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Board diversity and race: Commitment or lip service

Despite increasing focus on racism and board diversity the trend is only increasing very slowly

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Diversity refers to differences in skills, expertise, experience, gender, race, age and background. Demographic (gender, race), experiential (abilities, skills) and cognitive factors (approach) are three broad but interlinked types of diversity which affect our identities. Corporate diversity refers to the extent to which the company keeps in view diversity as a factor in its hiring practices.   

Just last year, many brands stated their commitment to diversity as a tool for dismantling institutional racism, following the death of George Floyd. However diversity is not only considered important because it creates a positive public-facing image. Internally, it impacts how stakeholders perceive a business and it is important that the board should represent the diversity of its shareholders and external customers. While the condemnation of racism was appreciated, businesses came under increasing pressure in the corporate world to practically contribute towards ending racial discriminations within their organisations. Increasingly, companies are expected to ensure diversity on their boards – as the change should start from the top for the diversity to transcend down. This change should not be difficult to bring to the board if the commitment to diversity is real. 

One aspect of diversity which is women’s representation on the boards has increased over the years – thanks to pressure from institutional investors and legislative requirements. However, we still have a long way to go in terms of making our corporate boards racially diverse. 

Stats by the Registry of Corporate Directors reflect that 13% of the population of Black Americans have no representation in 37% of S & P 500 companies (a 2% improvement between 2018-19).

Based on the findings of the 2019 Annual Corporate Directors Survey, Directors who support the board’s racial/ethnic diversity fell from 34% in 2018 to 26% in 2019. 58% Directors feel that investors place too much focus on board diversity (up from 33%). Only 17% of directors support laws mandating diversity.

Missing Pieces Report: The Board Diversity Census of Women and Minorities on Fortune 500 Boards found that 82.5% of directors on boards of Fortune 500 companies and 81% of new members between 2016-2020 were white. Minority directors rose from 14.4% to 17.5% between 2016-20 which is slightly higher compared to the increase in the last six years (at 13.3 % in 2010). One of the concerning findings was that between 2018 and June 2020, Black men on the boards fell by 1.5% though Black women increased by 18%, which supports the fact that focus on racial diversity is beginning to get some momentum only recently.

An analysis by ISS Corporate Solutions, Inc. (ICS) found that during July 2020 to May 2021, of all the newly appointed directors, 32% were Black, rising from 11% last year. This change is more visible in larger companies. 

Despite increasing focus on racism and board diversity the trend is only increasing very slowly. One possible explanation for this is the lack of diversity in controlling key roles. Even if the directors from the minority racial groups are equally qualified they are less likely to be given a leadership role which may potentially be due to bias according to a study. 

It is true that the criteria for appointment at board level is competence and is driven by the interest of the company and its shareholders. However, the evidence as of now suggests that board diversity adds to performance, and the lack of diversity is merely rooted in bias. A study of 366 public companies in the UK, US, Canada, and Latin America revealed that companies who are in the top quartile of racial diversity are 35 % more likely to outperform their counterparts in lower quartile. 

Some states in the US have either passed laws or are considering laws mandating board diversity or disclosure of board diversity. For example in California, since 2019, boardroom gender diversity laws require companies to ensure a minimum number of female directors. A new law for companies headquartered in the State of California requires that at least one member on the board should be from any underrepresented groups by the end of 2021. 

There are objections and concerns to such laws as well. It is said that change will come voluntarily and a one size fits all legislation will not serve any real purpose. People of colour don’t want to be appointed for the colour of their skin but in genuine recognition of their qualifications. However, it is worth mentioning that for a change to happen, mandatory requirements are helpful and seem inevitable in speeding up the change which has been long overdue. We have seen that over the last 10 years, board diversity is not improving considerably as one would wish.   

