Chipotle announced this week that the company will tie its executive compensation to annual targets aimed at improving both its sustainability efforts and the diversity of its staff — that’s across the whole organization, from C-suite to behind the line.
Last year, after George Floyd was killed, lots of companies pledged to provide more opportunities for workers of color and to diversify their boards.
Robert Kelley, a management professor at Carnegie Mellon University, said we’re starting to see action.
“I think we’re moving away from the rhetoric to more specificity,” he said.
Kelley called this next phase “stakeholder capitalism.”
The TL;DR on the Inflation Reduction ActAug 8, 2022
The job market is back at pre-pandemic levelsAug 5, 2022
Is the unemployment system prepared for a recession?Aug 4, 2022
Companies had listening sessions, made hiring strategies and drew up strategic plans.
And when one big company does something, others follow, said Michelle Silverthorn, CEO of Inclusion Nation, a diversity consulting firm.
“They may want to do it, they may be invested in wanting to believe it’s the right thing to do,” she said. “But also, a lot of it is looking at the marketplace in which you compete and saying, ‘This is something we need to do right now.'”
Two other big restaurant chains, McDonald’s and Starbucks, have evolving diversity initiatives. Chipotle’s new plan ties executive bonuses to making the company more diverse and sustainable. It also addresses gender and pay equity, and helping existing employees move up in the company.
Laurie Schalow, Chipotle’s chief corporate affairs and food safety officer, said these goals were already in the works.
“But pulling a diversity and equity and inclusion goal to the forefront definitely was impacted by the events of last year,” she said.
Initiatives like this are good for a company’s image and its bottom line, according to Matthew Slaughter, dean of the business school at Dartmouth College. They attract investors, open up new markets and help recruit desirable employees.
“They’re choosing which companies they would like to be part of based on these explicit statements of goals and values beyond just financial rates of return,” he said.
Goals and values, in other words, that money can’t buy.