10 Most Diverse Companies In The US

Diversity is a hot topic in the US corporate world, and the 10 most diverse companies in the US are showing the way in terms of how a workplace and its management team can be more inclusive to people of all races and genders.

There are a number of organizations and groups assessing the state of diversity at major companies. One of these organizations is DiversityInc, which is in its 17^th year of conducting surveys across hundreds of companies to evaluate workplace conditions. For the latest survey, conducted in 2016, the organization looked at 1,800 companies across 15 industries, and applied a metrics-driven evaluation to each. The survey correlates each company’s best practices, such as diversity councils, resource groups and mentoring, and senior-executive accountability, with human-capital and supplier-diversity specifics, to study how successful a company’s push for diversity has become.

There are also a number of organizations assessing each company’s social responsibility practices, and you can see the top performers for that field in Insider Monkey’s article of the 10 Most Socially Responsible Companies in the US.

All this attention on workplace diversity goes beyond societal issues, workplace ethics, and the push for equality. According to a number of studies, diversity is also correlated to better bottom-lines and performance for companies. A study conducted by Thomson Reuters across more than 4,000 companies traded globally showed that companies with greater gender diversity on their boards generally have less volatile stock prices and showed similar or better gains in stock price.

Another study, this time by McKinsey, found that for companies in the Americas and the United Kingdom, a more gender-diverse company is 15% more likely to outperform a less gender-diverse company, while a more ethnically-diverse company is 35% more likely to outperform a less ethnically-diverse company. In addition, a 10% increase in racial diversity for management teams of US companies translates to a 0.8% rise in earnings.

These studies present us with compelling evidence as to why we need to strive to improve diversity and equality in the corporate world. Despite certain companies’ best efforts to be more inclusive, women account for an average of just 16% of the members of executive teams in the US, while 97% of US companies fail to reflect the demographic composition of the country’s labor force and population.

Nevertheless, from these studies, we can infer that workplace and management diversity can be seen as a good sign for a company, because it can predict better performance. As to whether those findings on the recent studies hold water for the companies assessed by DiversityInc as the most diverse; well, we’ll look into that in this list of the 10 Most Diverse Companies In The US, continued on the next page.

10. Prudential Financial Inc (NYSE:PRU)

DiversityInc touted Prudential Financial’s formal succession planning in place for underrepresented groups, as well as mandatory diverse slates for executive positions, although the company fell a couple of spots from its number 8 placement in the rankings in 2015. The company’s stock price rose by 26.06% in 2016.

9. Marriott International Inc (NASDAQ:MAR)

Marriott scored high marks due to its widespread promotion of Blacks and Latinos into management positions, as well as supplier diversity when it comes to women-owned subcontractors. Last year, the hotel chain’s stock increased by 20.23%.

8. Johnson & Johnson (NYSE:JNJ)

2016 was a banner year for Johnson & Johnson when it came to promoting women into upper management roles and appointing women in management positions at all levels. The company, which also pushes for higher representation of female undergraduates in science and technology courses, saw its stock rise by 11.08% last year.

7. Mastercard Inc (NYSE:MA)

MasterCard recently committed to supporting the LGBT community, joining 13 other firms in Open for Business, a new coalition aimed at proving the business profitability of LGBT rights. The company showed 4.73% stock growth in 2016.

6. Sodexo SA (EPA:SW)

Sodexo operates metrics-focused, diversity-management initiatives, focusing on key inclusion areas such as culture and origins, and has helped its client companies develop their diversity programs. The company’s stock grew by 21.24% in 2016.

5. PricewaterhouseCoopers

The accounting firm’s chairman, Robert Moritz, has initiated conversations about race and diversity in the workplace and through discussions with other CEOs and corporate leaders. For its fiscal year ended June 30, 2016, the company reported a 7% increase in gross revenue to $35.9 billion.

4. AT&T Inc. (NYSE:T)

In recent years, the telco increased employment for veterans, Blacks, and Hispanics, while mentoring about 160,000 at-risk high school students. For the year 2016, the company registered stock growth of 22.71%.

3. Ernst & Young

The number three on our list of most diverse companies in the US is EY that launched programs that connect ethnically diverse staff with minority executives, as well as mentorship programs that sponsor women and minorities. The accounting firm reported global revenue of $29.6 billion for its fiscal year ended June 30, 2016, representing 9% growth.

2. Novartis AG (ADR) (NYSE:NVS)

The drug maker has been committed to promoting women into management positions, according to DiversityInc. In 2016, the company’s stock sank by 15.76%, making it the only underperformer on this list of the 10 Most Diverse Companies In The US. However, that underperformance can be attributed to patent losses and the general concerns regarding drug pricing during the US election.

1. Kaiser Permanente

The healthcare consortium has a CEO that signs off on executive compensation tied to diversity achievements and a successful program for employing minorities such as Asians in senior management positions. During the first nine months of 2016, the consortium reported $4.83 billion in revenue, up by 5.92% from the prior-year period, further proof that inclusive companies such as the 10 Most Diverse Companies In The US generally outperform their less diverse peers.

Disclosure: None