Starbucks’s Mellody Hobson, the Solely Black Chairwoman in S&P 500, Says ‘Civil Rights 3.0’ Is Brewing
Mellody Hobson has received company promises over the years to increase workplace diversity. Starbucks corps
SBUX 0.46%
new chairman believes that this time is different.
As the co-CEO and president of minority wealth management firm Ariel Investments LLC, Ms. Hobson is one of the country’s best-known black investors. As of Wednesday, she will also be the only black chairman of an S&P 500 company when she takes on that role at Starbucks.
She is one of the few black women to have recently assumed leadership positions in the highest echelons of American companies that have few black bosses. Another is Rosalind Brewer, a longtime friend of Ms. Hobson, who has left her role as Starbucks executive director and will become chief executive officer of Walgreens Boots Alliance Inc. on Monday.
Ms. Hobson says about 20 other women of color in her orbit were recently elected to company boards. Corporations are facing increased pressure from investors and regulators to diversify boardrooms, and the death of George Floyd in police custody, the murder of Breonna Taylor, and other high-profile cases involving black Americans and the police have prompted many to do so to redouble their efforts to help black workers advance. “I’m joking we have to be headhunters with Ariel in our spare time,” she says.
Ms. Hobson, 51, rose from intern to head Chicago-based Ariel, which manages approximately $ 13 billion in assets. She joined the Starbucks board of directors 16 years ago and counts former CEO and Chairman Emeritus Howard Schultz as a friend and mentor. She recently spoke by phone to the Wall Street Journal from the Southern California home she shares with her husband, filmmaker George Lucas.
WSJ: What are your goals as chairperson?
Mrs. Hobson: My job is to work with [CEO]
Kevin Johnson is set to help the organization continue to reach new heights. I am the band leader. I am a person of color and that adds a fascinating dimension to our story. I think this will be really powerful for our people.
WSJ: What about you?
Mrs. Hobson: I have this friend who says being the first or only black woman is a proud and lonely walk. I’m excited, but I understand how important it is. You have to do a good job so that there are more options for others.
WSJ: Starbucks announced new management diversity goals last year. Where is that
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“I have this friend who says being the first or only black is a proud and lonely walk. I’m excited, but I understand how important it is. ‘
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Mrs. Hobson: It’s not time for a winning lap but I know we have a plan. We blame people. I really give Kevin a lot of credit for combining achievement with diversity to pay for it. There the rubber meets the road.
WSJ: Before, what were the hurdles to making this progress?
Mrs. Hobson: We have had this conversation in our boardroom for many, many years. Now the work is very extensive and there is full alignment.
We have the worst problem – where to pick up your good people. We just had that [Rosalind Brewer]. Of course, I didn’t want to lose Roz at Starbucks, but the result is pretty good for her and for black women.
WSJ: Ariel created an investment line to help companies fund minority-owned service providers. How diverse is Starbucks’ own supply chain?
Mrs. Hobson: Business diversity encompasses all areas of corporate spending. Minority companies currently account for around 2% of Fortune 500 spending. Starbucks has been focusing on this for a while. In the past year, we spent more than $ 600 million with various suppliers, which is about 8% of our spending.
WSJ: You said that in the USA we are in a phase of “Civil Rights 3.0”. What signs of real change do you see?
Mrs. Hobson: The wider society keeps scoring. There are consequences if these commitments are not met. It will be very difficult to be a Fortune 500 company without a diverse person on your board of directors.
Ms. Hobson in 2014. “It’s going to be very difficult to be a Fortune 500 company without a diverse person on your board of directors,” she says.
Photo:
Armando L. Sanchez / Chicago Tri / Zuma Press
WSJ: What rating would you give the US for board diversity?
Mrs. Hobson: B minus. White men make up 30% of the US population and 70% of the boardrooms. The reason it isn’t in the “C” category is because there has been a profound change in the last year or so. I know how many calls I’ve got and how many people I’ve recommended.
WSJ: Starbucks has lost other top executives lately. What does this mean for the Executive Bank?
Mrs. Hobson: We have retired people. Covid also had people looking for who they wanted to be. Still, I think the leadership team is strong. This is reflected in the success we’ve seen in business, especially at a very challenging time.
WSJ: Starbucks is committed to making its US baristas an average wage of $ 15 an hour. What do you think of the $ 15 minimum wage debate, including in terms of shareholder returns?
Mrs. Hobson: Sometimes I think the minimum wage has simplified the problem too much. The math for the living wage may be different from the math for the minimum wage. $ 15 an hour in San Francisco is different from $ 15 an hour in Selma. At Starbucks, we have always believed that dealing very well with our partners ultimately affects our business results. Happier workers are workers who make happier customers.
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WSJ: How has the pandemic affected you?
Mrs. Hobson: I told our team I want to fling out of this time. I don’t want to limp out. We did a really good job. And I’m a tough grader.
WSJ: Is there anything you especially want to come back to once the pandemic restrictions are lifted?
Mrs. Hobson: The loneliness didn’t bother me. People are really surprised because they consider me an extrovert. I am very happy in a room that works alone, which no one would ever expect.
WSJ: Her favorite coffee is just Starbucks black. Why?
Mrs. Hobson: I didn’t drink coffee originally. I drank tea. And then when I had my kid, I was obsessed with coffee. It never stopped, but I just liked it plainly. The first thing I do when I wake up is exercise. But I get my caffeine in before I get on the treadmill.
Write to Heather Haddon at [email protected]
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