After Papa John’s racism scandal, the company’s chair speaks on diversity at Wharton event

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Leading Diversity@Wharton hosted a panel discussion on diversity and corporate boards that drew over 100 students and community members Monday evening.

Titled “What can corporate boards really do about diversity?” the event featured 1994 Wharton graduate Jeff Smith, chair of Papa John’s International Inc; and Janet Foutty, chair of the board of Deloitte. Both panelists emphasized the importance of having diversity at all levels of a company, including the boardroom, and said this can benefit both society and the company itself.

The event follows recent controversy surrounding Papa John’s after founder John Schnatter used a racial slur on a conference call in May and resigned as the company’s chairman in July. During the event, Smith described the scandal and explained what the company is doing to create a more diverse culture. He said retired basketball player Shaquille O’Neal recently joined the board of Papa John’s, where his “eye-opening insights” and “different views on pricing and marketing” add great value to board meetings.

“We are trying to change a company culture that was far from ideal and make it into the ideal,” Smith said.

“Boards have to be incredibly sensitive and aware of not falling into the tokenism trap,” she said.

Smith said one path for effective change involves shareholders sending letters to boards of companies demanding more diversity. Since board members are directly accountable to shareholders, this often leads to quick action.

“It took too long to start, but it is happening, and it’s not going to stop,” Smith said.

Foutty emphasized the importance of learning more about the governance of a company before joining it, particularly the diversity and role of the board. Smith agreed that looking at a company’s social mission is important.

“How many of you care about the social purpose of the company you are working for?” he asked the crowd. (read more)

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