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New York City Comptroller Pressures Ad Holding Firms to Release Diversity Stats

New York City officials are once again pressuring ad holding companies to disclose data pertaining to the diversity of employees, and so far, they've been met with little success.

In particular, Omnicom Group is being grilled for declining to disclose its diversity data following a mandate from New York City Comptroller John C. Liu regarding the city's pension funds.

This isn't the first time ad holding companies have been asked to supply diversity data. In 2006, they were asked by the New York City Commission on Human Rights to ramp up initiatives to hire more minority employees. Despite its longstanding focus on the diversity issue in the ad industry, the Commission on Human Rights is not involved with the Comptroller's effort and it refused to comment for this story.

Mr. Liu's initiative began in November, when his office sent letters to the four biggest holding companies in the business -- Omnicom, Interpublic Group of Cos., Publicis Groupe and WPP -- as well as several other large corporations outside of the ad industry.

Citing little diversity in the advertising industry, the office asked for data classified by race, gender and job categories, and for workplace diversity data to be disclosed annually thereafter. According to a statement from Mr. Liu, the moves were spurred by an effort to create a more diverse workforce across the city; his office's position is that diversity also benefits pension funds and "long-term shareowner value on company performance."

Omnicom Group has resisted pressure to provide that data. A Publicis spokeswoman told Ad Age: "We are in a similar situation as Omnicom." WPP could not be reached for comment by press time. Companies outside the ad industry, such as Goldman Sachs and MetLife, have agreed to comply.

Because Omnicom is the one holding company on U.S. soil that hasn't responded -- the office is understood to be having some "dialogue" with Interpublic, according to a person familiar with the matter -- the Comptroller's office is singling out the company. Mr. Liu is now trying to strong-arm Omnicom by going to shareholders, urging them to vote for a proposal that would mandate it to disclose its data.

It's understood that shareholder votes in this case are non-binding. So, even if shareholders vote in favor of the Comptroller's mandate, it's still going to be up to the company to decide how, if at all, it releases its diversity stats.

Tiffany Warren, chief diversity officer at Omnicom, spoke with Ad Age about the matter. She said that the holding company is making strides when it comes to recruiting and retaining multicultural talent, but that it simply doesn't think it's in Omnicom's best interests to comply with the Comptroller's request.

Ms. Warren said the company later this year will release a national report outlining some of its results in the diversity space. It will be the first time that the company, with help from Fleishman-Hillard, releases its diversity report independent of its report on corporate social responsibility.

"[Our report] is a national project, not local to New York City," she said. It will "talk about how internal and external outreach has been" in addition to quantitative achievements regarding the agencies' efforts in "bringing in and hiring, and also retaining diverse employees, as well as women."

When asked why Omnicom doesn't comply with the Comptroller's latest request if it already plans on releasing some of its data, Ms. Warren referenced the company's position on the matter which was included in its most recent proxy statement.

It said: "Data is neither informative nor is it a reliable measure of our commitment to equal opportunity employment. We do not believe that disclosing it will meaningfully further the goal of workplace diversity. To the contrary, this information, which is susceptible to misinterpretation, could be manipulated by those with interests adverse to Omnicom's and harm the company."

Six years ago, when the Human Rights Commission made its requests for diversity figures, Omnicom also played by its own rules. Ad Age reported that rather than initially join the other holding companies in setting specific goals, Omnicom set its own goals, pledging more than $2 million for diversity initiatives, including the establishment of an advertising, media and marketing curriculum at the historically black Medgar Evers College.

It later hired Ms. Warren in 2009 in its newly created chief diversity officer post.

Eventually, Omnicom came around to setting diversity goals for its agencies, but it's unclear years later whether or not those goals have been met or are still in place. Ms. Warren declined to comment on the past events.

 

Alexandra Bruell, Advertising Age. April 18, 2012

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