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Facebook ‘mandate’ adds fuel to diversity movement in law

Facebook has followed HP in announcing a diversity target for outside law firms working on all its matters.

user iconTom Lodewyke 04 April 2017 Corporate Counsel
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Facebook announced recently that women and ethnic minorities must make up at least 33 per cent of external legal teams working on its matters. The policy came into effect on Saturday.

“Firms typically do what their clients want,” Facebook general counsel Colin Stretch told The New York Times.

“And we want to see them win our cases and create opportunities for women and people of colour. We think the firms are ready – our articulation gives not just permission, but a mandate.”


Beyond simply improving the diversity of legal teams, Facebook now requires the firms it retains to “actively identify and create clear and measurable leadership opportunities for women and minorities”.

Facebook’s policy follows the announcement from HP general counsel Kim Rivera in February that the tech company will withhold up to 10 per cent of fees invoiced by firms that fall short of its diversity requirements.

But the push for greater diversity is just as relevant to Australian companies as their US counterparts. KPMG Enterprise’s report, Secrets to success of the ASX 300+, released on Monday, identified diversity as a top priority for Australian companies.

“Gender diversity (and also diversity of age, culture, experience and other factors) can help fuel more robust and innovative discussion at the board table,” the report said.

“This can lead to stronger governance, improved critical decision-making and a more robust organisational culture.”

The report included data that reflected the notable business benefits of diversity.

“Companies with females on their boards have grown their revenue at a higher rate than those without, where companies with female CEOs in the group delivered a 9 per cent increase in revenue in 2016, compared to the remaining group-wide average of 0.5 per cent,” KPMG said.

“The Australian Institute of Company Directors is calling for all boards in the ASX 200 to ensure that 30 per cent of their directors are female by 2018.”

The average female representation on boards sits at 23.4 per cent in the ASX 200, and only 9 per cent in the ASX 300+, according to the report.

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