In the corridors of corporate America, where power intricately shapes the business landscape, a disheartening truth remains—there’s an invisible struggle for Hispanic/Latino1 inclusion on corporate boards. While the glass ceilings for women, non-whites, and LGBTQ+ individuals have been hotly debated and gradually cracked, the underrepresentation of Latino professionals in boardrooms remains a deeply rooted problem. It is an issue that transcends mere appearances, existing beyond the surface-level optics of diversity and requiring our collective attention to bring about real change.
As we prepare for 2024 and beyond, the evolution of corporate inclusion concepts and approaches will, and should, encompass and uplift the Latino community. It is one of the fastest growing and most influential demographics in the United States that is generating $3.2 trillion in GDP as measured by expenditure.
THE INVISIBLE STRUGGLE
The United States has always been celebrated as a land of opportunity, a place where hard work and determination can open doors to success. While this is undoubtedly true for many, there remains a stark contrast when we look at the composition of corporate boards. Latino professionals, despite their talents, drive, and contributions to the nation’s economy, are disproportionately underrepresented in these influential positions. The Latino Corporate Directors Association (LCDA) 2023 Latino Board Monitor presents a compelling snapshot of progress and shines a light on the journey toward greater Latino representation in corporate boardrooms. The statistics paint a promising picture, showcasing a noteworthy 1.7 percent increase in Latino representation on Fortune 500 boards since 2020, a trend that mirrors similar progress on Fortune 1000 boards.
As we applaud these achievements, we must also confront the truth that looms on the horizon. A recent report from the Alliance for Board Diversity delivers a sobering forecast: by the year 2060, Latinos are projected to make up a substantial 27.5 percent of the US population, yet concurrently, it is estimated that they will hold a mere 9.2 percent of Fortune 500 board positions. This stark contrast highlights a pressing need for change and increased representation. What’s even more disconcerting is the projection that other marginalized communities, specifically the African American/Black and Asian/Pacific Islander communities, are on track to achieve proportional representation to their US population as early as 2030, leaving Latinos effectively invisible in the boardroom.
THE CONSEQUENCES OF UNDERREPRESENTATION
The presence of Latinos in corporate boardrooms is not solely a matter of fulfilling social responsibility; it represents a strategic imperative with far-reaching economic significance. With the Latino community experiencing rapid growth and wielding significant influence in the United States, their involvement in corporate leadership becomes an essential pathway to draw on an extensive, untapped market potential. Neglecting to incorporate Latino perspectives into corporate decision-making poses a risk, as it hinders the ability for businesses to engage with this dynamic consumer base, and its estimated untapped market potential of over $660 billion.
Latino consumers play a pivotal role in driving the US economy. With their purchasing power steadily on the rise, they represent a significant and growing market segment. According to the latest report by the Latino Donor Collaborative, the US Latino cohort GDP places the US Latino economy as the fifth largest in the world, surpassing the economies of France, the United Kingdom, and India. Companies that overlook or underestimate the influence of this demographic risk missing out on a substantial source of revenue and growth. By having Latinos in corporate boardrooms, businesses gain a competitive advantage through a deeper understanding of the preferences, needs, and aspirations of this consumer base. This insight can lead to the development of products, services, and marketing strategies that resonate with Latino consumers, ultimately driving increased sales and market share.
Furthermore, diversity in corporate leadership fosters innovation and creativity. When different perspectives, experiences, and cultural backgrounds are represented at the highest levels of decision-making, organizations are better equipped to develop innovative solutions and products. Research consistently shows that diverse firms outperform their peers. By tapping into the talents and experiences of Latino professionals, businesses can bolster their competitive edge and position themselves for long-term success.
In conclusion, the business case for Latino inclusion on corporate boards is not only about achieving social equity but also about capitalizing on a burgeoning consumer market, fostering innovation, and ensuring a sustainable future for companies in an increasingly diverse and interconnected world.
THE INVISIBILITY FACTOR: ENDURING RECRUITING BIASES
While progress has been made in increasing Latino representation on corporate boards, the enduring recruiting biases within corporate America continue to act as a formidable barrier. These biases often stem from deep-rooted stereotypes and an overreliance on visible, physical characteristics as indicators of underrepresented talent.
Using visible physical characteristics and diversity markers such as Hispanic surnames and ability to speak Spanish as a means of identifying Latino talent is not only unfair but also perpetuates a fundamental misunderstanding of the Latino community. Latinos, like any other group, are incredibly diverse, and their backgrounds, experiences, and appearances vary significantly. Reducing the rich tapestry of the Latino community to a set of physical characteristics, the ability to speak Spanish, or a common Hispanic surname is not only ineffective but also fails to acknowledge the individuality and unique talents that each Latino professional brings to the table.
