JPMorgan Chase: Diversity in the Workplace
BE IT RESOLVED: Shareholders request that JPMorgan Chase & Co. publish annually a report assessing the Company's diversity and inclusion efforts, at reasonable expense and excluding proprietary information. At a minimum the report should include:
the process that the Board follows for assessing the effectiveness of its diversity and inclusion programs,
the Board’s assessment of program effectiveness, as reflected in any goals, metrics, and trends related to its promotion, recruitment and retention of protected classes of employees.
SUPPORTING STATEMENT: Investors seek quantitative, comparable data to understand the effectiveness of the company’s diversity, equity, and inclusion programs.
WHEREAS: Numerous studies have pointed to the corporate benefits of a diverse workforce. These include:
Companies with the strongest racial and ethnic diversity are 35% more likely to have financial returns above their industry medians.
Companies in the top quartile for gender diversity are 21% more likely to outperform on profitability and 27% more likely to have superior value creation.
A 2019 study of the S&P 500 by the Wall Street Journal found that the 20 most diverse companies had an average annual five year stock return that was 5.8% higher than the 20 least-diverse companies.
Despite such benefits, significant barriers exist for diverse employees advancing within their careers. Women enter the workforce in almost equal numbers as men (48%). However, they only comprise 22% of the executive suite; as a percentage of representation, this indicates a drop of 26%. Similarly, people of color comprise 33% of entry level positions, but only 13% of the c-suite.
On its website, JPMorgan Chase states it “will recruit, hire, retain, develop and promote the best talent–with an emphasis on underrepresented groups–to ensure our businesses can continue to grow and provide sustained value for our clients, customers, employees and shareholders.”
However, the company does not disclose meaningful statistics that allow investors to determine the effectiveness of its human capital management as it relates to workplace diversity. Stakeholders may become concerned that JPMorgan Chase’s statements are corporate puffery, language described by the United States Federal Trade Commission as marketing exaggerations intended to “puff up” products and not able to be relied upon by consumers and investors.
Investors have reason to be wary, as JPMorgan Chase has settled at least three discrimination suits between 2017-2019, costing the company over $80 million.
Investor desire for information on this issue is significant. In June, 2019, $1.74 trillion in represented assets released an Investor Statement which spoke to the importance of increased corporate transparency on workplace equity data. As it stated:
Resolution Details
Company: JPMorgan Chase & Co.
Lead Filers:
As You Sow
Year: 2020
Filing Date:
December 2019
Initiative(s): Diversity & Gender Equality
Status: Agreement Reached; Resolution Withdrawn