I don't even remember how the conversation came up. It was a group of us sitting around the dinner table, and we were talking about Human Rights Campaign and its annual ratings of major corporations. Before I knew it, people were downloading the charity's iPhone app, and we were alternately breathing a sigh of relief at companies we could continue to patronize and groaning about companies that we'd have to cut ties with.
Let me backtrack for a second here. For those not familiar, HRC is a nonprofit organization that is "working to achieve lesbian, gay, bisexual and transgender (LGBT) equality." Each year, HRC puts out its Corporate Equality Index, which is a ratings system that measures the LGBT equality at each company.
Notably, we weren't all gay at the table -- in fact, only one of us was. But every time a company was read off as having a terrible score, we talked about which better-scoring companies to give our business to.
Check your issues at the bottom line
Frankly, it doesn't much matter where you stand on the issue, because when it comes to major corporations this could mean real money. As my Foolish colleague Selena Maranjian highlighted last summer, the U.S. LGBT adult population wielded $743 billion in buying power in 2010. And when you consider the further reach from friends and family members, that clout could be considerably larger.
As far as the HRC ratings went, not only did some major companies receive lousy scores -- Nokia clocked in at 50 out of a possible top score of 100 -- but many didn't even return the survey. The general feeling around the table is that if the company in question didn't even take the time to return the survey, it's highly unlikely that it's much of a promoter of LGBT equality. As such, it was a bit of an awkward moment for this Berkshire Hathaway
So little time, so many surveys
I can't say that I was particularly surprised that Berkshire was among the companies that didn't return the survey. Besides the fact that I'm very likely a Berkshire apologist, the company is run in a largely decentralized fashion with minimal staff at the corporate level and a hands-off approach to the companies that it owns.
But as I thought about it, even for larger, more centrally run companies, surveys like this could end up being a pretty time-consuming proposition. Doing just a few minutes of Internet research, I was able to find Hispanic Business' Supplier Diversity Top 25, WorkplaceDiversity.com has a Top Companies for Blacks in Technology award, Woman Engineer and CAREERS & the disABLED offer, respectively, the top 50 employers of women engineers and individuals with disabilities, and Black Enterprise issued a Best Companies for Diversity list that covered African-Americans and ethnic minorities in general.
I probably could have easily dug up reams of similar lists, and, of course, where there are serious lists like those above, there are bound to be some more wacky ones as well (what are your policies with regard to left-handed Capricorns with sweaty palms?). In other words, you could almost see a company needing to employ someone full time just to vet these surveys and then spend time filling them out -- not to mention responding to them via internal policy changes.
The cost to be the boss
When you're a small -- or even smallish -- company, that may seem utterly ridiculous. But when you're Google
And, in fact, many companies show up again and again when it comes to these surveys. Here's a look at some of the top publicly traded companies from Fortune's 2011 list of the best companies to work for.
Fortune Best Companies Rank
|4||100||No. 4 top women engineer employers, No. 16 top CAREERS & disABLED employer|
|Cisco||20||100||No. 37 top CAREERS & disABLED employer|
||49||100||Best Companies for Diversity top-40 employer|
||51||100||No. 44 top CAREERS & disABLED employer, Best Companies for Blacks in Technology|
||71||100||Best Companies for Diversity top-40 employer, No. 9 top Hispanic Business Supplier, No. 20 top CAREERS & disABLED employer|
||72||100||No. 2 top CAREERS & disABLED employer, No. 13 top women engineer employers|
Source: Fortune, Human Rights Campaign, Equal Opportunity Publications, Hispanic Business, WorkplaceDiversity.com, and Black Enterprise.
Does it really matter?
I'd say that it absolutely does. I began the article by talking about how poor relations with certain groups of employees can turn off potential customers. However, at least as important in this equation is the issue of attracting the employees themselves. There is plenty of competition for the best talent out there, and talent doesn't recognize the supposed boundaries that these lists focus on. Companies that don't foster a workplace that welcomes a wide range of people are going to be at a distinct disadvantage when it comes to attracting and keeping top talent.
As far as investments go, this alone doesn't make a company worth investing in, but it's another piece of the puzzle when it comes to building a comprehensive investment thesis. If you want to learn more about the stocks above, you can start by adding them to your watchlist by clicking the links below.
American Express, Berkshire Hathaway, Google, Intel, and Microsoft are Motley Fool Inside Value choices. Google is a Motley Fool Rule Breakers pick. Berkshire Hathaway is a Motley Fool Stock Advisor recommendation. The Fool has created a bull call spread position on Cisco Systems. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended a diagonal call position on Intel. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Berkshire Hathaway, Google, and Microsoft. Motley Fool Alpha LLC owns shares of Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Fool contributor Matt Koppenheffer owns shares of Berkshire Hathaway, Intel, and Microsoft, but does not have a financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.