Benevolent...Capitalism?

[from an email from my boss at work]

Carrying the Flag: Big Business Vs. Anti-Gay Groups (Part I)
By T.J. DeGroat

This article originally appeared in the June 2006 issue of DiversityInc
magazine

In 1968, the Rev. Martin Luther King Jr.'s assassination provoked race
riots in dozens of U.S. cities. That same year, AT&T launched its first
supplier-diversity effort, spending $175,000 with nine minority-owned
businesses.

In 1988, the National Organization on Disability started a nationwide
campaign to remedy a monumental failure in the voting process: the
abundance of inaccessible polling places and lack of education among poll
workers. That same year, Microsoft began a grassroots effort to create more
accessible technology, building the foundation for a team that now pushes
the company's product groups to consider the needs of people with disabilities.

In 2004, voters in 11 states demanded that same-sex marriage be outlawed.
By the end of that year, 82 percent of the Fortune 500 explicitly
prohibited discrimination based on sexual orientation and 46 percent
offered their employees domestic-partner benefits.

We've seen it time and time again: When the U.S. government and many
Americans aren't prepared to protect all citizens equally, the country's
most powerful companies are the first to take an inclusive stand. And they
usually are led by companies found on The DiversityInc Top 50 Companies for
Diversity list.

This clearly has been the case in recent years when it has come to gay,
lesbian, bisexual and transgender (GLBT) employees. Thirty-three states
don't outlaw discrimination based on sexual orientation, whereas 100
percent of The 2006 DiversityInc Top 50 Companies do, as well as 85 percent
of Fortune 500 companies. Every Top 50 company offers domestic-partner
benefits, compared with 49 percent of the Fortune 500.

Several large corporations, guided by Top 50 companies, are leading the
way, says Mark Tristan Ng, GLBT segment manager at San Francisco–based
Wells Fargo, No. 17 on The 2006 DiversityInc Top 50 Companies for Diversity
list. This occurs "not only because they agree with equality but the
results are consistent with their goals as a company in terms of serving as
many and as diverse a client base as possible," he says.

"It's hard to argue why anyone would go against a market of 15
million­minimum­with $600 billion to $800 billion in buying power and more
disposable income than the average household," he says. "Sometimes people
think the notion of corporate America carrying the flag of equality is
strange, but look at this market and that is exactly what's happening."

But despite this forward march toward equality, socially conservative
groups continue to press large companies known for being inclusive of GLBT
workers to make them second-class employees. This is the new civil-rights
issue facing the United States. And the battlegrounds are annual meetings,
where shareholders push their agendas, and the Internet, which both sides
use to launch boycotts.

Shareholders' Resolve

Shareholder resolutions are being used as a last-resort weapon aimed at
pushing companies toward and pulling them away from inclusive policies.
Trillium Asset Management, for example, has pressed numerous companies to
adopt equitable policies for GLBT employees, including Wal-Mart (one of
DiversityInc's 25 Noteworthy Companies for 2006), which changed its policy
in 2003.

During the past four years, the New York City Pension Funds, which have
more than $99 billion in assets, and New York City Comptroller William
Thompson Jr. have pressured 28 companies to change their policies to bar
discrimination based on sexual orientation, and an additional six to add
gender identity during the past two years.

Thompson "recognizes that a number of companies are leaders in corporate
America, but he believes they've got a responsibility, not just to
shareholders but to workers and consumers, to adopt practices that treat
all human beings with respect and dignity," says Jeff Simmons, a
spokesperson for the comptroller.

Shareholders can make some noise when they follow inclusive proposals, but
there's added incentive for a company to pay attention when someone as
influential as Thompson steps in. It's a position he and his predecessors,
going back to the early 1990s, never have taken lightly, Simmons says.

"The comptroller believes this is an important human- and labor-rights
issue," he says. "But it's also important for investors … Companies that
discriminate arbitrarily limit their talent pool and cut themselves off
from the services of talented employees. Not hiring and promoting the most
qualified applicants can limit a company, hurt profits and hurt shareholders."

The Top 50 Response

Shareholder resolutions also can aim to strip progressive companies of
inclusive policies. JPMorgan Chase, No. 11 on The 2006 DiversityInc Top 50
Companies for Diversity list, last month was facing a vote on whether to
exclude any reference to sexual interests, activities or orientation in its
equal-employment policy. The resolution, submitted by a New York City
couple with 189 shares, states that "the sexual interests, inclinations and
activities of all employees" are a private matter.

