Is Diversity a Serious Goal for Organizations?

Given all the events in the past few months, diversity has been a focus for many organizations.  More specifically, there have been a number of pledges to have greater diversity.  Jaime Dimon, the CEO of JPMorgan Chase, took a knee with employees to protest racial injustice in law enforcement.  There have also been a number of marketing changes by organizations to promote the diversity theme.

For example, Walmart will stop locking up “multicultural” hair and beauty products in display cases, and Sephora committed to devoting at least 15% of its shelf space to black-owned beauty brands. 

Yet there are still sceptics that diversity initiatives today are simply flavor of the month.  “There’s a lot of performative allyship going around,” said Y-Vonne Hutchinson, chief executive and founder of diversity consulting firm ReadySet. “Nobody’s asking for a CEO to take a knee. You take the knee after you change your policies.”

And then there is the question of how to create more inclusive workplaces.   Many organizations are saying they will increase representation of minorities and women in their higher ranks.  Again, skepticism is widespread.  “I appreciate your Black Lives Matter post. Now follow that up with a picture of your senior management team and your board,” said Brickson Diamond, chief executive of diversity consulting firm Big Answers and former chief operating officer of the Executive Leadership Council, a nonprofit focused on increasing the number of black executives.

Only 4% of JPMorgan Chase’s top executives are black, despite years of public, high-profile efforts to increase its diversity. Wells Fargo saw the percentage of black senior executives fall from 8% in 2015 to 3.5% in 2019.  Bank of America is currently at 5%.

In the tech arena, it is reported that African Americans comprise a fraction of the senior leadership at the largest tech firms — 3.1% at Facebook, 3.6% at Google, 4.4% at Slack, 5.3% at Twitter, and 2.7% of executives at Microsoft.  There is a legitimate argument for these organizations in that there may not be a sufficient pipeline of qualified employees/applicants and that they are all fighting for the same pool, thereby causing their comp structures to be out of balance.  But the question does arise as to inclusion. More specifically, what are these organizations doing to identify and create a qualified pipeline?

Moreover, according to a 2019 analysis by Black Enterprise magazine, 187 companies in the Standard & Poor’s 500-stock index did not have a black board member.  Of the top 3000 listed companies, underrepresented ethnic and racial groups make up 40% of the U.S. population but just 12.5% of board directors, up from 10% in 2015, according to a new analysis by the Institutional Shareholder Services’ ESG division. So, the skepticism is reinforced.

Any employer thinking about using quotas for representation in higher levels needs to recognize that the imposition will violate the law and cause liability to the company.  For example, when Jacque Nasser, the former CEO of Ford Motor Company, made a specific attempt to increase diversity in the management ranks, he opened the door to lawsuits.  A major lawsuit was filed in 2001 alleging that Nasser directed managers to increase the number of minorities and females at Ford while decreasing the number of white men in order that the workforce reflects the company's customer bases.  The approach was to redo the performance management system to “dump” older white male employees.  The case settled for millions.

In more recent days, Princeton declared it historically discriminated against minorities, and the federal government stated that based on this admission it was investigating whether Princeton violated federal civil rights law, suggesting that a public expression of contrition for a history of “systemic racism” at the university was an acknowledgment of illegal behavior.  “You admitted Princeton’s educational program is and for decades has been racist,” federal officials wrote in a letter to the school on Wednesday.  But interestingly enough, by admitting historical discrimination, hard goals or quotas can be a remedy to the discrimination.

Therefore, if an employer is looking to create greater diversity in the organization, consider organic inclusion efforts from succession planning, training and development. and outside pipeline resources.  Otherwise, the failure to take accountability with actionable and measurable results will negatively affect the employment brand and the employment and applicant experience.

 

 

Source:  New York Times 9/17/20, 9/15/20,  Washington Post 6/20/20, Fett & Fields PC 2/17/2001

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