One of the key reasons why this approach is shortsighted is that it overlooks the fact that Latinos are not a monolith, particularly in their appearance. The misconception that all Latinos have a specific skin tone not only ignores the diversity within the community but also feeds into stereotypes and unconscious biases. By reducing Latinos to a specific physical appearance, we perpetuate the harmful notion that one must fit a particular mold to be considered a valuable asset or diverse enough in the corporate world. In reality, Latino professionals encompass a wide range of appearances, reflecting their diverse heritage and backgrounds.
Moreover, the assumption that all Latinos speak Spanish or have common Hispanic surnames is another misconception that unfairly excludes many talented individuals. The Latino community is multilingual, with individuals speaking a variety of languages, including English, Portuguese, and indigenous languages. Some Latinos may not have Hispanic surnames due to their mixed heritage or other familial factors. Using language and surnames as a sole marker for identifying Latino talent is not only inaccurate but also limits the pool of potential candidates.
In essence, this form of talent identification perpetuates the notion that diversity is merely a matter of optics, rather than a commitment to inclusivity, equity, and the recognition of the unique skills and contributions that Latino individuals bring to the corporate table.
SOLUTIONS TO SOLVE THE INVISIBILITY FACTOR
Addressing enduring recruiting and unconscious biases about the Latino community necessitates a multifaceted approach that involves not only companies but also their allies, recruiting professionals, and society as a whole. By recognizing and actively dismantling these biases, we can create a corporate landscape that values skills, qualifications, and diversity without relying on superficial characteristics.
SOLUTION 1 Incorporate Recruiting Policy Requiring the Use of Diverse Sourcing Tactics
To tackle enduring recruiting biases, organizations must adopt a recruiting policy that actively seeks candidates from diverse sources. This means reaching out to a broader array of networks, educational institutions, and professional organizations like LCDA to identify potential talent. To help, develop a source checklist for each executive and board search to ensure you engage each resource. By expanding the pool of candidates, companies can increase the chances of discovering skilled professionals who might have been overlooked under traditional recruiting practices. This approach not only broadens the talent pipeline but also challenges the perpetuation of unconscious biases by promoting diversity as a fundamental recruitment strategy.
SOLUTION 2 Promote Disaggregate Disclosure in Company Filings
To uncover pools of talent not before discovered, companies should take proactive steps to promote transparency through disaggregated data disclosure in their filings. This approach goes beyond mere transparency; it also places a strong emphasis on reducing the misidentification of ethnic and racial identity, which is a common issue in the Latino community. By adopting this approach, it offers a pathway to accurate and fair representation.
SOLUTION 3 Request Inclusive Recruiting Teams
Request that the team responsible for your search demonstrate racial and ethnic diversity. As a first-generation Mexican American, I’ve had a firsthand view of the challenges and biases inherent in the recruitment process. My own experiences have shown that a diverse recruiting team can infuse a wide range of perspectives into the process. These inclusive teams can recognize the unique qualifications, skills, and potential contributions of candidates, transcending surface-level attributes. My personal journey within the search industry has underscored the critical role of diverse voices in positions of influence, serving as advocates for equity and inclusion.
As we continue to push for progress, it is essential to note that we have not met our goal set in 2020 of tripling Latino representation on Fortune 1000 corporate boards by 2023. Despite our efforts, we have seen only a 1.7 percent increase from 2020 to 2023. This underscores the immediate need for a systematic, solution-based approach to inclusive sourcing and recruiting, with a particular focus on marginalized communities, beginning with the Latino community. Increased Latino representation in corporate governance is both a moral imperative and undeniably advantageous for business.
BOARD OVERSIGHT QUESTIONS
- How is the company actively working to identify and mitigate unconscious bias in the board recruitment process to ensure a fair and equitable selection of candidates?
- How does the company ensure that the inclusion of candidates from any community, particularly those that are underrepresented, is integrated with business strategies, including market growth, product development, customer engagement, and employee satisfaction, rather than being solely a diversity-focused, feel-good initiative?
- What strategies does the nominating and governance chair and the head of talent employ to source candidates from diverse networks and channels to broaden the talent pool for board positions and C-suite roles?
- Is the company leveraging the influence of Employee Resource Groups (ERGs) effectively in terms of raising awareness of talent internally and externally?
- How will the company address self-identification, including race/ethnicity, gender, and LGBTQ+ status, of the board members and executive leadership and ensure the information is easily accessible to the consumer and employee?
- Do you believe the board’s and executive leadership’s culture welcomes peers to discuss their lived experiences and leverages the unique strengths and facets of diversity of each individual?
1 Americans who identify themselves as being of Spanish-speaking background and trace their origin or descent from Mexico, Puerto Rico, Cuba, Central and South America, and other Spanish-speaking countries.