Without mandatory disclosure requirements about the board’s diversity composition, it’s not easy to obtain data. The mandatory disclosure of board composition by companies will help the push for diversity. NASDAQ (global virtual Marketplace) has proposed a new rule requiring companies to disclose their board diversity and to have at least one member from an underrepresented minority, or provide an explanation. If approved by the US Securities and Exchange Commission, all companies listed on NASDAQ’s US exchange will be required to make this public disclosure and comply. 

Goldman Sachs in 2020 announced that they will underwrite Initial Public Offering (IPOs) of private firms in the US and UK, only if they have a diverse board, and this requirement is increasing to two diverse members from July 2021 one of which must be a woman. There is no specific number requirement for racial diversity.

The Black boardroom initiative is an initiative by a law firm that is working to ensure the presence of black board members on S & P 500 firms, at least one eighth of the total by 2028.  Deloitte, Amazon, Microsoft, and Zillow are supporting this initiative which has started their work in Washington State. 

Investment management corporations like BlackRock Inc. are urging companies to improve on diversity. Another such firm, State Street Global Advisors, is starting to vote against nomination committee chairs where S & P 500 company’s boards lack diversity disclosure. However, in most cases a minimum number of minority directors have not been prescribed. Another report of all the companies, 178 had no black directors as of their 2020 annual meetings, BlackRock had voted for 163 and Vanguard supported 166 through their vote. 56% of all S & P 500 companies by November 2020 had all white boards and major asset managers like Black Rock voted to approve boards of 52 of these companies. Vanguard approved 51. 

These alarming figures show that a lot of work still needs to be done as there still continues to be a lack of racial diversity across boards. It is important to promote the essence of diversity and instead of having the same minority board members on multiple boards, the pool of diverse board members should be expanded. Improving the board’s racial diversity will require consistent and sincere commitment from the top. 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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1 Comment

  1. Sultana Bhatti

    10 July 2021 at 1:50 pm

    Positive work quotas have got to be the way forward to trigger change. If only 17% of directors support mandatory board diversity, then that’s a real problem

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The United Kingdom faces food and labor shortages due to Covid-19

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Around 50,000 new cases are discovered every day in the UK, and a new NHS Test and Trace programme sends out “pings” to those who have been in close contact with an infected individual, prompting the situation to be labelled a “pingdemic.” Around 520,000 people have been notified since 1st July. With new Coronavirus cases approaching 50,000 per day — the highest rate of infection since January — and hundreds of thousands more people being told to isolate by the app, businesses are urging the government to loosen restrictions for fully vaccinated people much sooner than next month.

The app is designed to notify people who have had close contact with infected people and advise them to self-quarantine for 10 days. The government claims it is not compulsory, but it is urging people to comply.

This is directly impacting the food and gas industries. As numbers of individuals increase, a shortage of staff in the food and retail industries is dragging on the economy. Major supermarket chains and other industries are also facing an employment shortage, forcing some to close temporarily.

According to official data released on Thursday, nearly 620,000 people in England and Wales were advised to isolate in the week leading up to 14th July, with the vast majority living in England. This came after just one day after a meat industry body warned that Britain’s food supply chains are “right on the edge of failing”.

BP, a British oil and gas company, declared that it is experiencing fuel shortages and will be temporarily closing a number of sites. The company attributed the fault to the truck drivers shortages caused by workers staying at home due to Covid-19.

The oil industry said that due to a lack of unleaded gasoline and diesel, a “handful” of its UK facilities had to close temporarily. BP stated that the closure of distribution is terminal, due to staff being told to isolate last week. They said: “Our supply chain has been impacted by the industry-wide driver shortages across the UK, and was exacerbated by the temporary closure of our Hemel Hempstead fuel distribution terminal last week because of necessary Covid-19 isolations amongst staff. The terminal is now operating as normal once again.”

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Malaysia plunges into deeper crisis as residents hoist white flag for help

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When the first wave of Covid-19 hit the region, the Malaysian government’s efforts to contain the spread of the virus was lauded on a global scale. But with the advent of the third wave, things began to look bleak, especially for the economically vulnerable population of the country. 

