BOSTON/NEW YORK — Last month, an activist investor urged a German medical care company to add diverse directors to its board. The investor, Washington-based CtW Investment Group, determined the German company lacked diversity by studying photos of directors and reviewing their backgrounds online to determine their race.
“It’s a very crude way,” acknowledged Dieter Waizenegger, executive director of labor-affiliated CtW. Without formal declarations by the directors themselves, he said, outsiders could not be certain of their race.
The German company, Fresenius Medical Care AG, said its six-member board includes directors of five different nationalities and two women. But Fresenius does not ask its board members or employees “to make statements on their ethnic or racial origins,” a spokesman said.
Racial diversity in the boardroom has come under new scrutiny after the death of George Floyd, an unarmed Black man, in police custody in May triggered global protests about racism in Western societies.
But as investors, executives and politicians demand greater racial and ethnic diversity in Western corporate boardrooms, they say they are running into a thorny problem: how to tell the ethnicity of directors in the absence of much self-reporting and disclosure.
The lack of data, they said, is slowing progress on efforts to improve diversity in the top echelons of global corporations. Their attempts to increase disclosure so far have run into hurdles, such as concerns the practice is divisive or that some directors don’t want to list their family backgrounds.
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