Target: A Cautionary Tale in Corporate Diversity Ratings

Target Corporation, as Michael Jones wrote here at Change.org last Sunday, has given $150,000 to a political action committee (PAC), Minnesota Forward, which supports Tom Emmer,  Minnesota Republican candidate for governor. Emmer's campaign has previously given money to a ministry that believes Muslim countries that execute gay men and lesbians are more moral than American Christians. The news is even more upsetting, however, when one considers that Target received a perfect score of 100 on the Human Rights Campaign's most recent Corporate Equality Index (CEI).

The CEI rates firms according to various metrics, including LGBT-inclusive nondiscrimination policies and training, benefits for same-sex partners of employees, transgender-inclusive medical benefits, and external LGBT-specific efforts such as advertising or philanthropy. Finally, HRC rates companies on "responsible citizenship," or engaging in "no known activity that would undermine LGBT equality." Target's monetary connection to Tom Emmer will presumably lose it points on the last metric in the next CEI, unless it does something to change its ways.

Target's CEI rating was not in error: the current CEI was calculated in July 2009 and published in September 2009, before Target's donation to Minnesota Forward. The situation, however, highlights some of the difficulties and limitations of  diversity ratings of this type.

First, the CEI apparently does not take into account contributions to anti-LGBT politicians. The "no known activity that would undermine LGBT equality" metric would seem to cover that sort of thing, but HRC Press Secretary Paul Guequierre, in a statement about the Target situation to Philip Lowe at the MN Progressive Project, said that "political contributions to support candidates are not a factor in HRC Foundation's Corporate Equality Index." And in 2006, Fannie Mae scored 100 on HRC’s list, but contributed money from its corporate foundation to anti-gay causes, including $50,000 to the Traditional Values Coalition. The Advocate, however, which compiles its own "Best Companies" selections, noted the donation and dropped Fannie Mae from its list. (The Advocate article is no longer online.)

Regardless, because ratings are calculated only once a year, they may not reflect up-to-the minute corporate activities, good or bad.

Also, it takes work to find extended connections like the one from Target to the PAC to the candidate to the anti-gay ministry. Chances are that some will slip through the cracks — not that that's an excuse for shoddy research; it's just reality.

That brings us to our next point: different groups rate companies in different ways. For example, DiversityInc publishes "Top Companies" lists for employees based on race, gender, (dis)ability, and being LGBT. For the LGBT list, they start with companies that scored a 100 on HRC's CEI, but they also speak with other LGBT organizations for their recommendations and add in "a critique of the company's corporate web site to determine if there is inclusive content specifically aimed at LGBT employees and customers."

Want to study companies across various diversity categories, such as race, gender, being LGBT, parental status, or disability, among other things? That gets even more difficult, because each rating organization looks at a slightly different population. HRC's CEI includes the Fortune 1000 list of largest publicly traded businesses, American Lawyer's list of the top 200 revenue-grossing law firms, and any private, for-profit company with more than 500 employees that wants to apply. Black Enterprise's "40 Best Companies for Diversity" list looks at the top 1,000 publicly traded companies as well as the 50 leading global companies with strong U.S. operations. Working Mother's "100 Best Companies" list includes public or private companies with a minimum of 500 employees in the U.S., which offer their own benefits program and report to their own CEO, except for those “in the business of providing work/life or child-care services.” DiversityInc's "Top 50 Companies for Diversity" list is perhaps the best comprehensive assessment across categories, but does not tell us anything about companies below number 50. (The HRC CEI is the only one of the above that releases ratings good or bad, as opposed to a selective, "best-of" list.)

Despite their limitations, however, diversity ratings do provide a useful rough guide to a company's policies and intentions. Your mileage may vary as an employee or a customer, of course -- much depends on individual managers and local office climate -- but at least you'll have a sense of whether you'll get support if you need to elevate a problem to a higher level.

That is why it is so jarring when a company that has seemingly good intentions, like Target, runs afoul -- and not, it seems, from intentional bias, but rather from not thinking through the ramifications of its political donations. A Target spokeswoman told Minnesota Public Radio that the company gives funds not based on party, but rather on matters that "directly effect [sic] the company's retail agenda." It gave to Minnesota Forward because "the group's mission is to elect candidates from both parties who are focused on making 'economic growth a priority.'"

What we need to do now as a community is to make companies aware that supporting anti-LGBT politicians will impact their retail agendas, because we will make fair-minded people aware that they are supporting bias, if not hatred.

Photo credit: Patrick Hoesly