In the face of growing backlash against DEI efforts in general and questions about the value of corporate positioning to root out alleged systemic racism, yesterday the New England Chapter of National Association of Corporate Directors presented a program on how Boards of Directors can best continue the fight against racial bias.
It should be pointed out that the positioning of the program was an assumption that systemic racism is present in corporate America, and that Boards needed to sharpen their attack notwithstanding that current events seem to attack that assumption: there is perceived to be a growing resistance to “woke” thinking, a belief that instituting racial preferences in hiring and promotion by definition disadvantage non-minority populations, and a presumed impact of the recent Supreme Court decision striking down previous use of equality metrics as practiced by colleges and universities. As to the last point, everyone agreed that such thinking will in fact invade the corporate board room.
Harvard Professor Robert Livingston set the stage by identifying the perceived problem and the rationales available to decide to fight against racism in the corporate setting: it is morally correct, it is good for business as diversity improves outcomes, it is important in hiring and retaining employees. It was noted that while individual polls that favor anti-racism efforts are premised often on the moral case, 80% of Fortune 500 companies explain their programs based on the business case. Unanswered was an explicit examination of the reason that large corporations adopt a business rationale; one expects that such an approach insulates against shareholder resistance where maximizing profit is important and some shareholders think that the cure of preference is worse than the problem itself. It does seem clear that corporate America remains generally aligned in the camp that systemic racism in business exists and is a bad thing; thus, the issue really is, how best to implement its eradication.
With that premise as grounding, the most interesting argument for how best to execute involves the recognition that hiring from the best schools or hiring people with the best grades, rigorously applied, tends to perpetuate racial bias. It was suggested the companies must recognize that students without the educational and economic advantages of majority populations will not get into better schools and will not test higher and will thus look to be less attractive hires or promotion candidates. It is, therefore, best to identify a band of favorable candidates, taking into account all factors including the challenges faced and overcome by those from less advantaged backgrounds, and then apply conscious decision to hire widely but only within that expanded “band” of candidates.
Other key take-aways: it is essential for the board to consider willingness of CEOs to undertake this effort, and essential for the board to “have the CEO’s back” in support; perhaps, make racial equity part of the corporate mission. Companies without strong CEO buy-in fail in the fight against racism within. CEOs and leadership teams need to understand that the effort is “not about you” and your own initial views, but rather in furtherance of corporate goals. This thinking needs to exist also in the Nominating and Governance Committee, which screens board members who ultimately hire the CEO and set corporate tone.
Companies also need to be aware also in dealing with supplier cohorts and business partners–are they in the fight? And when professional teams pitch a corporation for services, diversity in the pitch team should be considered.
Finally, the panel noted that today there is some growing societal resistance to the effort to fight systemic racism, and also a cadre of companies which adopt a stand against racism but fail to execute on the ground.
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Aside from the moral perspective, do diverse teams result in better corporate performance? This morning, as I write the above post, I note in one of my legal information services a report claiming improved corporate business performance in cases of at least gender diversity; post will follow if you are interested.