Sunday, January 31, 2010

The Corporatocracy and Race and Gender: Inverse Convergence Theory

Sometime ago (1997?) I told my friend and colleague Professor Ro Lasso that a power shift was afoot. Specifically, people of color would increasingly comprise a larger share of the voting power in America, as depicted in the chart to the left. Undoubtedly, I asserted, this would push issues of racial justice and disempowerment to the forefront. He replied that I was wrong and that rather than a power shift the rules would be changed. While I argued with Lasso at the time, I immediately sensed he was on strong ground.

Professor Derrick Bell argued long ago that racial reform only occurs when the interests of elites converge with the interests of those seeking reform. Logically, it follows that without this convergence reform will not occur, or worse, if elites are threatened they will naturally seek ways to postpone reform or enhance their relative position.

So, consider Citizens United v. FEC. The decision leaves many unanswered questions. The consensus, however, is that the decision marks a major power shift towards corporations and away from individuals. Certainly, the case opens up another means by which corporations can use their wealth to influence politics, and there is good reason to conclude we are about to see a "money free-for-all" take over our political system.

Who runs these newly empowered corporations?

Well, as Cheryl Wade recently pointed out there has been one female of color who has ever served as the CEO of a Fortune 500 company--and that happened only last summer. That appears to bring the total number of African American CEOs to five. As of November, 2007, there were four Latino CEOs and fourteen women.

With respect to board seats, men hold 83% of all Fortune 100 directorships. Latinos and African Americans hold 14% of such positions and Asian Americans hold 1%. For Fortune 500 companies the reality is bleaker--there are even fewer African American directors and the number is declining. Only 3% of all Fortune 500 board positions are held by Hispanics.

To the extent that Citizens United shifts political power to corporations, fundamentally, it shifts power away from communities of color (and women) notwithstanding their increased voting power.


  1. This comment has been removed by the author.

  2. I am amazed to always see how the political realm is sometimes ruled by factors not neccessarily related to the "democratic" process. I am very curious to know why the African-Americans and women numbers are on a decline as it pertains to positions being held in major corporations. The elite have the ability to control quite a few things, but those who seek to have a reform really need to find a way to leverage their platforms and make a substantial impact on a national scale. It sounds great in theory,but there is always so much "red" tape. As the article stated, there truly needs to be a convergence of the interests of those in the elite class and those seeking to have some type of reform. I like to truly stand and believe that our country is a fair democracy, and truly I hope that our political system does not become a "money-free-for-all"...
    -David H. Kenton

  3. I personally believe that the increase in racial minorities has forced the U.S. to speak about topics that were initially considered forbidden subjects. One could not speak about the problems impacting race without being considered racist or the like. I feel there has been more attention paid to racial issues with the election of President Obama (although I am disappointed that he is, many times, called a black man when he is biracial). Since President Obama’s election, many issues regarding race have come to the forefront, and I think racial minorities are getting a chance to stand up and have their voices heard. However, the recent decision by the U.S. Supreme Court may have far-reaching consequences that we have not even began to look into. Besides diminishing the voices of individuals (no matter what race), there will soon be class issues that will arise because middle and lower class citizens will also lose their voices as well. Small business owners will not matter, and you can forget it if you are a non-profit public interest organization. An exponential growth in breaking glass ceilings at fortune 500 companies is unexpected. We can only sit back, wait for the results, and see how many fingers will be pointed by republicans and democrats, liberals and conservatives, men and women, because soon enough everyone will be playing the blame game for this decision.

  4. Good grief. I had not even considered the Citizen's United decision in light of further entrenching power in the hands of white male elites. It appears now that those in power, Roberts, Alito, Scalia, etc. are not even attempting to be covert about their desire to perpetuate a system and a power base. Unbelievable.

