FOCUS ON Retail Companies...COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTS*RESERVED! 3! and!learn!fromone!another.!Ahold!is!replicating!this!model!within!the!ALANA/Mosaic

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Retail Companies &

Diversity & Inclusion Benchmarking:

FOCUS ON

JUNE 2016

COPYRIGHT © 2016 BY DIVERSITY BEST PRACTICES. ALL RIGHTS RESERVED

The field of diversity and inclusion is constantly growing because the global workplace is still striving toward equality across demographics. Each organization’s journey is helped by studying the best practices of successful D&I practitioners. The following report benchmarks the efforts of seven retail companies – Ahold, Aldi, Costco, Carrefour, Metro AG, Tesco and Walmart. PART I: Methodology for D&I Benchmarking of Retail Companies Aspects of assessing diversity and inclusion progression in the corporate sphere include CEO commitment, management accountability or how senior leadership compensation is tied to diversity, establishment of D&I councils and the office of diversity within the company. Employee or Business Resource Groups (ERGs/BRGs) that focus on identities such as LGBT, Veterans or Women are also how some businesses drive diversity and inclusion. Within these ERGs there are D&I strategies, succession planning and global goals. While many companies have extensive diversity and inclusion strategies, not all of the specific details of operation are available for public consumption. This section includes the shared diversity and inclusion best practices of seven retail companies. Ahold (Target Company) “We already have a great workforce and will continue to develop the skills and capabilities of the group to help us achieve our growth ambitions. We will also continue to nurture diversity and the transfer of skills and knowledge across the business.”

-‐‑ Dick Boer, CEO “As a global retail leader, Ahold acknowledges that Diversity & Inclusion is fundamental to its business success and growth. In principle and in practice, Ahold promotes an inclusive and respectful work environment which gets better every day for our associates, customers, communities and shareholders. “

-‐ Subarna Malakar, Global Vice President, Diversity & Inclusion "Diversity is an important part of our business and we regularly work with women and minority-‐‑owned businesses to develop supplier opportunities for the mutual success of both organizations."

-‐ Jeff Martin, Former Executive Vice President, Merchandising and Marketing (2012) As evident from the quotes above, senior leaders have taken an interest in embedding diversity and inclusion with the Ahold business. This prolonged interest has manifested itself through management development, recruiting practices, engagement strategies and partnerships. Ahold strongly supports developing women and having diverse suppliers. Women Women Adding Value (WAV) BRG implemented “Mentoring Circles” concept, where small groups of associates gather on a monthly basis to discuss career progression, give advice

COPYRIGHT © 2016 BY DIVERSITY BEST PRACTICES. ALL RIGHTS RESERVED 3

and learn from one another. Ahold is replicating this model within the ALANA/Mosaic multicultural BRG. Ahold has a partnership with Network of Executive Women. Ahold connects regional groups directly with divisional WAV BRGs providing leadership development and networking opportunities. Ahold sends numerous leaders to the national conferences each year. On Women’s Day Ahold partnered with Leading Executives Advancing Diversity (LEAD). CEO Dick Boer and CHRO Abbe Luersman kicked off with their story on why it is crucial for Ahold to focus now, more than ever, on diversity within the organization. The panel discussion with Hanneke Faber (COO, Ahold), Rizwan Malik (Sr. Finance Director, Kellogg), Carrielle Somers (Marketing Operations Metro) and Elaine Parr (Partner Advisory, EY) held a lively discussion on how to unlock potential and think in new boxes in the workplace. Wouter Kolk (COO, Ahold Netherlands) wrapped up the meeting with his pledge to parity and to make a difference. Ahold also launched a new campaign, “Women Who Rock and Men Advocating Real Change” (MARC), enabling associates to recognize colleagues who are committed to driving change within our organizations, advocating and actively practicing inclusion. Supplier Diversity Ahold holds an annual Supplier Diversity Fair to help strengthen diverse businesses. For over thirteen years the fair has helped businesses that are minority-‐‑, woman-‐‑ and LGBT-‐‑owned have a chance at a spot on the shelves of the 770 grocery stores under Ahold. Ahold Developing Professionals In 2015, Ahold Developing Professions (ADeP) introduced the Own Brands Best Idea Contest. The contest required that members team up in groups of 3–5 to develop what could potentially be the next innovative product under Ahold’s private label umbrella. Groups submitted full business plans, outlining topics from supply chain to marketing opportunities. Five teams were chosen out of the 20 participating teams to present their idea to the Own Brands executives. Out of the finalists, the winning team was selected and had their product developed and sold in our stores. As a result, six different varieties of the winning product have been produced and have contributed more than $10,000 per week in incremental sales for the produce department and an estimated 3,300 incremental units weekly. The event also increased associate engagement by allowing members the opportunity to collaborate with associates in other areas of the business. Additionally, each member of the winning team was given an extra week of paid vacation for their contribution to the company. ADeP increased employee engagement by encouraging creativity and diversity of thought.


