Arkansas' Public Firms Lack Director Diversity

by Mark Hengel  on Monday, Jul. 28, 2008 12:00 am  

Mary Good, dean of the Donaghey College of Information Science & Systems Engineering at UALR, serves on Acxiom Corp.'s board of directors.

Arnold also serves on several volunteer boards, including the University of Arkansas for Medical Sciences Winthrop P. Rockefeller Cancer Institute Foundation Fund board. He said there are considerable differences between boards such as the institute's and the Bank of the Ozarks board, because the public company is profit driven.

Asked whether he could recommend any women or minorities to serve on a private board, he said, "We've got a membership of 6,500 people. There are easily between five and 10 people that I could recommend."

The Argument for Diversity

 

Williams said many of the nation's largest public companies have diversified their boards in response to criticism.

Williams pointed to a study conducted by the council in 2004. Of Fortune 100 companies, only 11 had no African-Americans.

Of Arkansas' 20 public companies, only two are ranked in the Fortune 100 - Wal-Mart Stores Inc. of Bentonville at No. 1 and Tyson Foods Inc. of Springdale at No. 88. Both companies have comparatively diverse boards of directors. Wal-Mart's 14-member board is composed of three women, two blacks and one Hispanic. Two women, one black and one Hispanic serve on Tyson's board.

While many of the largest private companies have diversified in response to criticism, Williams also said the fact that many of the nation's largest companies have the most diverse boards is evidence that diversity is good for business.

"We [the council] would say there does seem to be a correlation there showing that inclusion allows you to do more things," Williams said.

Williams expects the situation to improve, though. The council began about 20 years ago, with a membership of only 19. The pool of blacks from which a company could draw for board membership was small.

A study conducted by the council in 2005 - and which it is updating - shows that about 720 blacks now hold leadership positions within three levels of the CEO, Williams said. The number of blacks serving on corporate boards has also risen considerably since 1960, when none served on the boards of public companies. In 2004, more than 250 held directorships, according to a council study.

"That population initially was not there," Williams said. "But now that there is that segment, there is a greater depth of talent the companies can draw from."

Good said she expects the number of female and minority board members to increase in coming years as many of each group work their way up the corporate ladder.

"It will [increase] because the new young women who have come into the system over the past 15 to 20 years will make a difference. You have to give them time to mature," Good said.  

 

 

Please read our comments policy before commenting.
Search

Latest Arkansas Business Poll

Did the Fed make the right call on interest rates?