  5. This is a powerful post. It is THE response to those who note the increasing numbers of Americans of color. While there will be more Americans of color in the US in general, the numbers of people of color, as Steve points out, on corporate boards, among the ranks of senior executives, have not increased significantly. Think about the political power granted corporations under the Citizen's United case coupled with the dearth of senators of color, and the lack of significant "minority" presence in other aspects of American life. We are moving into dangerous territory. And, there are no longer major social movements, like the Civil Rights movement of the 50s and 60s, that deal with this dramatic usurpation of political power.

  6. Yes, it's frightening, those evil, entrenched white male elites. How dare they build corporations and not appoint Americans of color to key positions in management and the boards of directors. What do they think all these immigrants are coming here for? I mean they've left countries like Mexico, Guatemala, Nigeria, Somalia, China and India where white males are not in charge and everything is perfect to come here and show these ignorant racists how to run things. Only when people of color are in charge of the evil corporations will there be justice in the world.

  7. Fortune 500 companies are in the business of keeping the status quo; especially when the status quo leads to them making exorbitant amounts of money. In terms of the race and gender issues with CEOs, that trend will continue in the immediate future because the upper echelon of business has always been a "boy's club" in which only a select few men make it to the very top and once they do, they are inclined to keep those who got them into their lucrative position happy by continuing the status quo. I don't believe their motives are racially charged; I feel as though they are economically charged because the overwhelming majority of their shareholders are indeed white men.
    While I do feel as though their motives are economically driven, I do feel as though race clearly plays a part in the economic structure that is in place today. And for that reason, the inverse convergence theory is many year away from being fully implemented in our economic society

  8. Although there are only a handful of blacks, Hispanics, women, and other minorities in CEO positions of major companies today, I am curious as to how many minorities held those positions fifty years ago. If I had to guess, the number would be around zero. Although the change is slow, at least it is happening. I think in our children's generation, as more and more minorities prove themselves and break the mold, the CEO demographics will mix up even more. This kind of change takes time, and if people are passionate about it, minorities will be better represented in positions of power in the future. That's not to excuse racial discrimination happening today, but I see progression in our country, and more to come.

  9. I do not think the dynamic is discrimination or racism. Instead, I think it is rational for CEOs, who enjoy much autonomy in board selections, to stack the board with their cultural clones. Thus, I think of the demographic reality more in terms of racial hangover than racial discrimination.

    Similarly, I never termed white males "evil." Instead they are simply maximizing their payoffs in response to incentives. Certainly, diverse groups make better decisions than culturally monolithic groups (assuming diversity is well-managed) but that is beside the point for profit maximizing CEOs. They want advantageous compensation arrangements.

    Note also that many CEOs embrace diversity and in fact are among the loudest voices in favor of diversifying their firms. These CEOs take seriously the goal of protecting shareholder interests.

    The fact I bemoan in the post is a simple truism: Citizens United Shifts power from a more diversified voting public to a culturally monolithic (in general) corporate elite.

    In terms of any subtle note of white supremecy that may be detectable above, I would simply highlight that none of the countries mentioned above has ever crashed global capitalism. And, while the USA is wonderful country on many fronts, it also has its dark pages.

    The assumption of the USA as an exemplar of white supremacy is senseless. It is the opposite. It is the exemplar of the power (or at least the potential) of diversity. But, its diversity could be managed better, on many different levels.

    Finally, corporations are not evil. They are a basic engine of economic properity everywhere and always.

    Unfortunately, as I have argued many times, the current CEO primacy system of corporate governance has perverted the basic power of the corporation to funnel passive capital into investment.

  10. I understand the frustration but I refuse to subscribe to it. If anyone disagrees with the disparity in corporate control, they ought to do something to change it. Isn't that what we are in the business of doing? To say that we cannot change the status quo is not telling of the current corporate paradigm--it is telling of us as future leaders. Moreover, I am far more interested in shared ideology, morals, and character than I am with shared ethnicity. Stop worrying about demographics in corporate America if you feel an imbalance. Rather, work to start your own Fortune 500 company and choose your own CEO.

