MCCA® 2008 Survey of Fortune 500 Minority General Counsel
Naran U. Burchinow, The Andersons, Inc.
Vice President, General Counsel, and Secretary
Patrick T. Ortiz, PNM Resources, Inc.
Senior Vice President and General Counsel Chief Compliance Officer and Secretary
Larry D, Thompson, PepsiCo Inc.
Senior Vice President, Government Affairs, General Counsel, and Secretary
(L to R) P. Robert Moya, Apollo Group; James Wooten Jr., Illinois Tool Works; and Gloria Santona, McDonald’s Corporation
In a dramatic reversal from a record-setting 2006, America’s Fortune 500 corporations saw an almost 20-percent decline in profits from $785 billion to $645 billion in 2007, leading some corporation watchers to conclude that the corporate profits “party” is over 1. Last year, MCCA was able to report an unprecedented period in the Fortune 500 history as the 2006 profit total added a walloping 29 percent increase to the profit figures of 2005. Total revenues were $9.9 trillion in 2006; Fortune attributed these stunning figures, in part, to “a perfect economic calm.”2
But in mid-2007, according to Fortune, the world changed for this exclusive corporate club when the financial markets finally woke up from a dream and experienced an abrupt return to reality. As a result, the Fortune 500 group experienced its first profits decline in five years.3 This roster of reliable performers did surpass the $10 trillion mark in revenues in 2007, but the combined profit loss of $140 billion left its mark on the national corporate psyche.4
In 2007, 39 general counsel of color were in charge of the legal departments of Fortune 500 companies. Minority general counsel today account for 7.8 percent of the Fortune 500; they made up 7.6 percent of the group last year. In a testament to their resilience and abilities in the face of gloom and doom, this unique group of talented lawyers was able to repeat its impressive 2006 numbers. This year, as last, the companies that benefit from the leadership and expertise of minority counsel earned more than $1 trillion in revenue—10 percent of the 2007 total.
Of these 39 companies, 27 rank among the Fortune 250. This year, 24 companies (as opposed to last year’s 20) had revenues between $5 and $20 billion, and 15 (16 in 2006) could claim revenues greater than $20 billion.
The most profitable companies in 2007 were in the energy, financial services, consumer staples, insurance, pharmaceuticals, communications, and information-technology sectors. Exxon Mobil, repeating its second place finish after Wal-Mart in the overall list, managed to top its record-setting $39.5 billion in profits in 2006 to become the most profitable company once again with more than $40 billion in 2007—the highest corporate profits in U.S. history. As crude oil escalates in price well past the $100-a-barrel benchmark and a gallon of gas continues to produce sticker shock, it is not surprising that energy companies continue to reap the largest financial rewards. But the credit disaster of 2007 took its toll elsewhere. According to Fortune, in 2006, 156 companies in the Fortune 500 had already reported lower profits than a year ago, and 43 lost money. And in 2007, the numbers got worse, with 183 companies seeing their profits fall and another 57 recording losses.5 Relatively few companies with minority counsel appear on the losses list; of those 57 companies named by Fortune, only five have minority general counsel (Sprint Nextel, KB Home, ArvinMeritor, Dole Food, and Circuit City Stores).
Where do the other 34 minority counsel-led companies fit among the most profitable Fortune 500 companies this year? As in the 2007 survey, this year’s minority counsel-led group has only one petroleum company (Chevron), and three other companies in the energy sector appear on this year’s list. Minority counsel retained a strong presence in the insurance/finance sectors (MetLife, TIAA-CREF, Safeco, Allstate, and KeyCorp). However, no other groups were dominant in this year’s list. Five food/consumer products companies had minority counsel, as did three computer/office equipment companies. This year’s list reflects a wider array of business sectors with minority counsel that cuts across the economic landscape. While energy and financial services once again have come out on top in the profits category, American corporations have used the talents of minority counsel in industries as diverse as motor vehicles, industrial/farm equipment, and specialty retailers. In short, the theme of diversity appears to be even more applicable to this year’s list.
