Charles Schwab: Disclosure on Plans and Policies Aligned with Achieving Racial Equality as Informed by As You Sow Scorecard
WHEREAS: In the wake of the George Floyd murder by police officers on May 25, 2020 a majority of Russell 1000 corporations made public statements expressing their plans to address racial justice, thereby taking the first step to becoming antiracist organizations. Antiracism is the practice of identifying, challenging, and changing the values, structures, and behaviors perpetuating systemic racism. While Charles Schwab released statement, it did not specifically address racial injustices.
Numerous studies cite material corporate benefits associated with adopting corporate policies promoting racial justice:
A McKinsey study shows companies with the strongest racial and ethnic diversity are 35% more likely to outperform their industry medians
Companies with the most ethnically/culturally diverse boards worldwide are 43% more likely to experience higher profits
For every 10% increase in racial and ethnic diversity among senior executives, EBIT rises 0.8%
However, inequities in the workplace continue:
People of Color comprise 33% of entry level positions, but only 13% of the C-suite
Among companies in the Russell 3000, Black individuals accounted for only 4.1% of board members versus 13.4% of the U.S. population
“Failure to adopt inclusion practices translates into a loss of customers and reduces profitability”
Schwab can play a critical role in ending systemic racism by promoting racial justice.
The need for action is underscored by Schwab’s 28% score on a recent Racial Justice Scorecard. This score is significantly below peers Bank of America and U.S Bancorp which scored 54% and 68%. Schwab’s low score is due to a weak initial statement, lack of publicly accessible diversity and inclusion targets and lack of disclosed data concerning hiring, retention, and promotion rates of people of color within the Company. Given heightened awareness around racism, failing to act and disclose policies and quantifiable data raises the material risk of revenue loss and reduced brand value.
BE IT RESOLVED: Shareholders request that Schwab publish a report, at reasonable expense and excluding proprietary information, disclosing the Company's plan, if any, to promote racial justice.
SUPPORTING STATEMENT: Investors seek quantitative, comparable data to understand if and how the Company is promoting a commitment to Racial Justice. Proponents suggest the report include:
Potential policies the company could adopt to promote Racial Justice in its corporate workplaces and operations
Detailed quantitative information on diversity and inclusion, including recruitment, hiring, and retention policies and outcomes
Resolution Details
Company: Charles Schwab
Lead Filers:
As You Sow
Year: 2021
Filing Date:
December 2020
Initiative(s): Racial Justice
Status: Blocked by Company at SEC