  11. Corporations and other business entities that embrace diversity will become deeply enriched in more ways than financial gains. Unfortunately, I am not at all surprised the by the lack of minorities in CEO positions. Contrary to popular belief, a form of "unconscious" racism continues to invade all facets of our lives. Nevertheless, change will never come about if we simply complain about injustice rather than take action.

  12. I am not shocked by this report; however I am deeply saddened by it. To know this great country of ours continues to face such an uphill struggle with race and the unchangeable silver ceiling. Recently I have witnessed the race issue detour to a power struggle issue between the haves and haves not. When these two issues are coupled together, it only leaves room to one solution. Professor Derrick Bell spoke of this solution when he stated that “racial reform only occurs when the interest of the elites converge with the interest of those seeking reform”. Those who hold the power do not wish for change, unless they are affected and such change will not relinquish the power they hold.

  13. I agree with Ms. Styons on this subject. I think that just because Citizens United v. FEC said, "The Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether," doesn't mean that we are about to see a "money-free-for-all." I think that it is possible that the people in high positions within corporations made it to that position by working hard and deserving to be there. While I may be covering my eyes, I don't want to think that boards of directors are appointing these officers simply because of their skin color. As Ms. Styons said, "I think in our children's generation, as more and more minorities prove themselves and break the mold, the CEO demographics will mix up even more" -- I wholeheartedly agree with this. Change does take time, and it is unfortunate that people of color are not more evenly represented within corporations as officers; however, I do not think that the holding from Citizens is going to directly lead to CEOs stacking the boards with their "cultural clones."

    -- Caroline B. Paul

  14. In terms of any subtle note of white supremecy that may be detectable above, I would simply highlight that none of the countries mentioned above has ever crashed global capitalism. And, while the USA is wonderful country on many fronts, it also has its dark pages.

    None of them are responsible for creating global capitalism either. And while the USA may have it's dark pages, so does every country including the ones mentioned above. In fact, those pages may be far darker.

    The point is that many of the people you claim will lose political clout as a result of Citizens United - a claim that lacks any evidence aside from your subtle racist attitude toward whites - have chosen of their own free will, in some cases at the risk of their lives, to leave countries run by people of their own race and culture to come to a country that you continually describe, in hush tones, as racist and indifferent to their concerns. Why? If they had migrated to China they would not have been surprised to find a majority of Chinese leading the major corporations, yet you seem shocked to find white people leading corporations in a western country like the USA.

    In fact, I challenge you to name a country where the racial and cultural majority has been as tolerant and accommodating as the USA has been to immigrants of different racial and cultural backgrounds. Why is it that you seem to lack any appreciation of this?

  15. GERMAINE ANTHONY AUSTINFebruary 16, 2010 at 12:25 PM

    Men lie, women lie but numbers don’t. I checked out the percentages located in this article myself and the percentages are around the same from different sources. It's obvious that there has been a power shift away from individuals and towards corporations. After all, even the government we so dearly believe in will call on big corporations from time to time to stimulate the economy and make things better. It's all a money, hungry pushing issue. When I look at the statistics it makes me wonder, the characteristics of those running fortune 500 companies seem to be the same characteristics that sat at the round table writing the United States Constitution, well if you ignore the small speck of minority presence. As the number of minorities increase, I wonder if it's a cover up to keep racial tensions submerged a peace offering to keep quiet. I fully believe in diversity and I embrace it as a circular balance. I can only hope that real change will turn up in the future to diversify fortune 500 companies. In the end, big companies will always influence politics and the goal of the influence will include fueling their own personal needs, goals and agenda.

  16. Jamil Davis

    As previously posted by others, it is not a surprise that the power shift has gone from the individual back to the corporation. In the corporate world, they have given just enough to make one feel as though there has been great progress but in reality they have only given out what they wanted. Now after Citizen, corporations are more amd more inclined not to expnad but to stay status quo because that is what they are accustomed to doing. The true shift will occur when more corporations are forced by sheer numbers to shift back to the individual in order to sustain a profitable business. In the end, it always comes down to profit. If the alternative is to embrace minority candidates or lose money, corporations won't think twice. The dollar is more power than any thing else.