Starbucks Board Recently Snubbed a Diversity Proposal

By Eve Tahmincioglu
April 16, 2018

Shareholders pushed Starbucks to be more transparent and proactive about diversity at the top.

Starbucks is now embroiled in a diversity controversy after a video showing two black patrons being removed from a Philadelphia coffee shop in handcuffs went viral.

In an attempt to quell the backlash, the company announced the manager at the store is no longer working there; Starbucks CEO Kevin Johnson said he has plans to make a public apology to the two aggrieved customers; and he’s promising bigger moves to derail unconscious bias overall.

“My responsibility is to look not only to that individual but look more broadly at the circumstances that set that up just to ensure that never happens again,” Johnson said in an interview Monday on Good Morning America.

But could the company have done more before the crisis to bolster diversity throughout the organization?

Shareholder groups have been calling for more diversity initiatives at the coffee chain.

One particular proposal the board of directors recommended shareholders reject earlier this year called for annual diversity reports in an effort to ensure Starbucks was “capturing the potential business value associated with a highly diverse workforce.”

The proposal was submitted by Trillium Asset Management, which owns 400,000 Starbucks shares, and the purpose was to find out how much diversity the company had in leadership and what it was doing to bolster the numbers of women and minorities in management.

“This is a way of asking companies to be proactive and to be transparent,” explains Brianna Murphy, vice president, shareholder advocacy for Trillium. “Without that info we just don’t know what the workforce looks like, or if they’re truly seeking out a diverse workforce.”

Starbucks did not return a request for comment on the proposal. But on Tuesday the company announced it was shutting 8,000 of its U.S. stores the afternoon of May 29 to conduct unconscious bias training to about 175,000 of its employees.

The same day, Starbucks director and CBSNews contributor Mellody Hobson went on CBS Evening News to talk about the company's commitment to diversity.

"We've got to make this right," said Hobson.

Almost half of Starbucks workforce are minorities, Murphy notes, but only 18% of top leaders are people of color.

“There could be a racial or ethic imbalance in the company. The tone and decisions come from the top,” she continues, including decisions made on training.

Murphy says she is glad the company is saying they want to provide unconscious bias training, and she believes, “Starbucks is a great company. But we believe they can do better.”