Embracing diversity can be good for business. But mandating it? That’s another question.
Associated Industries of Massachusetts on Monday became the latest business group to tout a major diversity and inclusion effort. We’re talking about the most diverse class of incoming directors in AIM’s history, a plan to spur more women- and minority-run companies to join, and the hiring of a consultant last month to develop a long-term strategy. As the state’s largest business association, AIM’s approach could set the tone for many of its roughly 4,000 corporate members.
But AIM also became one of the first groups to publicly oppose two bills on Beacon Hill that aim to diversify the Commonwealth’s C-suites and boardrooms.
One bill, filed by Representative Liz Malia, would require companies with at least 100 employees to annually report the gender and racial makeup of their senior management ranks. Another bill, from Senator Jason Lewis, would require a minimum number of women on the boards of publicly traded companies based in Massachusetts, and is modeled after a measure that became law last year in California. (Another Lewis-backed bill addresses diversity on state boards and commissions.)
AIM views both proposed laws as unfortunate intrusions into the private sector. Executive vice president Chris Geehern says his group’s position is simple: It’s not the appropriate role of government to tell employers who should be hired or put on their boards. Geehern says AIM’s initiative underscores the fact that employers already understand that diversity is a business imperative.
For AIM, the effort began with its board of directors last spring. Chairman Dan Kenary and other directors looked at the board, membership, and leadership. They realized that, despite some strides over the years, AIM was still falling short. They formed a diversity committee, led by board members Donna Latson Gittens and Gregory Buscone, to approach the issue in a systematic way.
Perhaps the first tangible result: The next incoming class of board members joins in May, and more than half are women or minorities. In comparison, white men occupy roughly two-thirds of the seats on the nearly 70-person board today, Geehern says. AIM is also in the midst of a search to replace its longtime chief executive, Rick Lord. Geehern can’t say much about it, although he confirmed that the candidates are on board with the group’s diversity push.
Talk to any other major business group in town, and they will rattle off their own efforts. Here are just a few. MassBio last year hired its first diversity and inclusion director to address the issue in the life sciences industry. The Massachusetts Business Roundtable just established a relationship with Latino networking group Conexion and is crafting a similar arrangement with The Partnership, a nonprofit that promotes minority professionals. The progressive Alliance for Business Leadership requires half of incoming board members to be women or people of color, while women hold nearly half of the New England Venture Capital Association’s board seats. Most business groups haven’t yet taken a position on the diversity bills — though AIM might have company on that front, too. MassBio chief executive Bob Coughlin probably speaks for many in the business community: While his group agrees with the intent, he says MassBio is unsure if government mandates are the best way to make a difference.
But some executives are already fans, if reluctant ones. Eastern Bank chief executive Bob Rivers, for example, supports both bills. Progress, he says, has simply been too slow among Boston’s boardrooms and executive ranks. The benefits of corporate diversity — curbing groupthink, recruiting and retaining talent — are well established. AIM’s Geehern offers up another benefit: survival. Geehern doesn’t think his century-old group can endure for 50 more years, let alone another 100, without making these kinds of changes. Market forces, in the end, could be a more powerful impetus than any mandate from the State House.