* The following two programs are not diversity focused, yet are focused on the advancement of employees with Ahold. Employees of all demographics are encouraged to take the path of career development. Ahold Leadership Academy The Ahold Leadership Academy is the cornerstone program for executive development. The objective of the program is to develop:

• A common Ahold approach to leadership, both as individuals and as a team • Strategic thinking and leadership capabilities to collectively shape Ahold’s future • A common vision, common culture and an aligned approach to execute the strategy

The program is organized once each year for a group of 40 senior managers from across Ahold, who are nominated by the Executive Boards of their local companies. The six-‐‑day program offers a combination of leadership-‐‑ and strategy-‐‑themed sessions. The program will help participants to reflect on what they bring to leadership, individually and as a team. It includes an individual assessment to identify leadership strengths, limitations, and development opportunities. In the area of strategy, the program focuses on opportunities for innovation, developing successful retail strategies, and executing these strategies in our businesses. Ahold Retail Academy The Ahold Retail Academy is a leadership program focusing on the “art of retailing” within Ahold. The program objectives are:

• Learn about Ahold’s strategy and strategic initiatives • Learn the key retailing processes and how they integrate into an overall retailing

strategy • Learn the latest retail industry trends and external best practices • Build an internal network through interaction with colleagues and senior executives

It brings together a group of 40 mid-‐‑level managers from across Ahold, who are selected by their Executive Board to participate in this intensive five-‐‑day course of study. The program consists of lectures, case study discussions, workshops, and simulations. The faculty is made up of university professors, business consultants, and several of Ahold’s senior executives. Participants have the opportunity to share their knowledge and experiences with their colleagues from around the company, and to interact with various business leaders. The Ahold Retail Academy is organized once a year, alternately in the United States and in the Netherlands. The program is designed and delivered in cooperation with Cornell University (USA). For additional information on Ahold’s diversity and inclusion practice:


• Watch this video. • Read this article in Progressive Grocer 2015.

Aldi The core purpose of Aldi is to “‘provide value and quality to our customers by being fair and efficient in all we do.’ A case study on Aldi’s competitive advantage through efficiency can be found here. Women At Aldi 48% of employees in the UK are female. 28% of UK Directors are female, which is considerably higher than the industry average. Through extensive research it appears Aldi does not publically disclose targeted development, mentoring, training and recruiting for specific demographics. However, there is 50+ week training for district managers. District Manager Training Program There is the opportunity to learn about Corporate Buying, IT, and Administration departments at an ALDI seminar hosted at our corporate office. Significant chunks of time are dedicated to real estate and purchasing, warehouse training, in-‐‑store training, acting as assistance store manager, acting as store manager and district manager training. Completing the District Manager training program is just the first step in the ALDI learning process. The training and development continues throughout employees’ careers with a series of internal and external training seminars. Aldi is committed to the continued development of District Managers and provide specific training on effective hiring techniques, legal issues in retail, general leadership development, personal organization, diversity and other relevant topics. The ALDI International Expatriate Program The ALDI International Expatriate program offers experienced District Managers the chance to experience the business in an entirely different culture. For two years, participants are immersed in one of the many incredible locations worldwide. Through this, participants gain the perspective and insight necessary to take their career even further within the organization. Carrefour “A positive attitude towards people with disabilities needs to be integrated into organizational culture. Managers must believe in the contribution that people with disabilities can make to their business.”