Reflecting the values of the DiversityInc Top 10 Companies for GLBT
Employees list, JPMorgan Chase, No. 2 on that list, recommended that
shareholders vote against the proposal because it is contrary to the
company's core values. "Diversity enhances a company's ability to attract
and retain the best talent, to identify opportunities that improve the
quality of products and services, and to create an organization that
clients and employees are proud to be affiliated with," the proxy statement
reads.

An Illinois doctor who owns 674 shares of Ford Motor Co.'s common stock
introduced a similar resolution at the automaker's May 11 annual meeting.
Shareholders overwhelmingly opposed the proposal, with 95 percent voting
against it. Ford, No. 37 on The 2006 DiversityInc Top 50 Companies for
Diversity list, responded in its proxy statement: "Ford, and numerous other
leading companies, believe that a diverse workforce, free of
discrimination, is the most advantageous environment to attract and retain
talented employees and to allow them to excel in their jobs."

Donald E. Wildmon, founder and chairman of the American Family Association
(AFA), among the most visible and active of the country's socially
conservative groups, has said that Ford could have avoided the shareholder
resolution if it had stayed out of the culture war.

This isn't the first time the AFA has attacked Ford. The automaker is
facing a boycott led by the AFA for its decision to continue advertising in
GLBT publications and supporting GLBT organizations.

Best Practices

Even though groups such as the AFA have shown their willingness to attack,
Top 50 companies continue believing that GLBTs are not just worthy of basic
equality in the workplace; they are vital to the bottom line.

"It is integrated into our overall diversity strategy," says Ernest Hicks,
manager of corporate diversity at Xerox, explaining the company's
reclaiming of the top spot on this year's Top 10 Companies for GLBT
Employees list, a position it also reached in 2004. "Ethnicity, gender,
sexual orientation­people begin to look at those as separate aspects when,
in reality, when you're looking to create an environment of inclusiveness,
the GLBT community is part of that."

Ray Flautt, JPMorgan Chase's vice president and diversity manager, agrees.
"When we say we want to have the most diverse team we can, that includes
having LGBT people," he says. "The more diverse the team, the better the
team performs."

In January, the company implemented a major change in its effort to
maintain a supportive workplace for GLBT employees. The company created
guidelines for managing gender transitions, which now is considered another
major life event an employee might go through.

Xerox, which advertises in gay publications and sponsors gay-themed events,
hires whomever is best for a job, no matter what that person's race, gender
or sexual orientations, with the knowledge that the person will succeed in
the culture Xerox has created.

Hicks says he has had conversations with new hires who have told him that
research into the company's inclusiveness prompted them to take their jobs.
"If we had not been able to create that image that [allowed them to feel]
comfortable coming here and applying, it could have been our loss," Hicks
says. "That person could have been responsible for the very patent we lost
that created a billion-dollar loss."

Helping Xerox create a GLBT-friendly workplace is Galaxe, an
employee-caucus group serving the needs of GLBT employees. "They work with
us and keep us aware of things that would further demonstrate our
understanding of their needs as employees," Hicks says.

About five years ago, members of Galaxe approached the diversity office and
requested that the company consider cementing its commitment to the GLBT
community by adding gender identity to its nondiscrimination policy. Galaxe
members brought up the subject and explained why it was important, helping
the diversity office successfully approach senior leadership.

These moves do prompt criticism from some, Hicks admits. "In any operation
of any company … everybody's not going to be happy," he says. "Have we had
individuals with differences of opinion? Absolutely, and we value that too.
That is another aspect of diversity. I would almost be suspect if there was
100 percent agreement. But I think the key thing here is that we don't try
to change other individuals' values or beliefs. What we say is based on
company values­as long as you work and manage people in this company, these
are behaviors we expect of you."

Wells Fargo shares Xerox's common sense. The company has supported the GLBT
community through philanthropy since the 1980s, "when it was not so en
vogue, not so acceptable," says Ng.

That longstanding commitment was reflected in Wells Fargo's response to a
recent attack by Focus on the Family. In December, the Colorado Springs,
Colo.–based group withdrew its funds from Wells Fargo because of the
company's financial support of the Gay & Lesbian Alliance Against
Defamation. Wells Fargo issued a statement expressing regret over losing
Focus on the Family as a customer (the group did not disclose how much
money it kept with the bank and declined to comment for this story).

"The loss of any accounts affects us, but at the same time, we don't want
to be a pawn in a larger culture war," Ng says. "Getting caught up in that
is not the business we're in. We can't just respond to one side or the
other. Otherwise, we're going to be a hostage, having other people
determine our actions." Instead of being reactionary, Ng says, "we let our
vision and values and culture drive our actions."