For Most Minorities, Heads Still Bump the Glass Ceiling

Thirty years after the federal government launched a program to improve prospects for minorities in the workplace, people of color remain underrepresented in corporate America - especially at top levels of management.

In the end, experts say, lawsuits may speak louder than any affirmative-action program. As news of a $176 million settlement against Texaco Inc. filters through corporate America, many companies are rushing to reexamine their own practices for hiring and promoting minorities.

"I think it [the Texaco case] will have a very specific impact in getting senior management to handle diversity issues," says Lawrence Otis Graham, a diversity workplace expert and New York attorney. Indeed, after the broadcast media aired racial slurs taped at meetings between Texaco officials, Mr. Graham received 17 calls the next day from companies asking his consulting firm to review their diversity plans or to help draft new ones.

While most agree that corporate America has made some strides in hiring and advancing minorities and women, "we still have a very, very long way to go," says Rene Redwood, former executive director of the Federal Glass Ceiling Commission, a bipartisan panel created by Congress in 1991.

Of the senior managers of Fortune 1000 and Fortune 500 companies, 97 percent are white and 95 percent are male, according to a 1995 commission report. Black women, the report found, have a tougher climb to the top because they face a "doubled-edged sword" of sexism and racism.

A nationwide survey released during the summer buttresses the government report. Coopers & Lybrand found a slight increase in the numbers of minorities serving on corporate boards of directors, from 2 percent in 1994 to 4 percent now. Hispanics and Asians are at 1 percent each.

A discrepancy in pay also persists between blacks and whites. Black men with professional degrees, for example, on average earn 21 percent less than their white male counterparts, according to the Glass Ceiling Commission report.

Part of the problem is that not enough minorities are on a career ladder that leads to the boardroom. According to the Glass Ceiling Commission, the critical career path for senior management positions in corporate America has been finance, marketing, and operations - areas that are directly related to the bottom line. Yet many minorities and women tend to get jobs in personnel or public-relations departments, whether by choice or by assignment.

"Companies are inadvertently creating functional ghettos," says Jeffrey Sonnenfeld, director of the Center for Leadership and Career Studies at Emory University in Atlanta.

Other barriers include recruiting and mentoring. Mr. Graham says most companies recruit at schools that have tiny percentages of minority students. "People who do the hiring and promoting tend to hire and promote those who look like them," agrees Ms. Redwood.

"A great percentage of African-Americans who enter corporate America know that they are not going to rise above mid-level management," Graham says. Many, he says, take corporate jobs simply to get experience and then start their own businesses.

The best programs have company leaders who are committed to diversity in the workplace, experts say. Such firms apply those standards to all levels of the company, including the top; set up formal mentoring programs; tie bonus compensation to minority management; and create task forces to investigate complaints. Diversity consultants say standouts include IBM Corp., Avon Products, American Express Company, and pharmaceutical manufacturer Merck & Co.

But private companies in general have less diverse workplaces than does the government sector. Because the government set up affirmative action, it therefore does a better job of complying with the law, Graham says. But he notes, too, that the public sector may be more willing to roll out such programs because it is less concerned about the bottom line.

The lawsuit against Texaco - which was filed in early 1994 by six African-American workers on behalf of 1,400 employees - was settled 11 days after tape recordings were made public of Texaco executives allegedly planning to destroy documents demanded in the suit and making disparaging remarks about black workers.

Texaco agreed to pay $115 million to about 1,400 current and former employees and to give all black employees a 10 percent raise on Jan. 1. The company will also spend $35 million to set up an independent task force that, over five years, will have authority to evaluate employment policies and practices and to develop new procedures on hiring and promoting minority workers.

Meanwhile, the Rev. Jesse Jackson says a boycott against the oil company will continue, although picketing will be dropped. He also announced that the Rainbow PUSH Action Network, based in Chicago, would buy $1,000 worth of Texaco stock to get a voice in the company.