Corporate EEO Compliance

This truth isn't a shocking revelation to those who have always proposed that companies who manage their Diversity in a healthy manner will reap positive benefits. However, it is new that we now have something more definitive to hang our sombreros and caps.

The Ohio State University Fisher College of Business, along with assistance from the University of Delaware, Michigan State University, and Florida A&M University, has published a paper touting the benefits of having a good diversity plan. The paper indicates a well thought out and enforced diversity plan can have a positive impact on financial performance.

In the 34 page study found at:  http://fisher.osu.edu/fin/dice/seminars/diversity20.pdf, the statistical correlation between diversity management and financial performance is clearly outlined. The report states, "Contrary to prior studies, we find that affirmative action awards and discrimination lawsuit settlements have no significant impact on stock prices. The filing of discrimination lawsuits, however, does produce a negative and significant price reaction. We contend that our results indicate competitive advantages for firms that promote and manager diversity, rather than firms which meet minimum affirmative action standards." Further, the paper's introduction begins with, "Human resource theorists expect improved performance and increased value for companies providing programs that integrate diversity initiatives. At the very least, market share and productivity may be in jeopardy for firms that lag in developing a diverse workforce or that fail to create an environment that encourages positive interactions among heterogeneous groups of workers."

"The evidence suggests that it is not compliance with affirmative action standards, but proper management of diversity initiatives that is viewed positively by shareholders." The report is very thorough in its examination of the link between creating a diverse and respectful working environment and the financial performance of the company. "The evidence suggests that it is not compliance with affirmative action standards, but proper management of diversity initiatives that is viewed positively by shareholders."

Fortune 500 magazine published their fifth annual Best Companies for Minorities list for 2002.  They are listed below:

2002 Rank     Company       Revenues $

1          Fannie Mae           $50,803,000

2          Sempra Energy  $8,029,000

3          Denny's  $1,391,000

4          SBC Communications  $45,908, 000

5          McDonald's   $14,870,000

6          PNM Resources   $2,352,000

7          Southern California Energy  $12,184,000

8          U.S. Postal Service   $65,834,000

9          Freddie Mac   $35,523,000

10        BellSouth   $24,130,000

11        UnionBanCal   $2,912,000

12        Lucent Technologies $25,132,000

13        Consolidated Edison  $9,634,000

14        Xerox  $16,502,000

15        PepsiCo   $26,935,000

16        Colgate-Palmolive   $9,428,000

17        Wyndham International  $2,105,000

18        Silicon Graphics  $1,854,000

19        Hyatt  $3,950,000

20        Procter & Gamble  $39,244,000

21        DTE Energy   $7,849,000

22        Hilton Hotels  $3,050,000

23        Levi Strauss   $4,259,000

24        Marriott International  $10,152,000

25        United Parcel Service  $30,646,000

26        Applied Materials  $7,343,000

27        Washington Mutual  $17,692,000

28        TIAA-CREF   $24,231,000

29        American Express  $22,582,000

30        PG&E Corp.   $22,959,000

31        Verizon Communications  $67,190,000

32        Coca-Cola  $20,092,000

33        Avon Products  $5,995,000

34        Cisco Systems   $22,293,000

35        Abbott Laboratories  $16,285,000

36        Nordstrom  $5,634,000

37        S.C. Johnson & Son  $4,500,000

38        J.P. Morgan Chase  $50,429,000

39        Darden Restaurants  $4,021,000

40        Pitney Bowes  $4,691,000

41        Bank of America Corp.  $52,641,000

42        Knight-Ridder  $2,900,000

43        Eastman Kodak  $13,234,000

44        Allstate   $28,865,000

45        Intel  $26,539,000

46        AFLAC  $9,598,000

47        Citigroup  $112,022,000

48        Prudential Financial  $27,177,000

49        Ford Motor   $162,412,000

50        UAL  $16,138,000