Medium and small businesses must define conditions for diversity
Activists and others seeking to force companies to honor their commitments from last summer are keeping track of the company’s actions. Interestingly, the investment community has joined them, as the last proxy season shows. For example, ISS and Glass Lewis, two US-based proxy advisory services that provide governance and advice regarding shareholder votes, have both published advice recommending voting against directors without sufficient board diversity. administration.
BlackRock, the world’s largest asset manager, has received media coverage for its pressure on cohesive boards, as has Goldman Sachs, which won’t bring a company on the stock exchange without diversity on the boards. And the Nasdaq proposed a listing rule requiring the diversity of companies.
On the legislative front, at least a dozen states, including Illinois, Maryland and New York, have passed or are debating laws requiring greater transparency on diversity, with some, such as California and Washington, mandating directors. feminine and diverse.
The greatest pressure, however, can come from ordinary people: customers, clients and employees. Employees value diversity because it makes them feel valued and leads to greater productivity. Customers and clients want to see businesses that reflect and can better tailor products and services to different tastes.
Diversity, equity and inclusion are not a flavor of the month but a value shared by the majority of the American workforce, which is now dominated by millennials and millennials who grew up in the United States. era of corporate social responsibility. Their demand for action is something that all businesses must face.
While larger companies have a head start on DEI, it is not too late for small companies to dive into diversity. Here are some steps any business can take right now.
- Be the change you are looking for. True diversity means different perspectives. To reap the benefits of diversity (creativity, innovation), be sure to include difference around the decision-making table. Seek outside perspectives and experiences when filling new leadership positions, including on the board. Instead of relying solely on the suitability of the candidate, think about the skills and characteristics that are added to your existing team.
- Do some homework. Because large companies invest resources in DEI, there is an industry dedicated to it. Examples abound of what works and what doesn’t. Experienced professionals who dedicate their careers to helping organizations advance diversity are valuable resources.
- Treat the IED like another business problem. A familiar way to approach IED is from a data perspective. Perhaps with the help of an established diversity professional, assess where your organization is today. Survey employees, track their experiences, identify your issues and create incentives for change.
- Control what you can control. For an immediate impact on diversity, think about what is under your direct control, including hiring. Not only your management and full-time staff, who should be at the heart of a DCI program, but also your suppliers: consultants, tax advisors, lawyers, contractors, communications. Consider a supplier diversity program that rewards the work of women-owned and minority-owned businesses, while also examining hiring and onboarding functions, with the goal of creating a diverse and inclusive work environment.
As market conditions improve and pandemic restrictions ease, it can be easy to let DCI fall to the bottom of your strategic priorities, but external forces are in place to ensure that DCI stays at the forefront. All businesses would do well to keep diversity high on their priority list.
Ryan whitacre is a partner of Bridge Partners, a minority-owned executive search firm specializing in inclusive research.