"Diversity" Police In The Boardroom: Warren Buffett Instead Takes A More MLK Approach
This "diversity" business, which is a code word for "hire black people and people with vaginas" is insulting to accomplished black people and, um, vagina people who are desirable as employees or as corporate board members because they've made something of themselves.
Mike Gonzales writes in the WSJ that Berkshire Hathaway does not have a "diversity" push in choosing board members:
Berkshire Hathaway, the profitable holding company run by the Obama-supporting investment guru Warren Buffett, has for a few years included an interesting nugget about diversity in its proxy disclosures:"Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude and a deep genuine interest in the Company."
But, in very disturbing news, the government seems to want to do for board rooms what it's done for colleges with that "Dear Colleague" letter.
SEC Chairman Mary Jo White ... suggested the SEC would propose a new rule requiring companies "to include in their proxy statements more meaningful board diversity disclosures on their board members and nominees." She also left the door open to having the rule specifically define what diversity means. These developments should trouble businesses that simply want to hire the best people.
More:
Investors are not clamoring for politically motivated disclosure requirements on the theory that forced diversity improves performance, if they seek the requirements at all. Berkshire--which chooses directors by integrity, business savvy and interest in the company--has enjoyed good governance without diversity initiatives. The company currently tracks the S&P 500 average and outperforms its industry. On revenues of $200 billion, it has become the fourth-largest company on the S&P 500 list, behind Wal-Mart, Exxon Mobil and Apple.But this push isn't about performance. Rather, its proponents want to open a new front in the campaign to have government allocate participation in society for groups it designates as protected classes. Mr. Dhir, Rep. Maloney and the others want these disclosures so activists can use them to intimidate companies.
As the subhead of the piece noted, "Forcing firms to disclose the race and gender of their directors is a step toward de facto quotas."
I'm hoping big businesses will stand up to the government a little better than colleges have.
I like this lady, commenting at the WSJ:
REBECCA GREMORE
Even a competent government has no business dictating management of businesses owned by private investors. That right belongs to the investors. Now, where the government does have managerial oversight, public schools, why not look at gender diversity in the teaching staff and require that at least 50% of the teachers be men and black men at that. In the many failing urban schools, this would finally give the students, who are typically from fatherless homes, a role model of a working male. of course, it would probably create an instant shortage of teachers, but reality has never stopped the government before.
And, of course, if the government really cared about diversity, they'd be all over that NBA, as I noted in a recent blog item:
You want me on your NBA team. You really do. Because diversity is good, right? And it would be a nice change of pace to have not only a woman but an Ashkenazi Jew who ducks any time a ball bigger than a tennis ball comes at her. (Admittedly, I don't flinch at beachballs.)
From the article: "SEC Chairman Mary Jo White ... suggested the SEC would propose a new rule requiring companies..."
Where does the government get off requiring companies to do anything? I think the quota percentages required by companies are quite enough.
Patrick at August 22, 2016 4:54 AM
Mission creep + Sarbanes-Oxley, Patrick. Also, interstate commerce clause. If they can make us buy a product because of that, they can pretty much do whatever they want.
As far as Buffet goes, I hope that the powers that be ram that diversity sammich right down his pie hole.
I R A Darth Aggie at August 22, 2016 7:18 AM
I R A Darth: As far as Buffet goes, I hope that the powers that be ram that diversity sammich right down his pie hole.
So because of your hatred of Warren Buffet, you're willing to foist even more affirmative action on the U.S. to spite him.
Wow. Give 3.19 hundred million people the bird, but at least you've manage to spite Warren Buffet.
Patrick at August 22, 2016 7:47 AM
No Patrick, because Buffett is pushing and encouraging the government to shove this crap down everyone else's pie hole while he expects to get an administrative exception because he donates well to the democrat party and is friends with it's leaders.
Remember back when Buffett was out stumping for higher taxes? One of his common lines was how he payed less in taxes than his secretary. The news media never highlighted that the taxes Buffett was stumping to raise weren't his, but his secretary's. Same thing with his opposition to the Keystone XL pipeline. He sold it as environmentalism. In reality he wanted to keep moving oil on trains he owned at much greater environmental damage. For a third item look up Buffett and the estate tax. Buffett has no intention of paying the estate tax. All of his wealth will go into a 'charitable' trust like the Clinton Foundation.
Look very closely when Buffet gets political (I know he isn't with this story). Every time I've looked into some politics Buffet is selling he is trying to get the government to eliminate his competition.
Ben at August 22, 2016 8:13 AM
What advantage is there to investors in forcing BODs of publicly-traded companies to bring in directors to fulfill a diversity requirement? For that matter, what advantage to investors does having any type of diversity requirement for regular staffing bring? What profit or cost savings has any diversity requirement-or diversity department-ever brought to a company?