For the past three years, including 2007, MCCA has reported on the strong international presence of most companies in the minority counsel-led group. And, as Fortune points out, globalization “is a fact of life for the Fortune 500.”6 In this year’s leaders in foreign revenue, minority counsel-led companies are represented across the spectrum. Although Exxon Mobil has the number-one slot in this category with the highest amount of foreign revenue for any American company at 72.2 percent, not far beyond are two companies with minority general counsel: Chevron with 65.7 percent, and Procter & Gamble with 58.2 percent. Also in this group are Dell with 38.9 percent foreign revenue, MetLife with 10.2 percent and Cardinal Health with 1.5 percent (representing the lowest intake of foreign revenue in the Fortune 500 group). Companies that are able to effectively market their products globally are again the biggest winners, highlighting the importance of diversity in the company as well as the marketplace. The five companies with the most successful international operations led by minority general counsel—Chevron, Procter & Gamble, Dell, MetLife, and Cardinal Health—ranked among the top 50 companies on the Fortune 500 list.7
Locations for the 39 minority counsel show no significant departure from last year’s survey. General counsel of color are based throughout the continental United States, with the highest concentrations in California (seven), Illinois (five), New York (five), and Ohio (four).
Twice as many departures (eight) were made from the 2008 Fortune 500 list by minority general counsel as there were in 2007. Leaving the ranks of Fortune 500 general counsel and replaced by white males were Kenneth C. Frazier (Merck), Ronald D. McCray (Kimberly-Clark), and Stacey J. Mobley (DuPont Company). Further, J. Alberto Gonzalez-Pita of Tyson Foods was replaced by a male who would not confirm his ethnicity for this survey. Lisa Iglesias resigned from Nordstrom, but no replacement has been named yet for her general counsel position.
MCCA’s 2008 survey shows two African Americans, two Hispanics, and one Asian Pacific American appointed to general counsel positions at Fortune 500 companies during the past year (see the following section for more information on these attorneys). Last year, Asian Pacific Americans garnered the biggest increase in representation. This year, 22 African Americans (56.4 percent of all minorities) serve as general counsel in the Fortune 500, the same number (57.8 percent) reported last year; 12 Asian Pacific Americans (30.7 percent) serve as general counsel, the same number reported in 2007 (31.5 percent); the number of Hispanic general counsel increased to 4 (10.3 percent this year; 7.9 percent last year); and the list also includes one Native American general counsel (2.6 percent this year).
A disconcerting disparity in gender representation continues to be reflected in the MCCA survey of Fortune 500 general counsel of color. Indeed, the only change this year is an increase of one for women general counsel. Thirty-one (79.4 percent) of the general counsel on the 2008 list are male, and just eight (20.5 percent) are female. The racial breakdown for men is 18 African Americans, 2 Hispanics, 10 Asian Pacific Americans, and one Native American. Of the eight minority women general counsel, four are African American, two are Asian Pacific American, and two are Hispanic.
Newcomers to the Fortune 500 Minority Counsel Group
With a roster of 38, last year’s MCCA survey found that almost all minority counsel came to their jobs from other corporate positions or law firms, or were promoted from in-house positions. This year’s survey reflects just five new faces in the minority counsel group of 39. This section provides a closer look at how each became part of this exclusive group.
At Procter & Gamble, Steven Jemison was promoted to general counsel from a deputy position, replacing a retiring white male general counsel with the household and personal products giant. Procter & Gamble, number 23 on the Fortune 500 list, boasts on its Web site that “2 billion times a day P&G products touch the lives of people around the world.”8 Prior to his work as deputy GC, Jemison had already served as P&G’s general counsel for the Central & Eastern Europe, Middle East, and Africa divisions.9 As noted earlier, P&G ranks as the sixth leading Fortune company in foreign revenues, and Jemison’s international experience highlights his qualifications for the general counsel slot at this hugely successful global enterprise.
At Fluor, one of world’s largest publicly owned engineering, procurement, construction, and maintenance service companies, Carlos M. Hernandez also replaced a white male going into retirement. Hernandez only joined Fluor in 2007, but he had established a track record as general counsel at three other companies.10 Also a global player, Fluor maintains a network of offices in more than 25 countries.
