Advanced Auto Parts Inc: Disclosure of Key Diversity and Inclusion Metrics

BE IT RESOLVED: Shareholders request that Advance Auto Parts Inc (Advance) report on the effectiveness of the Company's diversity, equity, and inclusion efforts to create a workplace where all employees can contribute to the Company’s success. The disclosure should be done at a reasonable expense, exclude proprietary information, and provide transparency on outcomes using quantitative metrics for hiring, retention, and promotion of employees, including data by gender, race, and ethnicity.

SUPPORTING STATEMENT: Quantitative data is sought so that investors can assess and compare the effectiveness of companies’ efforts to ensure meritocratic workplaces. It is advised that this content be provided through existing sustainability reporting. An independent report is not requested.

WHEREAS: Racial discrimination is prohibited under the Civil Rights Act of 1964. Research indicates that investors benefit from companies with more diverse management. As examples:

McKinsey studies have consistently found that companies with greater diversity in corporate leadership are more likely to outperform peers on profitability. This includes a 39 percent greater likelihood of outperformance for companies within the top quartile for gender or ethnic representation in their executive teams, versus those in the bottom quartile.[1]

Research from Whistle Stop Capital and As You Sow reviewed the manager diversity of over 1,600 companies. Linear regression found statistically significant positive correlations to many key financial performance indicators, including free cash flow, return on equity, return on invested capital, revenue growth, and, as illustrated above, share price performance.[2]
A 2024 meta-analysis found that companies with diversity and inclusion initiatives experience a range of benefits that include increased innovation, enhanced employee engagement and satisfaction, and improved decision-making.[3]

Companies must protect their workplaces against discrimination, and investors must have meaningful data to monitor their effectiveness. Unfortunately, studies show that women and people of color face barriers in recruitment, hiring, and promotion.[4]

Investors have reason to be exceptionally concerned with Advance. The Equal Employment Opportunity Commission has recently sued Advance, alleging a hostile work environment for gay and Black workers and for “...fail[ing] to take prompt corrective action to stop the harassment.”[5] Additionally, in a research study looking at hiring practices, Advance was identified as a company showing a strong bias towards White candidates.[6]

As of this resolution’s filing, Advance had yet to release its consolidated EEO-1 form, which shows its workforce diversity. In addition, the Company did not disclose sufficient hiring, promotion, or retention data to allow investors to effectively assess the Company’s ability to build and maintain diverse management teams.

More than two-thirds of the S&P 500 and almost half of the Russell 1000 have released, or committed to release, their consolidated EEO-1 forms.[7] AutoZone, O'Reilly Automotive, and Ford are just some of the companies that release more diversity and inclusion data than Advance.

[1] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact

[2] https://www.asyousow.org/report-page/2023-capturing-the-diversity-benefit

[3]https://www.researchgate.net/publication/380115625_ENHANCING_ORGANIZATIONAL_PERFORMANCE_THROUGH_DIVERSITY_AND_INCLUSION_INITIATIVES_A_META-ANALYSIS

[4] https://www.bloomberg.com/opinion/features/2024-07-29/white-men-the-most-likely-to-get-hired-even-with-dei-finds-research; https://mitsloan.mit.edu/ideas-made-to-matter/women-are-less-likely-men-to-be-promoted-heres-one-reason-why

[5] https://www.jdsupra.com/legalnews/eeoc-sues-advance-auto-parts-for-1141337/

[6] https://www.bloomberg.com/opinion/features/2024-07-29/white-men-the-most-likely-to-get-hired-even-with-dei-finds-research

[7] https://www.asyousow.org/report-page/workplace-equity

Resolution Details

Company: Advanced Auto Parts Inc.

Lead Filers: As You Sow on behalf of Amalgamated Bank

Year: 2025

Filing Date:
November 2024