American Express shareholders seek DEI report

May 20, 2021
Almost six in 10 support proposal at AGM

American Express investors have supported a shareholder proposal requesting that the company publish a report each year assessing its diversity and inclusion efforts.

The proposal, brought by As You Sow, garnered 59.7 percent support among votes cast at the American Express AGM earlier this month.

The vote is one of a series this proxy season of similar shareholder proposals, including several urging companies to conduct racial equity audits. Investors are looking at corporate responses to the growing pressure for progress on diversity, equity and inclusion (DEI) following last summer’s Black Lives Matter protests.

The proposal filed with American Express says the report should include disclosure of the process the board follows for assessing the effectiveness of its DEI programs, and the board’s ‘assessment of program effectiveness, as reflected in any goals, metrics and trends related to its promotion, recruitment and retention of protected classes of employees.’

The proponents write in a supporting statement: ‘The American Express 2019-2020 [ESG report] states, ‘Our senior executives take responsibility for delivering on our commitments and ensuring diverse representation at all levels. Our company scorecard, which is used to measure our performance and progress on our business priorities, includes a clear set of diversity goals and overall talent metrics. We set our scorecard metrics annually and review our progress against them regularly to hold ourselves accountable.’’

The proponents add: ‘This scorecard is not published. American Express has not released meaningful information that allows investors to determine the effectiveness of its human capital management programs related to workplace diversity. Stakeholders may become concerned that American Express’ statements are corporate puffery.’

The board recommended that shareholders vote against the proposal. It says in the proxy statement that it believes such a report is unnecessary because the company’s ESG report includes ‘metrics, data and updated and enhanced disclosures on several important topics, including the diversity of our workforce and our [DEI] programs.’

The board argues that the ESG report and the American Express website reflect the company’s ‘long history of advocating for diversity and inclusion in all areas of our business and remain committed to fostering a diverse, equitable and inclusive workplace for colleagues of all backgrounds.’

It adds that as of February 2021, 60 percent of the company’s board represented diverse backgrounds based on race, ethnicity and gender and that last year the company created an office of enterprise inclusion, diversity and business engagement. ‘Our board believes our ongoing DEI initiatives and the board’s continuous assessment of the effectiveness of such initiatives and related programs are already provided across several mediums, including in our annual ESG report,’ the board writes.

Meredith Benton, CEO of Whistle Stop Capital and workplace equity program manager at As You Sow, says in a statement on the vote: ‘Silence on internal metrics is out of alignment with American Express’ good and admirable deeds. We encourage transparency, even in the face of imperfection, in order to show that American Express is truly committed to its existing and future employees and to meaningful change, something needed across the American landscape.’

As You Sow says that, according to the group’s research, American Express lags peers in terms of releasing data on recruitment, retention or promotion statistics. 

Asked for comment on the vote, an American Express spokesperson referred to comments made by chair and CEO Stephen Squeri during the AGM about the company’s DEI efforts. Among other things, Squeri said: ‘This month, we will disclose our full EEO-1 form, and we will release a broader diversity report later this year. I’m proud to share that in 2020 we achieved 100 percent pay equity for our colleagues across genders globally and across race and ethnicity in the US and are committed to maintaining this goal going forward. We will continue to assess opportunities to bring even more transparency to this area.’

 

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