When it comes to leadership diversity, results are mixed

Publicly owned companies have been coming under increased pressure to improve and disclose their diversity. In fact, on Aug. 6, the Securities and Exchange Commission approved new rules that will require companies that list shares on the Nasdaq exchanges to meet certain race and gender targets.

But private companies are mostly … private. They don’t have to even disclose their leadership team, much less justify their gender or ethnic balance.

And most are tightlipped about the whole subject, unlike many publicly traded counterparts and nonprofits who, on the whole, make a big deal about it publicly.

To get an idea of how New Hampshirebased private companies are addressing an issue that has grown evermore at the center of conversations among businesspeople, NH Business Review looked at the largest private companies based in the state, according to our 2021 Book of Lists. We found that about 34% of top executives at the firms were women, a lot higher percentage than found at the state’s publicly traded companies, though only 4.3% were people of color and none were Black — a slightly lower percentage than their public counterparts.

The percentage of the state’s population who are Black, Indigenous and people of color is 10%.

But, as seen at publicly traded companies, diverse leaders at private companies are often not in the uppermost positions. Of the 13 companies, only two CEOs are women, and only one — Turbocam — is a person of color, and he is the company’s founder.

The findings are similar to those in a recent survey of CEOs of Fortune 500 companies conducted by a Guilford College professor and published in January. According to the survey, 86% of CEOs are white men, down from two decades ago when they accounted for 96%. Indeed, the first two Black CEOs in that exclusive club were hired in 1999. There are now five.

When it comes to upper management of Fortune 500 companies, white woman made some gains, now accounting for 23%, as opposed to 19% a decade ago. The percentage of Blacks in upper management, however, hovered at about 3%, the number of people of Asian descent decreased from 8% to 6%, and the percentage of Latinos in upper management dropped from 4% to 1.4%.

Workplace initiatives

It may be fairer to compare diversity among private companies to the local population, since both their customers and workforce tend to be more local. That’s especially true when it comes to top management, since board members just have to fly in for meetings, where executives need to be at headquarters (though Covid might have changed all that, at least for the time being).

On the other hand, said Monica Zulauf, president of the Manchester-based Diversity Workforce Coalition, “I’m hearing less of ‘What do you expect? You live in New Hampshire.’ Besides, the last time I checked half the state’s population were women.”

It should be noted that NH Business Review looked at only the 13 largest private companies in the state. The state has thousands. And some are very diverse, as seen with many of the members of New Hampshire Businesses for Social Responsibility.

According to the group’s recent poll, women make up 73% of senior leadership of its member organizations. Nearly 11% are BIPOC executives, another 11% are immigrants, and people with disabilities hold 5.4% of leadership posts. About a third of the companies conducted some form of workplace training on diversity and inclusion and more than a fifth used affirmative action in hiring or career advancement.

The group is hoping to hold a half-day diversity conference sometime in the fall. NH Business Review will be holding its own diversity, equity and inclusion breakfast on Sept. 15 in Bedford, “DEI: From Talk to Action.”

Yankee Publishing, the owner of NH Business Review, is not large enough nor transparent enough to be included in this article. Its leadership is currently not publicly available but, in the interest of full disclosure, the company did say its nine-person senior management team includes three women, one of whom was born in India to Indian parents, and a man who is part Peruvian.

Indeed, at the last team company meeting, the main topic was how to approach DEI, in terms of drafting a statement and how Yankee could make a difference in this area, said Jamie Trowbridge, the company’s CEO.

‘Reflection of our community’

As for the 13 largest private companies on the list, Londonderry-based Berkshire Hathaway HomeServices Verani Realty is headed by a woman and its leadership is more than 62% female.

It is more difficult to achieve gender equity in firms that are heavy on engineering, maintained Pete Hanson, director of talent development at Turbocam. “We tend to promote from within, and engineering has been very maledominated,” he said.

That is changing, though only 20% of U.S. engineering degrees are earned by women.

Turbocam has been encouraging more female applicants, participating in high school robotics programs and Women in Manufacturing New England. But, “We are still in our first generations of senior leaders here. Most of them have 10 years,” said Hanson.

He said some women have been coming up through the ranks and have reached middle management, including the director of administrative services and communications and the overseas unit operations manager.

When it comes to the BIPOC population among its top leadership, the company is more diverse, though perhaps “diverse” isn’t the word, since the company’s CEO is from India and the two other leaders are family members. But the company shouldn’t be faulted for that because of its geographical area, said Hanson.

“We are already a reflection of our community,” he said, adding that there are times when diversity might do a disservice, if people perceive that a person is there “just because of their color. We aren’t going to make decisions based on someone’s race.”

For Evan Smith, CEO of Hanover-based Hypertherm, DEI has been an important goal for quite some time. Smith has signed two pledges, including the National Association of Manufacturers’ Pledge for Action. Hypertherm’s action is to try to increase the BIPOC percentage of its workforce from 12% to 15%. It is currently at 14%.

He also signed the CEO Action for Diversity & Inclusion pledge. In this case, the firm is trying to hire more disabled employees by working with an organization called Creative Workforce Solutions.

But when it comes to leadership, Hypertherm has faced some of the same challenges as Turbocam — fewer women entering the engineering field and an entrenched senior management.

Still, the company is making an effort and not just to look good, said Jenny Levy, Hypertherm’s executive vice president of people, community and environment.

“We see this is as really better for our business. The more diverse our team and more inclusive our workplace is, the more innovative we will be,” she said.

Bob Sanders can be reached at bsanders@nhbr.com.