Starbucks has appointed CFO Mellody Hobson to head its board of directors as president, making her one of the most prominent African-American directors of American companies.
Starbucks Corp. has appointed CFO Mellody Hobson to head its board as chairman, making her one of the foremost black directors in U.S. companies.
Hobson, co-Managing Director of Ariel Investments LLC, replaces Myron Ullman, who is retiring. The transition will take place in March. Ullman was named Hobson’s chairman and vice-chairman in 2018 when longtime Starbucks frontman Howard Schultz left the coffee chain.
“For nearly two decades, I have watched the company continue to elevate and transform its business – adapting to various market environments and changing consumer trends,” Hobson said in a statement. “I look forward to working with the board of directors and the talented management team to accelerate our strategy, support our valued partners and continue to create meaningful value for all of our stakeholders.”
Hobson’s promotion comes at a time when the top ranks of America’s biggest companies are still largely dominated by white males. The representation of women and people of color in American businesses has come under increasing scrutiny this year, especially in the wake of calls for social justice after George Floyd’s death in May. As pressure mounts for companies to improve the diversity of their executive ranks, a number have moved in recent months to add black women to their boards – sometimes for the first time.
According to Bloomberg data, only 15 companies have a female president among S&P 500 companies whose director is not also the company’s CEO. None of these women are black. Ursula Burns predated Hobson as Pioneering President for Black Women when she headed the board of directors of Xerox Corp. from 2010 to 2017.
In addition to her seat on the Starbucks board and a seat at JPMorgan Chase & Co., Hobson, 51, was previously president of DreamWorks Animation. At Ariel, Hobson oversees management, strategic planning and growth in areas other than research and portfolio management. Earlier this year, Princeton University announced it would name a residential college for the former Hobson, recognizing her donation for a project to be built on a site that once honored Woodrow Wilson.
Dambisa Moyo, economist and author, said Hobson was “the best of our generation”. Moyo praised Hobson for being an advocate for financial literacy, and the two women appeared together at the Economic Club of Chicago.
Hobson is also a member of the board of directors of Bloomberg Philanthropies, the philanthropic organization of Michael Bloomberg, founder and majority owner of Bloomberg LP, owner of Bloomberg News.
Starbucks shares rose 0.5% to $ 101.74 at 10:22 a.m. in New York City. The title gained around 16% in 2020.
The Seattle-based coffee chain recently focused on expanding diversity within its ranks and improving race relations. The company said in October it would tie executive pay to diversity goals, joining a growing number of companies this year putting financial incentives behind the efforts.
The coffee chain has at times had a strained relationship with the black community. In 2018, two black men were arrested at a Starbucks in Philadelphia for sitting in the restaurant without buying coffee, sparking protests, and prompting the company to institute ‘unconscious bias’ training for store managers . More recently, Starbucks faced a backlash on social media for banning employees from wearing Black Lives Matter clothing. The company then created its own shirts to support the movement.
Earlier this year, Starbucks joined the Board Diversity Action Alliance, which advocates for representation on boards of directors of racial and ethnic corporations. As of September, Starbucks’ board of directors was made up of 46% people of color and 39% women, the company said.
The coffee chain’s most recent publicly disclosed racial data for all U.S. employees shows black people are still under-represented in the top ranks, with 3 of 53 senior executives and around 2% of managers identified as black or Afro- Americans in the 2018 file with the Equal Employment Opportunity Commission.
(Adds stock trading and comments from Dambisa Moyo.)
–With help from Jeff Green, Matt Townsend and Annie Massa.