In comparing the data on general
counsel from 2017 Fortune 500 and
S&P 200 companies, we have seen
some good news with the continued
increase in gender diversity. However,
there is a disparity in the growth rates
of gender and racial diversity as the
rate of increase in gender diversity
vastly outpaces that in racial diversity.
This article sheds light on the phenomenon, and presents the implications of
the findings.
Gender diversity is improving
among general counsel
With the changing demographics and
growing business competition, there
is a necessity in corporate America
to embrace diversity and inclusion.
Promoting a focus on diversity and a
culture of inclusion is critical to a company’s overall performance. On the one
hand, the strength of an organization
rests fundamentally on its talent. In
today’s business environment, an enterprise must diversify and enlarge its
sourcing pool to attract the best talent.
On the other hand, a company must
be diverse if it is to reflect the demographics of its clientele, and fully align
with the interests of its customers. Yet,
simply promoting a diverse composition within the company would not be
enough without also fostering an inclusive environment. The company and its
leadership must listen to and provide
value to the different perspectives that
diverse employees bring to the table.
Indeed, research has repeatedly shown
that diverse input in teams leads to better decision-making, greater innovation, and increased financial returns. 2
Finally, an inclusive culture increases
employee satisfaction, which in turn
generates a positive cycle of recruiting
and retaining diverse talent.
In response to this business imperative, companies have announced and
implemented various initiatives to
increase diversity. Specifically, within
the context of in-house law departments, general counsel are using both
the carrot and the stick to promote
diversity in the external law firms that
they employ. For instance, Microsoft
has created a bonus program rewarding external firms that meet certain
diversity targets, 3 and MassMutual
has terminated the use of law
firms that do not meet its diversity
expectations. 4
To date, the results within corporate
America have been promising with
regards to improvements in gender
diversity. In 2017, the data shows an
increase in the number of newly ap-
pointed female general counsel and
a continuing upward trend in gender
diversity within the Fortune 500 and
S&P 200 companies. Women now
make up 25. 5 percent of Fortune 500
general counsel, and 26. 8 percent
of S&P general counsel. Moreover,
30. 1 percent of the newly appointed
Fortune 500 general counsel are
women. Many articles have identified
this phenomenon, whether as a sign
of corporations’ taking strides toward
diversity or as a chastisement to the
slower progress of law firms. Writers
have attributed this shift to hiring general counsel from in-house positions
and not from private practice — from
which there are a limited number of
females in firm leadership. In addition, the shorter average tenure of GCs,
compared to equity partnership provides more opportunities for women to
be appointed. 5
Racial diversity is not sharing the
gains made in gender diversity
However, the improvement in gender
diversity is an incomplete picture at
best. Similar increases been not been
replicated in the diversity of minorities
within the ranks of general counsel in
Fortune 500 and S&P 200 companies.
In total, minorities make up just 10
percent of general counsel in Fortune
500 companies and 11. 62 percent in
S&P companies. Whereas the growth
rate for minority general counsel
has vacillated between nine and 10
Mark Roellig is the chief technology
and administrative officer (former
general counsel) of Massachusetts
Mutual Life Insurance Company.
mroellig49@massmutual.com
Coco Xiao is a student at Harvard
University School of Law. She was a
1L law clerk at Massachusetts
Mutual Life Insurance Company.
cxiao@jd19.law.harvard.edu
Diversity initiatives are
insufficient if they do
not also increase the
meaningful participation
at elite and leadership
levels of the profession:
substantive diversity.
60 ASSOCIATION OF CORPORATE COUNSEL
A WIDENING GAP: THE UNEQUAL GROWTH RATE IN GENDER AND RACIAL DIVERSITY
