To that end, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) created a shareholder proposal requesting companies adopt a diverse candidate search policy on the basis that workforce diversity enhances company performance, Brandon Rees, deputy director of corporations and capital at AFL-CIO, told HR Dive in an interview.
Although there's been a spike in investment in training for diversity, equity and inclusion (DEI) following the calls for racial justice in 2020, a refresh in talent acquisition may also be needed to make a real difference in an organization, according to experts. Company shareholders are increasingly having a say in DEI practices; some have even hold boards and executive management teams legally liable for a lack of diversity within the organization.
The AFL-CIO proposal also was "motivated in part because of the significant social policy issue of diversity, which has been highlighted by the Black Lives Matter Movement and the #MeToo movement," Rees said. The measure provides "flexibility to the board of directors to design the specific terms of a Diverse Candidate Search Policy with respect to race, ethnicity, gender, sexual orientation, disability and other groups," according to the document.
"The AFL-CIO owns shares in companies and we submit shareholder resolutions to hold companies more accountable, which benefits working people's retirement savings," Rees explained. "Union members' pension plans are also invested. We don't just file shareholder resolutions because we're investors, we are interested in promoting the retirement security of all union members."
Video game companies Activision Blizzard, Electronic Arts and tech giant Amazon are among companies that have received the proposal, Rees said. Traditionally, there has been "underrepresentation of women and minorities in leadership positions" at tech companies, he said. Although the industry has made efforts toward DEI, progress has been slow, according to TechCrunch.
"There have also been historic concerns regarding women in technology including in the gaming industry," Rees said. Of the 144 executives in the top 14 global gaming companies, 121 are men and 23 are women, according to a September report by 20-first, a global gender-balance consultancy. Activation Blizzard has one woman on its executive leadership team, and Electronic Arts has two, the report found.
The AFL-CIO's proposal was sent to the gaming companies "in part because their own EEO-1 disclosed data showed a lack of representation of women," Rees said. Electronic Arts "indicated a willingness to dialogue with us regarding the proposal," he said. But Activision had not offered to discuss the proposal with AFL-CIO.
In a statement emailed to HR Dive, Activision President and Chief Operating Officer Daniel Alegre confirmed that outside lawyers submitted a letter to the Security and Exchanges Commission (SEC) responding to the AFL-CIO's proposal for the company's annual meeting proxy statement. The company asked permission to be excluded from the proposal, Rees said.
"We don't need the AFL-CIO proposal to reaffirm what we already do — encourage every hiring manager to consider diverse candidates for every position," Alegre's statement said. "We believe in our existing hiring practices." The company also ensures "any candidate — regardless of backgrounds, ethnicities, genders, races and sexual orientations — is considered for each and every open role," he said.
The AFL-CIO's shareholder proposal for diversity in hiring is modeled after the National Football League's (NFL) adoption of the "Rooney Rule" in which teams interview underrepresented candidates for head coaching and other senior positions. "The Rooney Rule does not dictate who should be hired, but instead widens the talent pool by requiring a diverse set of candidates for consideration before a hiring decision is made," according to the proposal. After the rule was implemented in the NFL in 2003, "the percentage of head coaches from a minority background rose to as high as 22%, compared to six percent before the rule was introduced," according to Newsweek. But as progress has stalled over the years, the NFL added new measures in May 2020 to expand the Rooney Rule.
Similar to Activation Blizzard, Amazon also submitted a letter to the SEC for permission to exclude the shareholder proposal from its proxy statement.
"The company fully supports the objective of this proposal, which is to improve workforce diversity," according to a statement an Amazon representative emailed HR Dive based on the public letter sent to the SEC Jan. 25. Amazon has "many programs in place across its worldwide operations that are designed to achieve that objective," the letter stated. As company leadership has indicated its "commitment to advancing diversity, equity, and inclusion as well as fostering a company culture that values and respects diversity and inclusion," Amazon "has put into place many policies and programs that fully align with the objective of the proposal," according to the document. The company has also "set and achieved a goal to double the number of Black directors and vice presidents" and has committed to "doubling representation again in 2021," the document stated.
The leader of Amazon's Global Diversity, Equity and Inclusion team Elizabeth Nieto is leaving the company unexpectedly after two year in her role, according to an internal memo to employees obtained by GeekWire, the publication reported Jan. 29. Nieto is moving to Spotify and will be replaced on an interim basis by Alfonso Palacios, who has worked at Amazon for 15 years.
The AFL-CIO also filed a shareholder resolution requesting a diverse candidate search policy at several banks, Rees said. Upon reaching an agreement, the AFL-CIO withdrew the proposal last month, he said. Bank of America, Citigroup, JPMorgan Chase, U.S. Bancorp and Wells Fargo publicly committed in January to requiring a diverse slate of applicants when hiring for company positions. "Financial service companies have adopted Rooney Rule style policies to cover their employee hiring, which we thought was a very positive development," Rees said.