Mellody Hobson, Co-CEO and President of Ariel Investments, speaks at the Fortune Most Powerful Women Summit 2017 in Washington, D.C.
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The lack of diversity among the highest echelons of American business is certainly not new, but in recent months social unrest has brought the issue into the spotlight. And this time around, Mellody Hobson, Co-CEO of Ariel Investments, believes there could be real change.
"I called this civil rights 3.0 … This problem lies at the feet of American companies," she said on Wednesday during a conversation hosted by the Economic Club of New York. "Now we have these race-related issues that had a direct impact on the bottom line. I think it's different this time because it's a business issue now," she added.
Hobson did an internship at Ariel Investments during his undergraduate studies before moving full-time after graduation. She worked her way through the ranks of the company for several decades and was named co-CEO of the company in July 2019. Along the way, she has advocated greater diversity in the ranks of businesses.
She noted that companies have been talking about diversity for years, but it's an area where traditionally there has been little consequence of lack of progress. This time, however, she believes the public will hold companies accountable.
"I said we need less lip service and we need more elbow fat and so I think this time will be different because we live in a society that holds us accountable … I think there is no way too In fact, they have real results now: people are watching, "said Hobson, who serves on the boards of JPMorgan Chase and Starbucks.
But it's not just a moral issue, it's also a financial one. Countless studies have shown that companies with more diverse voices and perspectives in the boardroom outperform their competitors. Or as Hobson put it, "To be a world-class company, you have to have different people around the table … it's more about realizing shareholder value for our investors."
Their comments follow an announcement by Nasdaq that the more than 3,000 publicly traded companies are pushing for greater diversity at the board level.
The exchange operator filed a proposal with the Securities and Exchange Commission on Tuesday that companies must have at least two different directors: a woman and a person who identifies themselves as either an underrepresented minority or LGBTQ.
Hobson called the move "fantastic" and said that there was still a lot of work to be done but that she was "expecting a situation of continual improvement because it is required".
"But we also need to be intellectually honest as individuals and hold ourselves accountable," she added.