity
The ‘gold standard’ for pay equity reporting in the US is for companies to disclose both a statistically adjusted and raw, unadjusted pay gap for women vs. men and people of color vs. white employees using total compensation (base, bonus, and equity). Only 14 companies in our universe currently disclose this level of detail, though around 25 companies have committed to do so in the future.
Citigroup was the first major company to disclose this info in 2019 and has continued to report for the last 5 years.