Diversity Pays Off

Here's why major companies now pay attention to their diversity policies and practices. Any stockholder would find these performance statistics persuasive.

For the fourth year in a row, the DiversityInc Top 50 companies, expressed as a stock index, beat the Standard & Poor's 500, the Dow Jones Industrial Average and the Nasdaq on a 10-, five- and one-year basis, documenting the connection between superior diversity management and excellent corporate governance, which produces a consistent return on equity for investors.

Key findings from The 2007 DiversityInc Top 50 Companies competition:

• The Top 50 hire 42 percent people of color; the U.S. work force is 29 percent people of color*
• Although Top 50 companies employ only 5 percent of the U.S. work force, they employ 17 percent of the college-educated people of color*
• Twenty-five percent of Top 50 companies' management are people of color, compared with 12 percent people of color in management nationwide*
• One hundred percent of the Top 50 offer domestic-partner benefits for same-sex couples, compared with 53 percent of Fortune 500 companies. Seventy-four percent of the Top 50 include gender orientation in their nondiscrimination policies, compared with only 24 percent of the Fortune 500*
• Top 50 companies spend 9.7 percent of their procurement budgets with minority- and women-owned suppliers, compared with just 2 percent nationally*
• Ninety-six percent of the Top 50 companies link executive compensation to diversity goals
• Ninety percent of Top 50 CEOs sign off on executive compensation tied to diversity, compared with 72 percent last year*

"Actual management practices show an emphasis on human factors, both internally and externally, that simply doesn't exist in the typical U.S. corporation," said Visconti. "Considering the difference translates to stock performance, we think this demonstrates that diversity management is a serious business differentiator."