*
My observations and conclusions about Warren Buffet's activities are the same as Ben's, but that's another topic. If the dude's promoting a tax scheme or regulation or social program, it serves him in some way, or it somehow doesn't apply to him or his holdings. Always.
Ahw at August 22, 2016 9:58 AM
So because of your hatred of Warren Buffet, you're willing to foist even more affirmative action on the U.S. to spite him.
No, you misunderstand.
Warren Buffet is a willing accomplice of the current regulatory and oversight environment. Let him be hoist on his own petard.
Give 3.19 hundred million people the bird
A significant portion of whom are also willing accomplices. A quick look at wikipedia indicated that something along the lines 66 million people cast their votes for Obamacare.
I R A Darth Aggie at August 22, 2016 11:29 AM
If the dude's promoting a tax scheme or regulation or social program, it serves him in some way, or it somehow doesn't apply to him or his holdings. Always.
Back when he was advising Obama, I'm sure Berkshire Hathaway's position was such that if Obama acted upon them, they'd make money.
The man's a rent seeking crony capitalist, who seeks to place sizable roadblocks in the ways of any potential rivals. Same reason why many of the big corps are all in on Obamacare: it places a noose around the neck small businesses, insuring that they'll never reach a size were they might compete against a Walmart or Amazon.
I R A Darth Aggie at August 22, 2016 11:33 AM
"What advantage is there to investors in forcing BODs of publicly-traded companies to bring in directors to fulfill a diversity requirement?"
Of course there is none. The quote from Gremore hits on the real motivation: It would create an instant shortage of qualified directors -- which the Left will then exploit, through lawfare and outright threat, to place Party activists on boards. The better to make sure everyone stays on the reservation, as well as suck out cash streams to flow to the Party.
Cousin Dave at August 22, 2016 1:00 PM
It's all well and good for companies to say, "We don't care about your race or gender or familial status - we're just looking for the most qualified, best person!" However, it is a well-known truth of business that most jobs, especially at a senior leadership level, are not fulfilled through an open cattle call where they carefully review 1000s of applications and impartially select the objectively best candidate. All kinds of subjective factors go into hiring, starting with the wide end of the funnel - how are you getting applicants? At senior leadership levels, oftentimes, it's old white men talking with their friends at the golf club, so they end up starting from a very stunted pool - they don't bother to cast a wide net. So how can they be so sure that they are getting the truly best candidate for the role, when they are selecting from such a small (possibly nepotistic?) pool of applicants?
And there are further complicating subjective factors. Gender and racial bias are very real. One research study (link: https://blogs.scientificamerican.com/unofficial-prognosis/study-shows-gender-bias-in-science-is-real-heres-why-it-matters/ ) created two versions of a resume - every element was identical, except for the name. One version had a male name attached and the other had a female name attached. "Results found that the “female” applicants were rated significantly lower than the “males” in competence, hireability, and whether the scientist would be willing to mentor the student. The scientists also offered lower starting salaries to the “female” applicants: $26,507.94 compared to $30,238.10." So in this case, both applicants were exactly equally qualified, and yet preference was still given to one gender over another. Clearly, it is not so simple as just "choosing the most qualified person, regardless of race or sex."
Now, this brings us to the question about government regulations regarding diversity in leadership. I don't know that I think it's a good thing for the government to impose quotas, but I honestly don't see the harm in requiring them to disclose the diversity statistics of their board. In fact, I think there could only be benefits from this!
First benefit: it will encourage companies to reflect on whether they could be casting a wider net, or if there are other existing company practices that are unintentionally pushing out non-white, non-men at lower levels / preventing them from advancement. Similarly, having public companies report on their revenues and expenses and profits quarterly forces them to make sure that they are, in fact, generating a profit! "What gets measured gets managed" is an essential principle of a successful business, and measuring/managing towards having a greater diversity of views and experiences in business leadership is, I believe, a worthwhile goal.
Second benefit: transparency to consumers/shareholders. Just like food manufacturers are required to put the nutritional information on their packaging so that consumers have the ability to make an informed decision about their purchase, I think many shareholders would be interested in making an informed choice about what kinds of companies they want to back. I'm sure a lot wouldn't care, but why not make the information available for those who care to do the research? I see that there is a concern about a 'slippery slope,' that requiring disclosure will eventually lead to requiring quotas, but I'm not convinced. In my opinion, the benefits, and the expanded choice that would result from the disclosure, outweigh the risks.
Tina at October 16, 2016 4:28 PM
a response to Tina,my eldest child, as to her comment..A well thought out argument.
Love, Mom
Aka Rebecca Gremore
Rebecca Gremore at January 17, 2018 7:34 AM
In response to Tina, my eldest child.
Well, thought out argument, my dear.
Love, Mom
Rebecca Gremore at January 17, 2018 7:37 AM
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