Resolved clauseShareholders request that Genuine Parts Company (Genuine Parts or the Company) report on the effectiveness of the Company's diversity, equity, and inclusion efforts. The report should be done at a reasonable expense, exclude proprietary information, and provide transparency on outcomes using quantitative metrics for hiring, retention, and promotion of employees, including data by gender, race, and ethnicity.
Supporting statementRESOLVED : Shareholders request that Genuine Parts Company (Genuine Parts or the Company) report on the effectiveness of the Company's diversity, equity, and inclusion efforts. The report should be done at a reasonable expense, exclude proprietary information, and provide transparency on outcomes using quantitative metrics for hiring, retention, and promotion of employees, including data by gender, race, and ethnicity. SUPPORTING STATEMENT: Quantitative data is sought so that investors can assess and compare the effectiveness of companies? efforts to ensure diverse, equitable, and inclusive workplaces. It is advised that this content be provided through existing sustainability reporting. An independent report is not requested. WHEREAS: A recent working paper from the National Bureau of Economic Research entitled ?A Discrimination Report Card? assigned 97 large U.S. employers a grade for the gap between how frequently they contacted candidates with names that suggested they were White and names that suggested they were Black. [1] Genuine Parts appears to be one of the most frequent discriminators of the companies in the study, contacting presumed White candidates 33 percent more often than applicants with names suggesting they were Black, despite both groups having equivalent qualifications. [2] The findings of the working paper are concerning. Racial discrimination is prohibited under the Civil Rights Act of 1964. Furthermore, research indicates that investors benefit from companies with more diverse management. For instance, McKinsey studies have consistently found that companies with greater diversity in corporate leadership are more likely to outperform peers on profitability. [3] Research from Whistle Stop Capital and As You Sow reviewed the manager diversity of over 1,600 companies. Linear regression found statistically significant positive correlations to many key financial performance indicators, including free cash flow, return on equity, return on invested capital, and revenue growth. [4] Unfortunately, studies have also shown that women and people of color face barriers in recruitment, hiring, [5] and promotion. [6] Companies must protect their workplaces against discrimination, and investors must have meaningful data to monitor their effectiveness. As of the date when this resolution was filed, Genuine Parts had yet to release its consolidated EEO-1 form. Doing so is best practice in diversity data reporting. In addition, the Company did not disclose sufficient hiring, promotion, or retention data to allow investors to effectively assess the Company?s efforts to build and maintain diverse teams. More than 80 percent of the S&P 500 and almost half of the Russell 1000 have released, or have committed to release, their consolidated EEO-1 forms. Between 2021 and 2024, there was a 314 percent increase in EEO-1 form disclosure, along with significant increases in the percentage of companies disclosing promotion rates, hiring rates, and retention rates. [7] AutoZone, O'Reilly Automotive, and Ford Motor are just some companies that release more diversity and inclusion data than Genuine Parts. We urge Genuine Parts to join these companies and increase its disclosure. [1] https://www.nber.org/papers/w32313 [2] https://www.nytimes.com/2024/04/08/upshot/employment-discrimination-fake-resumes.html [3] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact [4] https://www.asyousow.org/report-page/2023-capturing-the-diversity-benefit [5] https://www.bloomberg.com/opinion/features/2024-07-29/white-men-the-most-likely-to-get-hired-even-with-dei-finds-research [6] https://mitsloan.mit.edu/ideas-made-to-matter/women-are-less-likely-men-to-be-promoted-heres-one-reason-why [7] https://www.asyousow.org/report-page/workplace-equity