by Melissa Klein
Leaders of two minority professional associations have teamed up in an effort to diversify corporate boards.
The Association of Latino Professionals in Finance & Accounting and the National Association of Black Accountants are collaborating on a campaign that they hope will increase minority board representation.
“The picture is dismal when you look at the number of minorities serving on corporate boards. It definitely doesn’t mirror the population or the community these companies are in,” said Manny Espinoza, chief executive officer of Los Angeles-based ALPFA, which aims to build Hispanic leadership in the accounting and finance arena.
Among Fortune 1000 companies, 492 minority individuals hold 798 of 11,500 board seats, or roughly 6.9 percent, according to a report by Diversity Best Practices, a Washington-based advocacy group.
“Part of becoming successful is being involved in critical leadership positions, which means being on boards,” Espinoza said. “How will people become leaders if they’re not participating? Our members have value to add, but they’re not being asked to serve on boards. We need to get people aware that we have outstanding talent here.”
The two groups have formed a strategic alliance to identify and build a database of qualified minority candidates for corporate boards of directors.
“Numbers do count,” said Espinoza. ALPFA has about 4,000 members. “If you don’t have critical mass, you have to join with other people who have the same mission. We believe that, as an alliance, we’ll have more impact.”
Espinoza said that the goal of the alliance is twofold: educating companies about the importance of having diverse boards, and providing them with qualified candidates.
“Just like it makes good business sense to have a diverse work force, it makes good business sense to have a diverse board,” he said.
“If companies really want a diverse view, they have to have a diverse group of individuals on their board,” said Darryl Matthews, executive director of the Greenbelt, Md.-based NABA. The organization, which does not disclose membership numbers, said that it “represents the interests of over 100,000 African-Americans in accounting and auditing posts.”
“Companies can’t say to the community that they’re in that they are good enough to make them profits and to buy their products, but not good enough to sit on their boards. Reciprocity is a key issue here.”
“Since the meltdown in the financial community [the recent spate of accounting scandals], we’ve been contacted by a number of search firms looking for candidates,” Matthews said. “Our goal is to identify credible, qualified candidates to serve on boards. A lot of our more-seasoned members who are partners at the big firms and who are at the end of their careers say that they are interested in serving on corporate boards when they retire.”
For Erby Foster, a member and former national president of NABA, the lack of minority representation on boards was highlighted in a May 2001 CFO Magazine cover story on corporate diversity.
The article reported that in the Year 2000, only 14 of the finance chiefs in the Fortune 500, 10 of the treasurers, and five of the controllers were people of color, Foster, then NABA president, recalled.
“It got Manny and I thinking about what our organizations can do to highlight these issues and concerns and to help provide a solution,” Foster said. “We decided we could provide a list of partners who would be attractive candidates for these positions. We want to provide the vehicle for people who are serious about it to be successful.”
“There are two schools of thought,” said Foster. “There’s a ‘scarcity mentality,’ that there are few opportunities available to all minorities in corporate America. For instance, a company will have one minority vice president, and everyone can fight over which one of us will get that spot. But I believe in what I call the ‘abundance mentality.’ I’m looking to grow the pie rather than fighting over one slice.”
“With the financial scandals of the last few years, we’re seeing some turnover on boards. Some of it is by design - they need more outside, independent people. We see it as a great opportunity for a pool of new talent to serve on these boards,” said Foster.
The process for identifying candidates and building the database is still in the planning stages. “The database has to be strategic to make sure that we’ve gotten qualified candidates,” said Espinoza. “We will do some kind of filtering as to members’ past board experience. The worst thing we could do is to send candidates who aren’t qualified.”
The groups are collaborating with the American Institute of CPAs on the effort. They also plan to reach out to other groups to join their effort, including the Executive Leadership Council, the National Black MBA Association and the National Society of Hispanic MBAs.
“We believe that the more partners we have, the better,” said Espinoza. “We’re hoping we can kick this off by the end of this year or the beginning of next year.”