-‐‑ Roberta Rivaldo de Almeida Sousa, Attraction and Retention Director CEO Georges Plassar supports Diversity through signing the international agreement to promote Social dialogue and Diversity.


In regards to governance, the Diversity Committee meets quarterly to validate and ensure implementation of the Diversity Policy. Beyond the main principles of its policy, in all countries Carrefour carries out specific activities in accordance with local situations to raise awareness among its employees and customers of the fight against discrimination:

-‐ Training and “ambassadors for diversity” in Brazilian stores -‐ Equal treatment and combating social exclusion in Spain -‐ An internal campaign against discrimination in Argentina -‐ In Poland, Carrefour has also taken a step forwards in the recognition of its equal

opportunities commitments by signing in October 2013 the “Diversity Charter” Women Carrefour showed its commitment in 2013 by signing the “UN Women’s Empowerment Principles”, drawn up by UN Women and consisting of seven action principles to encourage equality in the workplace. Measures are continually implemented in every country: awareness-‐‑raising in stores, training and coaching, adjustments to working hours, etc. In Poland, women hold over 50% of managerial positions. In Argentina, the recruitment of young women as managers was a priority of the “Jovenes Profesionales” program, which aims to integrate young, high-‐‑potential graduates. Youth Employment Every year in Brazil, 1,400 young people start their very first job at Carrefour within the framework of the “Jovem Aprendiz” program. Carrefour also nurtures partnerships with schools and universities, such as in Romania, with training courses in the food professions. In France in 2013, Carrefour recruited 500 young people on the “future contracts” (to rise to 1,000 by the end of 2014) and 5,000 on work/study contracts (to rise to 15,000 by the end of 2015). Carrefour France also provides access to employment specifically for young people from disadvantaged areas, as can be witnessed by its long-‐‑term investment alongside the “Nos Quartiers ont des talents” (Talent in our neighborhoods) association. Disability France the “Mission Handicap” disability agreement, instigated in 1999 and renewed in 2011, is built around three key commitments: recruiting employees with disabilities, integrating them into the workforce under the best conditions possible and helping them maintain their employment, in particular by adapting workstations. In Brazil, Carrefour has also deployed a specific program, “Eu pratico a inclusão”, which notably led to twice as many disabled people being recruited in 2013 in comparison with 2012, complemented by the “Meu amigo e especial” program to encourage internal integration.


In Poland, Carrefour encourages the use of assisted contracts in partnership with the Ekon association, having led in this way to the recruitment of 150 mentally disabled people. There is a more complete story by the International Labor Organization here. Costco “We sell quality stuff at the best possible price. If you treat consumers with respect and treat employees with respect, good things are going to happen to you.”

-‐‑ Craig Jelinek , CEO As reported by Bloomberg, Costco has no public relations staff therefore extensive detail on the diversity programs is not widely publicized. However, an article on ERE Media reported that Jelinek makes sure the company provides full health benefits for same-‐‑sex couples and supports all diversity initiatives. Women The Costco Journeys Program is committed to fostering mentoring and networking opportunities for women at Costco. Through a partnership with Dale Carnegie Training, Costco offers a 90-‐‑minute interactive workshop to prepare women to develop an effective professional mentoring relationship. Pipeline Costco has joined forces with the University of Washington and Seattle University to create scholarships for underrepresented students. The goal is to fill the financial gap and offer access for many deserving students to attend these universities. The Costco Scholarship Fund provides financial assistance to highly qualified underrepresented minority students who wish to attend Seattle University or the University of Washington. Metro AG “The further development of METRO GROUP would not be possible without a comprehensive transformation of our corporate culture. From the beginning, there was no doubt that such a process requires the active commitment of executives and employees alike. I’m all the more pleased that we’ve already advanced considerably along our path and that the cultural change is being carried by the staff. We’ve become a more open and courageous company. And we’re able to respond to changes faster.”

-‐‑ Heiko Hutmacher, Chief Human Resources Officer Metro AG’s is a part of the UN Global Compact and European Supply Chain Initiative. It launched the program Inclusion and Diversity with the aim of advancing general cultural change within the company. Workshops and an e-‐‑learning module were designed to sensitize employees in all countries and at all hierarchical levels to the issue of inclusion and diversity. All diversity initiatives use the guiding theme “inclusion starts with a smile.” Metro AG has been represented on the board of directors of Charta der Vielfalt e. V. (Charter of Diversity) since 2013.


Metro AG’s global initiative Care & Share aligns and puts into practice social and environmental activities of employees and customers alike. Numerous social projects have been carried out at local level in 26 countries. Among those Care & Share programs, professional food donations and cooperation with food banks Metro AG shows humanitarian support for refugees. Metro AG wants to support employees in all phases of life – and that includes the care of loved ones. In cooperation with the German careers’ organization Deutscher Pflegering, Metro AG began offering its employees two service models in March 2014: The online care portal offers information about the topic and includes an index with more than 25,000 care providers. The care hotline allows employees to discuss their questions directly with caregiving experts. Women The Women in Trade (WiT) employee network now has about 130 members. The network intends to help raise the share of women in management positions over the long term, to promote internal and external dialogue and to create better working conditions for women in the company. The network is internationally active and is aimed at colleagues in all countries. Disability The proportion of employees with a recognized severe disability or equivalent persons in Metro AG is above the legal minimum requirement of 5 per cent. The company also works to support the long-‐‑term provision of vocational training positions for people with disabilities. One example is a sales line promoting the project “Integrated Training with Vocational Education Centres” which was organized by the German Association of Vocational Education Centres. This program makes it possible for young people with disabilities to receive occupational training. The sales line has also directed its attention to young people who have been unable to find a vocational training position or are not fully prepared to assume such a position, who have learning difficulties or are socially disadvantaged. They are given the opportunity to take part in the company’s initial qualification program Einstiegsqualifizierung, EQ. This is a national occupational orientation program in Germany that is part of the National Pact for Career Training and Skilled Manpower Development. The young people become acquainted with working life over a period of six to twelve months. The initial qualification program serves to open doors to a training position or job. During the reporting period, more than 70 young people took part in the program. About 50 percent began an apprenticeship position after having completed the program. LGBT The employee network METRO PRIDE set itself the objective of raising awareness of the topic of sexual orientation and identity.


Tesco ‘Difference can be our strength because talent and diversity are two sides of the same coin. To focus on one while ignoring the other is like trying to run a store with no customers – it just won’t work’.

-‐‑ Company belief reported in a recent case study CEO, David Lewis is leading his company with the mantra “everyone is welcome at Tesco.” This is evident through the current ERGs: Out at Tesco (lesbian, gay, bisexual and transgender and intersex) Network, Tesco Asian Network, ABC (African, Black & Caribbean) Network, Women in Business Network, The Armed Forces Network and the Tesco Christian Fellowship. In regards to gender equality, women make up 57 percent of all employees, 32 percent of senior managers (directors and managers), 24 percent of senior managers (directors) and 27 percent of Board of Directors. Tesco also engages in programs that support people with disability and dealing with long term unemployment. Disability Tesco is a member of Business Disability Forum, which provides support and expertise in building disability-‐‑smart organizations to improve business performance by increasing confidence, accessibility, productivity and profitability. Tesco has signed up to the UK Government’s ‘two ticks’ initiative, which means that Tesco is positive about employing disabled applicants, raising disability awareness and making every reasonable effort to support disabled colleagues to stay in employment. In the UK, Tesco has established a strong relationship with Remploy and Shaw Trust, who help find skilled and dedicated people with disabilities to work for Tesco. There is also a work experience program for disabled children through the British mobility charity, Whizz-‐‑Kidz. Rolling out a pre-‐‑employment program to over 100 stores across the UK to support young people facing barriers to work, due to disability and health conditions, into employment. The program is in partnership with Remploy who will provide confidence and self-‐‑esteem training prior to young people completing a 2-‐‑week placement in one of the stores.

Long Term Unemployment Regeneration Partnership stores, Tesco guarantees a significant proportion of jobs for long-‐‑term unemployed people. This is in addition to the work Tesco does to attract applications through Jobcentre Plus to all UK stores. Walmart "I’m proud of the intentional work we’ve done over the past decade to broaden our talent pool and diversify our leadership ranks. Now more than ever, Walmart reflects our diverse customer base, and that makes us a better company. We’ve also demonstrated that we’re willing to speak out on behalf of diversity and inclusion, particularly when we need to support our company’s core value of respect for the individual.”


-‐‑ Doug McMillon CEO Statement, “To me, diversity is like the ingredients to a recipe. To make a good dish, you need to have different ingredients that work together. At Walmart, we want people who come from different places, think in different ways, and look and act differently from one another. Inclusion is how we mix those ingredients together – it’s the environment that we create, the real culture of the company.”

-‐‑ Sharon Orloop, Global Chief Diversity Officer & SVO Corporate People

Walmart has a very extensive diversity and inclusion strategy which can reviewed here. Below the efforts are summarized. The Diversity Goals Program is the most significant means by which Walmart has accelerated opportunity for women and people of color associates in the U.S. The program encompasses:

• Field management placement goals of women and people of color associates • Good Faith Efforts to drive ownership of diversity and inclusion • Five-‐‑year aspirational goals to stretch our management placement goals for store and club manager positions • Active coaching reviews centered on discrimination and harassment • Customized diversity and inclusion plans for senior leaders

Women The Global Women’s Development Series (GWDS) is a series of events that was founded on the following principles:

• Champion opportunities for women to grow and thrive across the globe • Be a catalyst for development of women globally • Provide accessibility and a platform to support women through two live events, supported extensively by technology, we provided development opportunities to Walmart associates around the world and local nonprofit organizations that support girls and women.

The Women’s Global Forum encouraged and achieved global participation with more than 5,000 associates and guests participating live in this event across the U.S. and 10 international locations. The event was also viewed by 700+ live YouTube viewers, as well as by thousands of associates across 29 states via internal broadcast channels. African Americans In July 2014, the Global Office of Diversity, in partnership with the African American Officers’ Caucus (AAOC) and the UNITY Associate Resource Group, hosted the inaugural African American Forum (AAF). The theme of the two-‐‑day event was “Make the Difference” in the business, the participants’ careers and for African American talent at Walmart. The associates in attendance walked away from the event with a true ownership of their careers. There were over 600 in attendance, including the approximately 500 invited participants, executive leadership, board members and external guests.


Veterans In May 2015, Walmart announced the next step in its Veterans Welcome Home Commitment by guaranteeing a job offer to any eligible U.S. veteran honorably discharged from active duty since the commitment’s original launch on Memorial Day 2013. Pipeline of Legal Talent In October 2014, Walmart launched a first-‐‑of-‐‑its-‐‑kind pilot program aimed at building a stronger pipeline of diverse legal talent in Chile. Walmart Legal in Chile, pledged to provide English lessons and create clerkships for 12 law students from local universities for three years. With collaboration among Walmart Latin American legal departments there is a plan to incorporate this model in other countries in the future as well as in other regions of the world. Religion On the U.S. National Day of Prayer in May 2014, the Global Office of Diversity hosted an interfaith summit that highlighted the importance of inclusion of associates from all creeds, faiths and beliefs. The Summit featured a keynote speaker and panel discussion, providing an opportunity for associates to share their diverse religious backgrounds and how faith can often intersect the workplace. The Summit has spawned continuous discussion regarding inclusion of associates of all beliefs and faiths, including continued conversation about the increased visibility and acceptance of agnostic/atheist associates at Walmart. Disability The Walmart Foundation made a $100,000 grant to support the Career Link Mentoring Program (CLMP), a collaborative project between the US Business Leadership Network (USBLN®) and Cornell University’s Employment and Disability Institute. The program provides a 6-‐‑month career mentoring opportunity to 70-‐‑75 college students and recent graduates with disabilities through linkages to business professionals from USBLN® member companies. The emphasis on mentees with science, technology, engineering and math (STEM) majors and veteran status supports employer demands for job candidates with these skills and backgrounds and aids in the successful transition of former members of the military into civilian careers.


PART II: DBP D&I Benchmarking Report 2015 ERG/BRG/Affinity Groups The annual DBP benchmarking survey spans across industries. In regards to employee resource groups 2015 DBP Participating Companies were asked the following questions and responded accordingly. Does your company offer employee resource/affinity groups for any of the following groups and their allies? {Select all that apply} Women 86.8%

Women of color (i.e. groups specifically for women of a certain race/ethnic group and their allies)

23.7%

Men of color (i.e. groups specifically for men of a certain race/ethnic group and their allies)

21.1%

People of color (i.e. groups specifically for people of a certain race/ethnic group and their allies, not separated by gender)

89.5%

LGBTQ 94.7%

Age/Generational groups 76.3%

People with disabilities 65.8%

Religious groups 18.4%

Veterans 71.1%

Working parents 39.5%

Caregivers of children or adults with special needs 23.7%

Job level/career specialty 18.4%

Special Interest groups (i.e. hobbies, sports, media, environment) 34.2%

None of the above 0%

Recruiting/Succession Planning/Advancement 82 percent of companies have a formal executive succession-‐‑planning program. For 63 percent of companies, performance appraisal objectives for managers include managing diversity issues. However, only 24 percent of those companies have formal compensation policies to reward mangers on their diversity results. The most common practice is bonus compensation increases if goals are met (13.3 percent of companies) and bonus compensation decreased if goals are not met (7.9 percent). Diversity and Inclusion Leadership Structure The most common title of the top diversity and inclusion executive is tied between is Chief Diversity Officer and “other”, a different title that is not VP D&I, Chief HR Officer, VP HR, EVP HR, Diversity or Diversity Manager.


Please indicate which of the following fall under the responsibilities of the top diversity executive: {Choose all that apply} Domestic strategy and policy development 92.1% Leadership coaching and development 71.1% Program implementation 97.4% Assessment and measurement 89.5% Communications 71.1% Multicultural marketing 26.3% Ethics compliance 34.2% Corporate social responsibility (CSR) 31.6% Leadership Commitment In regards to ways the company CEO has demonstrated a commitment to D&I, participant companies responded the following: Meets regularly with diversity executive to review diversity goals and performance 76.3%

Makes CEO diversity statement available on corporate website and in other corporate materials

76.3%

Oversees or approves management compensation plans that are tied to diversity 26.3%

Chairs or oversees Diversity Council 23.7%

Requires diversity executive to report back to him/her on diversity metrics 78.9%

Includes an update on diversity during annual updates with employees 44.7%

Provides annual update on diversity to board of directors 76.3%

Oversees and/or reviews metrics on supplier diversity 42.1%

Embeds diversity & inclusion into the business growth strategy 60.5%

Diversity Councils 79 percent of companies have external Diversity Council who is usually overseen by the CDO and 18 percent of the time by the CEO. Conclusion Diversity and inclusion benchmarking varies based on the information available. However, through extensive research, the best practices across industries for the advancement of diversity within a corporation include a few key components. First, senior leadership support is essential. Support should be reflected in financial, human capital and political


support. Communicating that support internally and to external customers and stakeholders is a best practice. Second, creating a pipeline for diverse talent and then the support and advancement of those employees are two essential pieces that work together. Third, employee resource groups and business resource groups that have proven value to the bottom line of the company will only strengthen the positive impact of different identities in the office. The three components listed are only a few recommendations on an expansive topic. The principles discussed can be applied when evaluating companies in specific industries like retail.

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FOCUS ON Retail Companies...COPYRIGHT*©*2016*BY*DIVERSITY*BEST*PRACTICES.*ALL*RIGHTS*RESERVED! 3! and!learn!fromone!another.!Ahold!is!replicating!this!model!within!the!ALANA/Mosaic

FOCUS ON Retail Companies...COPYRIGHT©2016BYDIVERSITYBESTPRACTICES.ALLRIGHTS*RESERVED! 3! and!learn!fromone!another.!Ahold!is!replicating!this!model!within!the!ALANA/Mosaic