As the entire nation went into the third movement control order (MCO) which later transitioned into a full lockdown in June, several thousand small businesses faced the threat of total shut down. The situation, exacerbated by vague communication from leaders and uncertainty on the vaccine rollout, led to a large group of Malaysians being unofficially declared as ‘Malaysia’s new poor’

Whilst rates of unemployment rose, people found themselves struggling for basic necessities. Most families had exhausted their savings in the first and second MCOs, and were completely unprepared for what was to come. In a state of helplessness, many were forced to put up a white flag outside their homes, signifying a cry for help. 

https://www.thestar.com.my/news/nation/2021/07/01/businesses-pledge-support-for-white-flag-campaign 

While help did come, it came from unexpected sources. Locals took it upon themselves to help the ones in need by opening several foodbanks, delivering groceries, purchasing from small, home-based businesses to keep them running. A host of companies, NGOs and welfare organisations soon joined them to mitigate scarcity. The white flag campaign – otherwise known as #BenderaPutih on social media – gained recognition quickly. 

People’s aggravation and frustration has been inflamed by the silence of the government. Although the infection rates are not as high as neighbouring country Indonesia, the repercussions of the slow national vaccination program are far-reaching; the effects mirrored by the constantly rising cases despite stringent control measures.  Malaysia has procured large doses of the Oxford-AstraZeneca and Pfizer vaccines, and is beginning to get its hands on more Sinovac doses as well. But only about 12.4% of the population has been fully vaccinated, as of 16th July 2021.  In this absurd state of affairs, citizens are rightly demanding accountability. 

If the circumstances weren’t dire enough, the political blame game being played by the ruling coalition, Perikatan Nasional (PN) and opposition parties has only fuelled the anger further. Leaders of PN have called the white flag movement  “political propaganda” and have asked Malaysians “not to admit defeat”.  What they fail to realise is that this crisis has already spread far beyond the scope of public understanding and patience. 

The Prime Minister Tan Sri Dato’ Muhyiddin Yassin announced on 27th June – which was supposed to be the end of the full lockdown – that it will be extended for an unspecified amount of time until daily cases fall below 4,000. In addition, he declared provision of funds to help relief measures in low-income households. However, the statement does not dispel the despondency of the people, as the first tranches of monetary aid will not be disbursed until August. 

In an ironic twist, this June the World Bank released its report on the Malaysian economic monitor, declaring that the economy was expected to rise by 4.5% this year. A lot of it attributed to increasing exports which have expanded by 18.2%. This begs the question  –  why was one sector of the economy impacted in such a destructive way while the other continued to thrive during the same period of the pandemic? This disparity sparks controversial opinions about the government’s inability to protect the internal economy. The current condition does not only underscore the existing gaps, but further worsens it for the sector that was already at risk of collapsing before Covid, leaving families distressed, starved and foraging for answers. 

As Muslims around the world welcome Eid-ul-Adha, for Malaysians, desperation is the predominant flavour this year in this festive celebration. The government’s Covid exit plan that was built on predictions of lowering cases below a significant level by the end of the year looks, at best, improbable if not impossible. The vaccination program is picking up pace, and the ministry of health is doubling up on attempts to restore public faith. How that affects the economic developments in the coming months remains to be seen.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Spy software “Pegasus” accused of targeting world leaders

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Pegasus is software that was developed by the Israeli cyberarms firm, to act as spyware. It was developed by the NSO Group and can be installed on mobile phones, of both iOS and Android. Recently it has been accused of spying on journalists, activists, and even world leaders. Knowing how advanced today’s technology is, it is not that far-fetched of an accusation.

The NSO Group behind this spyware has, however, denied the accusations and claim that they only target extreme terrorists and serious criminals. Spying through a person’s phone is a very easy thing nowadays, and almost every government has the ability to do so. Moreover, Israel has always been a country with a lot of cyber-power and strong surveillance capabilities. This, of course, doesn’t immediately mean that they are spying on everyone, although there has been proof of Pegasus targeting 15 world leaders from around the world. Some of the known targets of this spyware are the French President Emmanuel Macron, King Mohammed VI of Morocco, Imran Khan of Pakistan, Saad Eddine El Othmani of Morocco, and Mustafa Madbouly of Egypt. The world leaders have denied access to their mobile phones for forensic testing to be sure of this breach, but there have been signs of a breach or attempted infection on up to 37 mobile phones.

