To Diversify Corporate America, We Need Standards, Not Statements

“We must do more.”

In the days after George Floyd’s murder, I saw these words in press releases, social media posts, and public statements across corporate America. Businesses pledged to donate, engage in difficult dialogues, and overhaul internal processes. It seemed like we had finally reached a watershed moment—one where companies were finally stepping up and implementing much-needed reforms.

As the CEO of the Minority Corporate Counsel Association (MCCA), an organization committed to diversifying the legal profession, I watched these developments with cautious optimism. Optimism, because it appeared that corporate America finally had committed to changing the ways in which systemic racism pervaded our workplaces. But caution, too, because I’ve seen that talk can be cheap. I tempered my expectations and waited for the data to confirm.

Now, the data is here. And it paints a discouraging picture of progress.

Today, we released the latest edition of MCCA’s annual Fortune 1000 General Counsel Survey—a comprehensive look at diversity among the top in-house legal jobs in the country. The survey shows that racial diversity among Fortune 1000 GCs actually declined over the past year.

Overall, in 2020, there were a total of 115 GCs of color in the Fortune 1000—or 11.5%, out of 999 general counsel in the Fortune 1000 last year, a drop from 117 lawyers of color in 2019. According to MCCA’s law firm diversity survey, attorneys of color make up 33% of summer associates, and almost 27% of first-year lawyers.

And over the past year, while the number of Asian American GCs remained flat and the number of Hispanic/Latinx GCs rose by under 5%, the number of Black GCs declined by about 6%. This was the greatest change of any under-represented group—and it was in the wrong direction.

Beyond being powerful decision makers and members of the executive class, GCs are tasked with protecting a company’s assets—and a company’s greatest asset is its workforce.

Today, as business leaders unpack the ways in which systemic racism harms their employees and detracts from their bottom line—perpetuating cycles of bias and discrimination, hampering recruitment and retention, and preventing their best and brightest from contributing fully—GCs increasingly serve a different function within top organizations. They are not simply back-office analysts marking up contracts in legalese. They are the conscience of their companies, helping colleagues understand the urgent need not just to commit to DEI goals, but to act on them.

That’s why now more than ever, they must reflect the consumers and employees they serve. And it’s why we must understand the factors that led to this decline in diversity.

Why GC Diversity Has Declined

One reason for the decrease in diversity among GCs is that there was simply less turnover, with only 139 open GC roles in 2020, compared to 216 in 2019. That’s understandable, given the anxiety around the global pandemic. But what’s less understandable is what happened when those roles became available: they were filled disproportionately by white men and women, who stepped in to the 139 open roles.

Amid a historic reckoning on race, companies had a chance to live up to their commitment to change by investing internally. They had a chance to do more. And they missed that chance.

The good news is that we are seeing signs of progress in other parts of corporate America, most notably in board diversity. And this progress can serve as a blueprint for corporations and advocates alike.

Boards Are Becoming More Diverse

An analysis by the corporate consultancy ISS Corporate Solutions shows that between July 2020 and May 2021, companies in the Fortune 500 appointed Black board members to 32% of their board openings—a significant step forward from 11% in 2019.

This builds on the steady rise we’ve seen in gender diversity in recent years: a study by Deloitte and the Alliance for Board Diversity shows that women occupied 26.5% of board seats in 2020, up from 15.7% a decade earlier.

It’s important to understand that these diversity gains didn’t just happen on their own. In many cases, they were forced by government and shareholder pressure.

States like California and Illinois have passed laws mandating greater board diversity. Industry giants like Nasdaq and Blackstone have followed suit. And the Securities and Exchange Commission recently indicated that it will soon mandate greater diversity disclosures, including within a company’s senior leadership, partially thanks to pressure from investors.

Companies Should Invest Internally

Corporate America should take note of these signs and begin diversifying their leadership teams now—starting with their GCs. This way, they can get a head start on competing for the best candidates, including the proven leaders who can steer them through times of crisis.

And while donations to external organizations like the NAACP and the Equal Justice Initiative are laudable, companies should also invest internally to improve their existing systems to improve diversity, equity, and inclusion. Without building a workplace that has eliminated the systemic barriers to create an equitable one, leaders can lose their existing GC talent.

This year showed us that progress can revert. But today, companies have an opportunity to show us with actions what they’ve been saying only with words—that they can, will, and must do more.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Jean Lee is president and chief executive officer of the MCCA, the leading national organization focused on improving diversity, equity, and inclusion in the legal industry by providing research and strategic solutions.