Elisa D. Garcia C., general counsel at Office Depot, is the third newcomer to succeed a white male GC (her predecessor had served in that role since 1998). Garcia has been an attorney for 22 years, the last seven as executive vice president, general counsel, and corporate secretary for Domino’s Pizza, Inc. Prior to joining Domino’s, she served as Latin American regional counsel for Philip Morris International and corporate counsel for GAF Corporation, one of the largest building products companies in North America.11 Office Depot boasts sales to customers in 43 countries throughout North America, Europe, Asia, and Latin America through wholly owned entities, majority-owned entities, or other ventures and alliances. Operating more than 35 separate Web sites through its international division, Office Depot declares, “We are continuously assessing opportunities to expand our geographic footprint around the globe.”12
Kim K.W. Rucker joined Avon, a company selling its products in more than 100 countries, in March 2008. Rucker had extensive corporate experience before coming to Avon, including at Energy Future Holdings, Corp. (formerly known as TXU Corp.) and Kimberly-Clark Corporation. Rucker earned her J.D. from Harvard Law School and a master’s degree in public policy from the John F. Kennedy School of Government at Harvard University.13
Paul W. Chung, general counsel of Targa Resources, is the only newcomer to counsel a company with no international operations. Similar to the others profiled in this section, Chung comes to the position with in-depth corporate legal experience from work at Coral, Shell Trading North America Company (a subsidiary of Shell), and Coral Energy, LLC. In these positions, he was responsible for all legal and regulatory affairs. He also served as vice president and assistant general counsel of Tejas from 1996 to 1999. Prior to 1996, Chung held a number of legal positions with different organizations, including Vinson & Elkins L.L.P.14
With a larger 2008 increase than their colleagues on the 500 list, the number of minority general counsel on the Fortune 1000 list escalated by five. In 2007, 21 general counsel of color were in this group; this year, there are 26. Five companies that had minority general counsel in 2007 have dropped off the list, and nine new companies have arrived. Jim Kaput (Service Master) and Jackie Mahi Erickson (Hawaiian Electric Industries) were replaced by white males. Asian Pacific American Justin Choi had already left Andrew when a white male was named to replace him. At AIMCO, Miles Cortez was succeeded by a white female. And, as reported in last year’s survey, Wendy Shiba also departed the 501-1000 ranks when she moved from PolyOne to the Fortune 500-ranked KB Home.
The nine newcomers to the list include one African American male, one Hispanic male, one African American woman, and six Asian Pacific American males. They are Oliver C. Mitchell Jr. of Carpenter Technology, P. Robert Moya of Apollo Group, Joia Johnson of HanesBrands, Michael Kornickzy of Graham Packaging, Eric Chen of AECOM Technology, Steven Kyono of Hewitt Associates, Nicholas Singh of Anally Capital Management, Naran Burchinow of Andersons, and Patrick Reutens of Atmel.
The 2008 Fortune 501–1000 group is composed of the following racial groups: 11 are African American (42.3 percent), 5 are Hispanic (19.2 percent), and 10 are Asian Pacific American (38.5 percent). By comparison, last year’s survey had representation by nine African Americans (42.7 percent), seven Asian Pacific Americans (33.4 percent), and five Hispanics (23.9 percent).
A breakdown by gender finds 22 minority males (84.6 percent) and 4 minority females (15.4 percent) serving as general counsel among Fortune 1000 companies. Of the men, nine are African American, three are Hispanic, and ten are Asian Pacific American. Of the women, two are African American and two are Hispanic.
As in 2007, utilities and health care-related enterprises made the strongest showings in the industry category. Also, once again, California topped the list as the work base for the largest concentration of minority general counsel, with seven companies.
In a year that heralded a downward turn for the most successful American corporations, minority general counsel turned in a rock-solid performance by repeating their revenue and profit figures from 2006—the most profitable year in Fortune 500 history—and increasing their overall representation. They maintained their positions in companies with high global revenues, even adding four more in that category. There is still a need for a more equitable representation of women among minority general counsel of Fortune 1000 companies, as well as a more even distribution of ethnic groups throughout. But in a time of uncertainty for top American corporations, it cannot be denied that this exclusive group of American lawyers makes a compelling case for diversity. DB
- Geoff Colvin, “Why the Party’s Over,” Fortune, May 5, 2008.
- Shawn Tully, “A Profit Gusher of Epic Proportions,” Fortune, April 15, 2007.
- Colvin, supra note 1.
- Chevron Corporation is number 3, Cardinal Health, Inc., is number 19, Procter & Gamble is number 23, Dell is number 34, and MetLife is number 43.
- See www.uk.pg.com/downloads/news/june2205_P&GManagementChanges.pdf.
- See www.reuters.com/finance/stocks/companyOfficers?symbol=PG.N&viewId=bio.
- See www.fluor.com/about/eb_c_hernandez.asp.
- See www.whyofficedepot.com/q2_2007_news/half_year.html.
- See Office Depot, “Company Facts,” available at www.officedepot.com (from home page, select “About Us,” then “Company Facts.”
- See www.avoncompany.com/investor/seniormanagement/rucker.html?zoom_highlightsub=rucker.
- See http://ir.targaresources.com/management.cfm.
MCCA thanks freelance writer Rachel Ray for all of her work in the preparation of the article, analysis of the survey results, and related research; Vicki Richardson, Esq., for completing the extensive and time-consuming survey of 1,000 companies to compile data on race/ethnicity and gender of the general counsel; and Patrick Folliard for authoring the profiles of the three minority general counsel featured in this article.
From the September/October 2008 issue of Diversity & The Bar®