Secretary General of Amnesty International, Agnes Callamard, stated that “The unprecedented revelation should send a chill down the spine of world leaders”. There could be many lawsuits and potential charges for the NSO Group by many powerful people – such as Facebook for targeting the WhatsApp application if these claims are proved right. The clients with the largest share of information from the NSO Group list includes Mexico and the Middle East. The people that the NSO Group hacked were not all politicians – as even the members of the royal family, human rights activists, and business executives were included. The NSO Group has already been under scrutiny once in 2016, for their incredible spyware technology and, since then, many people have accused Pegasus of targeting mainly journalists and activists from around the world. Although, only recently were these accusations against Pegasus taken seriously.

If the accusations are true, then this is a serious breach of privacy. Not only can anyone be spied upon very easily as we humans are now dependant on mobile phones with all our personal information but this also means that anyone can be a spy with little to no effort. 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Lebanon close to trying political figures for Beirut explosion

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In August 2020, an explosion in Beirut killed over 200 individuals and injured over 5,000 more. Hundreds of tonnes of ammonium nitrate explosives were stored in a hazardous manner, causing the explosion. At the time, no one had officially claimed responsibility for the blast or explained how a stockpile of explosives had been left unattended in the Beirut harbour for six years.

Prime Minister Hassan Diab pledged a thorough inquiry, but the case had fallen to a 60-year-old judge, with a low public reputation, Fadi Sawan. As the investigation progressed, Judge Sawan was forced to confront a number of prominent figures, confirming that a handful of officials had been notified about the ammonium nitrate but had failed to have it removed or protected.

The political establishment was outraged by Judge Sawan’s verdict by charging four powerful politicians with criminal neglect causing death. The list of those being tried is as follows: caretaker Prime Minister Hassan Diab, former Finance Minister Ali Hasan Khalil, former Public Works Ministers Ghazi Zeiter and Youssef Finianos, and former Interior Minister Nouhad Machnouk.

After a plea from two of the former ministers he charged, Ali Hassan Khalil and Ghazi Zeaiter, a Lebanese court decided to remove Judge Fadi Sawan from the case as he was getting closer to obtaining justice. This shows that, although being on the correct track, Sawan’s mission to obtain justice was cut short by the higher power.

After Sawan being replaced by Judge Tarek Bitar in this investigation, Bitar requested for the lifting of immunity for numerous political figures and former and current security personnel so that he can prosecute them for criminal negligence and homicide with proven intent in connection with the blast.

A judicial source told Al Jazeera that parliament will most likely vote to transfer the case to the Supreme Council but said that legislators could impede the next step, which would require two-thirds of Parliament to vote for the Supreme Council to summon them.

“It’s clear that this is an attempt to obliterate the investigation,” the source said.

Families of the victims have expressed their indignation at the fact that the case’s result is now determined by the Supreme Council’s vote. “We totally reject and condemn this cover-up of the crime of the century,” Mahdi Zahreldine, 21, whose brother Imad was killed in the blast, told Al Jazeera.

However, as a source said, “Judge Tarek Bitar will not stay silent about this.” There is still hope that justice will be served.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Spyware used to monitor thousands of phones, including Khashoggi’s wife

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An investigation into a major data breach has led to a discovery of authoritarian governments targeting high profile individuals such as human rights activists, politicians, journalists and the wife of the murdered Saudi journalist Jamal Khashoggi. It is done using a hacking software which has been created and sold by none other than the NSO spy group of the Israeli government. 

