Outcome: Successfully withdrawn in exchange for Visa agreeing to disclose annual EEO-1 workforce diversity data as well as its strategies to drive diversity & inclusion improvements, including talent and pipeline initiatives, and strategies by which leadership will track performance and accountability.
McKinsey & Company found companies with highly diverse executive teams had higher returns on equity and earnings performance than those with low diversity, and a May 2014 study found gender diverse teams were better at driving “radical innovation”.
Visa states that “embracing diversity and supporting those who are underrepresented has become much more than a conversation about doing the right thing. Today [it] has become a business imperative and the companies who get that are winning in the market.”
However, Visa does not disclose workforce data, or share results of diversity initiatives. Shareholders have insufficient information to determine if the company has a diverse workforce or has been successful in expanding diversity.
In a 2015 analysis of diversity programs and performance by Calvert Investments, Visa ranked 10% and 20% below its peers Mastercard and Citigroup, respectively, on a scale of 1 to 100.
Lack of diversity among high tech workers is a central public policy concern according to the U.S. Equal Employment Opportunity Commission. In 2014, the Commission reported that the high-tech sector employed a larger share of whites, Asian Americans, and men, and a smaller share of African-Americans, Hispanics and women than the “overall private industry”.
According to a USA Today analysis of 2014 Computing Research Association data, “[t]op universities turn out black and Hispanic computer science and computer engineering graduates at twice the rate that leading technology companies hire them.”
Many industry peers provide EEO-1 data, describe programs, while acknowledging slow progress toward achieving greater diversity. Leading tech firms such as Intel are disclosing EEO-1 data and setting diversity goals. The company set a public, time-bound goal for hiring women and underrepresented minorities and tied a portion of every employee’s 2015 variable compensation to achieving its goal. In August, 2015 Intel reported that it exceeded its target of 40 percent hires of women, blacks, Hispanics and Native Americans in the first six months of the year.
Further, more than two dozen startups and venture capital firms, motivated by the efforts of Kapor Capital, have begun sharing strategies and setting diversity metrics.
Diversity benchmarks can help ensure companies that are hiring hundreds of technology professionals, such as Visa, create workforces necessary to compete effectively. Companies that are publicly accountable to diversity goals are most likely to make rapid progress toward achieving their goals.
RESOLVED: Shareholders request that Visa prepare a diversity report, at reasonable cost and omitting confidential information, available to investors including:
1. A chart identifying employees according to gender and race in major EEOC-defined job categories, listing numbers or percentages in each category;
2. A description of policies/programs focused on increasing gender and racial diversity in the workplace.
Supporting Statement: A report adequate for investors to assess strategy and performance would include a review of appropriate time-bound benchmarks for judging current and future progress, and details of policies and practices designed to reduce unconscious bias in hiring and to build mentorship among staff of color.