Arrow Electronics Inc: DEI Disclosure and Racial Justice Scorecard Results

November 22, 2024 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, Arrow Electronics Inc appears to be falling behind its peers in its DEI policies and practices. Arrow earned a 15% score on As You Sow’s recent Racial Justice Scorecard.[1] The Company’s score ranks below that of peer company Applied Materials Inc., which scored 41%. The Company’s low score is primarily due to its lack of publicly accessible DEI data and its failure to disclose information on its DEI related policies and practices.

Numerous studies have demonstrated the financial benefits of a diverse, inclusive workplace, highlighting that a 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 found material benefits associated with corporate policies promoting racial justice and that companies with the strongest racial and ethnic diversity are 35% more likely to outperform their industry medians for earnings before interest and tax.[2]

Action, fostering inclusivity is a strategic advantage for businesses and research demonstrates that “organizations that lead with inclusion are eight times more likely to have better business outcomes.”[3]

A U.S. Chamber of Commerce survey found that companies that form identity-based Employee Resource Groups (ERGs) can increase the number of diverse job applicants they receive, noting that 70% of Gen Z respondents were more likely to apply to a job with an ERG.[4]

According to a recent CNBC survey, 80% of workers prefer to work for a company that values DEI.[5]

Shareholders have a strong interest in understanding what DEI policies Arrow has in place and reviewing quantitative data demonstrating the effectiveness of those policies. Its failure to disclose this information raises material risk of reduced brand value and financial performance.

Arrow can improve its performance and reduce material risk posed by inadequate DEI policies and practices, while also playing an important role in furthering corporate racial equity, by disclosing its DEI policies and their success.

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

SUPPORTING STATEMENT: Proponents suggest the public report disclose existing DEI policies and practices, as well as relevant information, such as: