Flower Foods Inc: Racial Equity Reporting

December 13, 2023 As You Sow

WHEREAS: Following George Floyd’s murder by police officers on May 25, 2020, a majority of the largest 1000 public corporations made public statements expressing their plans to address racial justice, thereby taking an important step in acknowledging diversity, equity, inclusion (DEI) and racial equity as core to their businesses. Shareholders now seek quantitative, comparable data to understand if and how companies are following through on their commitments to racial equity.

Unfortunately, it appears that Flowers Foods Inc. is falling behind its peers in its DEI policies and practices. Flowers Foods earned a low 6% score on As You Sow’s recent Racial Justice Scorecard.[1] Flower Foods’ score ranks significantly below that of peer company Campbell Soup Co, which scored 55%.[2] The Company’s low score is primarily due to a lack of publicly accessible DEI data and its failure to disclose information regarding related practices.

Numerous studies have demonstrated the financial benefits of a diverse, inclusive workplace, highlighting that the lack of public disclosure of DEI policies and practices, and related quantifiable data, raises material risk of reduced brand value and financial performance:

A McKinsey study listing material benefits associated with corporate policies promoting racial justice found that companies with the strongest racial and ethnic diversity are 35% more likely to outperform their industry medians for earnings before interest and tax.[3]
When evaluating companies for diversity, McKinsey found that teams in the top quartile for ethnic and cultural diversity outperformed those in the bottom quartile by 36% in profitability.[4]
Companies that form Employee Resource Groups can increase the number of diverse job applicants they receive according to a survey by the U.S. Chamber of Commerce, which states that 70% of Gen Z respondents were more likely to apply to a job with an ERG.[5] According to a recent CNBC survey, 80% of workers prefer to work for a company that values DEI.[6]

Shareholders thus have a strong interest in access to information about a company’s DEI policies and quantitative data demonstrating the effectiveness of those policies. The failure to disclose this information raises material risk of reduced brand value and financial performance.

Flowers Foods can improve its performance and reduce the material risks posed by inadequate DEI policies and practices, while also playing an important role in furthering corporate racial equity, by promoting DEI both internally and publicly.

BE IT RESOLVED: Shareholders request that Flowers Foods issue a public report on the effectiveness of the Company’s diversity, equity, and inclusion efforts.

SUPPORTING STATEMENT: Proponents suggest the public report, include information on: