In relocating its headquarters to Texas, Tesla could potentially be evading new legislation that requires publicly-held companies headquartered in California to diversify members of its board of directors.
However, one of the electric vehicle (EV) manufacturer’s investors is taking the company to task about providing more extensive diversity, equity, and inclusion (DEI) data.
“We want companies to provide us with standardized DEI data to aid us in accurately and fairly evaluating and assessing a company’s performance,” said Kimberly Stokes, corporate engagement strategist with Calvert.
Tesla CEO Elon Musk announced he would be locating Tesla’s headquarters to Austin, Texas from the Bay area during an annual shareholders meeting, according to the New York Times.
Tesla disclosed in its December 2020 DEI analysis that its leadership is 83% male and 59% white but the report did not indicate whether the statistics include its board of directors and did not include an EEO-1 report.
“What we ask companies to provide is a link or a table that depicts their full EEO-1 report,” Stokes said. “The EEO-1 report breaks down into 10 different job categories and provides a much more granular look at a company's workforce composition. In addition to that, each of those job categories are broken down by both gender and within gender by ethnicity. So, it does provide significantly more detail than what Tesla provided in their 2020 DEI report.”
An EEO-1 report discloses a company’s workforce by race and gender and is collected by the United States Equal Employment Opportunity Commission annually.
“There is a possibility that sometime in the future this information will be mandated by the SEC and would have to be provided in audited financial statements,” Stokes said. “So, I think it's better for companies to be proactive and include more information around diversity, equity, and inclusion, as well as other human capital management metrics ahead of any potential regulatory decisions.”
Assembly Bill (AB) 979 requires publicly held companies headquartered in California to include at least one director from an underrepresented community by Dec. 31, 2021, two directors from underrepresented communities for corporations with more than four board members and a minimum of three directors for corporations with more than nine board members by 2022.
Gov. Gavin Newsom signed AB 979 into law in November 2020 however the state of Texas has no such law on its books.
“Our concern with Tesla is a concern with workers whatever state they are in or whatever jurisdiction,” Stokes added.