Pegasus is known to be the most dangerous military grade spyware ever developed. It has been licenced to several governments across the globe to track terrorists and criminals. Further, it was namely successful in hacking 37 smartphones from a list of 50,000 numbers, amongst which Hanan Elatr, the wife of Jamal Khashoggi was included. 

Throughout the time period in which Elatr and Khashoggi were speaking and meeting up at various locations, it is determined that Pegasus was keeping track of all their movements. In an interview with the Washington Post, Elatr mentioned regarding Pegasus that “It makes me believe they are aware of everything that happened to Jamal through me.”

The Washington Post confirms that over 1,000 people on the list were identified “spanning more than 50 countries through research and interviews on four continents: several Arab royal family members, at least 65 business executives, 85 human rights activists, 189 journalists, and more than 600 politicians and government officials — including cabinet ministers, diplomats, and military and security officers. The numbers of several heads of state and prime ministers also appeared on the list.”

There is no way of being able to identify who created this list, who added these numbers to the list and why. However, this Pegasus can be installed into Android and iOS remotely. ”Pegasus infections can be achieved through so-called “zero-click” attacks, which do not require any interaction from the phone’s owner in order to succeed.” This malware can convert your phone into a real time surveillance device which can retrieve copies of all your communication (emails, text messages, etc.), it can retrieve your images and record your calls. This software is able to turn your mobile device’ camera on and record you discreetly and/or activate the microphone and listen in on your conversations. It can also pick up on all activities that you do in a day, your current location and past locations. It is also able to pick up on any data on your device including contact information, credit/debit cards, passwords and other personal information.

The amount of effort, money and intelligent minds that were used to create Pegasus had made the software sophisticated enough that if the phone turns down, there is no trace of Pegasus found. The biggest threat that Pegasus poses to high profile individuals is that is can be used to exploit vulnerabilities, hence even the most cautious individuals cannot prevent Pegasus from taking over their phones. 

Unfortunately, there is really no way to prevent anyone from installing Pegasus into your device because zero-click attacks are not visibly detected and there is no knowledge of data packets.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Largest active US wildfire burns through more than 340,000 acres of land

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83 Wildfires currently burn in the US. Among them, the Oregon Bootleg fire. It is currently the largest wildfire in the US, having burned through an area greater than the city of Los Angeles. 

The Bootleg fire, has only been 30% contained and has destroyed more than 160 homes and caused at least 2,000 people to evacuate. 

A few weeks back, I saw one of these wildfires up close in Arizona, US. It was a sight that is hard to describe. Thick smoke engulfed the sky, even at night you could see a black cloud in the sky — the raging fires, like lava. The fumes are powerful, making it hard to breathe.  

These wildfires are becoming more common as the country continues to battles hot and dry weather intensified by climate change. 

“A skyline enshrouded – complete with a sickening acrid smell – from fires induced by our abuse of the planet,” wrote Keith Olbermann in a tweet. “Like the climate disaster it portends, it’s here now.”

Statistics from The National Centers for Environmental Information show that at least 792,074 acres have been burnt in the US by these wildfires this year. 

Western Canada has also been dealing with its own set of fires, leading the officials there to declare a state of emergency. The Biritish Columbia Government said that the move was a “response to the increasingly severe wildfire situation in BC. It’s all-hands-on-deck to support communities, and we’ll continue using all available resources to protect people.” 

The air quality continues to suffer, even thousands of miles away from the actual fire. In New York City, the air quality soared to 170, a level that is considered to be dangerous for anyone, even those that are considered otherwise healthy. 

Areas of Boston and Hartford, Connecticut had levels in the 150 range and officials in those areas recommended that people wear face masks to protect themselves from the pollution. 

The affects of wildfire pollution are vast. The intensity and heat of the fires are also being known to cause its own severe weather patterns, including lightning. 

“The bootleg fire is now producing lightning with its explosive procumulus cloud,” the National Weather Service Boise said. “As the fire creates its own weather, the volatile nature makes it extremely dangerous for firefighters.” 

Sources: 

Reuters 

CNN

The Guardian

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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