The companies in the study were ranked on 10 different diversity criteria, which included internal and external diversity initiatives, board diversity, diversity of their highest-paid executives, Equal Employment Opportunity (EEO) policies, and director selection criteria, as well as the company’s overall commitment to diversity.
In its study, Calvert defined diversity as: “Nondiscrimination and equal opportunity concerning recruitment, hiring, pay, promotion, training, and tenure without regard to race, gender, age, religion, national origin, ethnicity, sexual orientation, gender identity and expression, HIV/AIDS status, medical status, and mental and physical ability.”
Using its definition and looking at public data, as well as reaching out to companies to clarify their diversity data, Calvert found the following companies were the least diverse out of all the companies in the S&P 100:
1. National-Oilwell Varco, Inc. (NYSE:NOV) — Diversity score of 15: This oil and gas component and equipment company received the third-lowest rating in the report, partly because it was one of only two companies in the study that doesn’t have any diversity on its board of directors. In addition, National-Oilwell Varco, Inc. (NYSE:NOV) has no women or minorities in the C-suite, as a Forbes overview on the report noted earlier this year. . When it comes to diversity, oil and gas companies typically tend to fall behind other industries.
According to Diversity Inc., which compiles a list of the top 50 most diverse companies each year, no oil company has made it on its list since 2004. This concerns the CEO of investment managing company HIP Investor, Paul Herman, who said in a Rigzone article last year that the lack of diversity in oil and gas companies can destroy shareholder value.
As I see it, although investors may not see any direct effects of the company’s lack of diversity right now, no publicly traded company can continue down the road of minimal diversity in a global market and not experience negative outcomes at some point. It’s in the best interest of National-Oilwell Varco, Inc. (NYSE:NOV), and its investors, to address its diversity issues now so it can make changes to its policies in the near future.
2. Simon Property Group, Inc (NYSE:SPG) — Diversity score of 10: Simon Property Group, Inc (NYSE:SPG) is one of the largest real estate companies in the world and was mentioned in the report as an example of a company that treats diversity as a “compliance matter.” The study said that Simon Property Group, Inc (NYSE:SPG)’s diversity policy is treated as a human resources matter and the company isn’t as public with its diversity programs or data as others are. Calvert said that companies in this grouping typically don’t have strong diversity leadership.
