Workforce Diversity Report

Resolution Text

RESOLVED: Shareholders request that Choice Hotels International (Choice Hotels) provide a report to shareholders, by year-end 2020, at reasonable cost and omitting confidential information, including:

1. A breakdown of its workforce by race and gender, preferably according to the Equal Employment Opportunity Commission (EEOC) defined job categories (the EEO-1 Report); and

2. A description of policies and programs implemented to increase the number of minority and female employees in job categories where they are underutilized.

Supporting Statement: Companies with inclusive workplaces are better positioned to recruit the most talented employees from the broadest possible labor pool. Numerous studies have found that employee diversity provides a competitive advantage by encouraging varied, valuable perspectives, creativity and innovation, and increased productivity and morale. Conversely, charges of discrimination can result in costly litigation or reputational damage. Since 2000, Fortune 500 companies paid greater than $1 billion in penalties in cases alleging discrimination based on race or gender, with several companies paying greater than $100 million.1

In addition, the #MeToo movement has coincided with a 13.6 percent increase in sexual harassment and retaliation charges filed with the EEOC over the year ending September 30, 2018, with greater than 7,600 allegations of workplace discrimination.2 In a lawsuit filed September 30, 2019, the EEOC sued several hotel operators for sexual harassment, including Choice Hotels.3

The accommodation and food services sector, which includes Choice Hotels, is characterized by persistent underrepresentation of women and people of color in senior positions. According to 2017 aggregate EEO-1 data for accommodation and food service companies (the most recent data available), women account for 34 percent of executive and senior level officials and managers despite representing 52 percent of total employees. Similarly, people of color comprise 23 percent of these management positions versus 55 percent of total employees.

We agree with Choice Hotels’ strong statement on the benefits of an inclusive workplace, “…diversity of thought and perspective contribute to a high performance culture and long-term, sustainable success.”4 We also commend its recognition by Forbes as among The Best Employers for Diversity (#130, January 2019).

We believe transparency and public accountability are essential components of leadership on diversity and inclusion. Many consumer facing companies report EEO-1 data including Chipotle, Gap, Marriott, Target, and Walmart.

Disclosure of EEO-1 data would allow shareholders to benchmark and evaluate the effectiveness of Choice Hotel’s diversity and inclusion initiatives. In addition, better disclosure would encourage management and the Board to more fully integrate diversity into Choice Hotel’s culture and practices, strengthening its reputation and accountability to shareholders.

Federal law already requires Choice Hotels to submit annually an EEO-1 Report to the EEOC. Hence, this request for greater transparency does not require additional corporate resources for data collection or analysis.

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1 https://www.goodjobsfirst.org/sites/default/files/docs/pdfs/BigBusinessBias.pdf
2 https://www.eeoc.gov/eeoc/newsroom/release/4-10-19.cfm
3 https://www.eeoc.gov/eeoc/newsroom/release/10-15-19e.cfm
4 https://www.choicehotels.com/about/diversity

Lead Filer

Jared Fernandez
Boston Trust Walden