Oct 13, 2021
With the public expecting more from product brands than ever before, consumer goods companies are paying close attention to their diversity and inclusion initiatives. Successful implementation of these initiatives can bring many benefits, including brand loyalty, employee retention and increased profitability.
A lack of clear goals and leadership accountability has hindered the advancement of diversity and inclusion in the consumer products and services industry. According to a 2019 study by Russell Reynolds Associates, only 32% of consumer goods executives said their leaders make a visible commitment to diversity and inclusion, only 32% communicate the importance of diversity and inclusion goals, and less than a quarter see leaders actually setting goals and holding themselves and others accountable.
With these observations, it is not surprising that few consumer goods executives feel their organizations are heavily invested in diversity and inclusion. A total of 40% of executives said they were aware their organization had an official diversity strategy; however, only 24% had a broad understanding of what that strategy actually was. The views were similar for inclusion, with only 23% believing their organization had an official strategy to foster an inclusive culture. A greater commitment from leadership to make lasting cultural change seems to be needed.
Trends since 2015
The Institute of Grocery Distribution Inclusion and Diversity 2020 report shows that more than 80% of the companies surveyed reported having diversity and inclusion as part of senior leadership conversations, while 50% said they have a strategy in place. The report also showed that 45% of companies had yet to formally establish their diversity and inclusion strategy.
A Canadian study in the same year by Boyden Executive Search found that only 23% of the CEOs in the consumer packaged goods sector were women, with many either founders or family members. Only 7% in the C-suite were Black, Indigenous or people of colour.
Latest diversity numbers
The consumer products and services industry compares favourably to other TSX-listed firms with regard to women director diversity levels. Data compiled for Osler’s 2021 Diversity Disclosure Practices [PDF] report shows that 25% of directors at consumer products and services companies in 2021 were women (up from 22% in 2020), compared to 22% for TSX-listed companies as a whole. On a per-board basis, the number of women directors was 2.11 for the industry compared to 1.83 for TSX-listed companies.
In terms of women executive officers, the number and percentage fell year over year in the industry. The Osler report shows that 21% of executive officers in the industry were women compared to 22% for TSX-listed companies. On a per-board basis, the industry number was 1.91 compared to the TSX-listed firm average of 3.30.
Breakdown of number and percentages of women directors in 2021
Breakdown of number and percentages of women executive officers in 2021
Best practices and sector leaders
Osler’s 2021 Diversity Disclosure Practices [PDF] report identifies Saputo Inc. as having at least 50% of women in director positions. Roots Corporation was listed as having more than 50% of women executive officers.
At their virtual sales and marketing symposium in June 2021, the Food, Health and Consumer Products of Canada (FHCP), the voice of Canada’s leading food, health and consumer goods manufacturers, held a panel discussion on diversity and inclusion. Participants agreed that, while their organizations may be at different stages on their journey, the diversity and inclusion discussion has been advanced to the highest levels in their organizations and is becoming a strategic priority. There was also consensus that brands need to be more authentic and to tell consumers where they stand in their journey.
In January, Unilever announced a three-part plan to fundamentally change the way it does business, committing to boost wages, increase the diversity of its suppliers, and train more skilled younger workers. By 2025, the company plans to spend more than £2 billion annually with suppliers owned and operated by those from underrepresented groups. By 2030, organizations that directly provide goods and services to Unilever must pay their workers a living wage.
Levi Strauss & Co. is pursuing stronger partnerships with historically Black colleges and universities in the U.S. to build a pipeline of more racially diverse talent. The company has also set the goal of requiring that half of the interviewees for open positions be racially diverse candidates while ensuring that they are interviewed by a panel of racially diverse leaders. For its part, Gap Inc. has publicly committed to narrowing the space between the diversity of its employees and the diversity of the U.S. population by doubling the representation of Black and Latinx employees in its U.S. headquarters by 2025.
At Bayer Canada, diversity and inclusion is an ongoing agenda item at monthly senior management meetings. The company has also made a commitment by 2025 to establish a 50/50 gender balance as an average across all management levels including lower and middle management.
Godrej Consumer Products Ltd. (GCPL), a global conglomerate with more than a billion customers, has the highest number of women board members of any listed company in India. The company has long believed that being diverse, particularly in having its employees reflect the diversity of its business and communities, contributes to greater growth and innovation. GCPL promotes inclusivity through affirmative stances on gender and LGBT+ rights, and by hiring from different backgrounds and skill levels.
At French food services company Sodexo, 55% of all staff are women. That is up from 17% in 2009. And 58% of Board members are women. The company runs 14 gender balance networks worldwide and they state that gender balance is their business and that their mission is to make it everyone else’s business as well.
The Leading Executives Advancing Diversity (LEAD Network) has been formed in Europe with the goal of attracting, retaining and advancing women in the retail and consumer goods industry through education, leadership and business development. The network believes that advancing women to leadership roles is essential for the business world to effectively address its future challenges.
The connection between a company’s diversity and that of its consumers is becoming stronger, and more and more consumer goods businesses are responding in a positive way. In the long run, this can only be good for a company’s recruiting and retention and its customer loyalty.