Bringing DEI into the boardroom
If there's anything that the second decade of the twentieth century brings us, it is the recognition of empathy, diversity, kindness, inclusion and fairness in the workplace, but also broader society. For companies, the discernible aspect of this takes its form in DEI.
“Why is everyone talking about it? Well, they’re talking about it for a reason,” says Steve Bowman, the managing director of Conscious Governance.
DEI stands for diversity, equity and inclusion. The fact is representation matters. Sitting at the top of the organisation, the board of directors should set an example for the other organisation members to follow. From directors down to the operational staff members, representation should be considered.
What is DEI, exactly?
Diversity: Members of the board set an example. They reflect the company’s mission, vision and core values. It is crucial to diversify a board as it allows different skills, talents and perspectives to penetrate the organisation. A diverse range of leaders means a diverse range of ideas and opinions. Backed by diverse personal and professional experience, cultural backgrounds and time as an experienced professional, a diverse range of directors can make a board much more complete.
Equity: Boards help organisations because they are the ones in charge of coming up with strategic planning. Amongst that is ensuring that members of the organisation understand what part they play for shareholders, others in the market, socially and environmentally – the bigger picture. The board has the task of avoiding blind spots that could otherwise lead to flawed and unfavourable strategies. Instead, they should focus on how to advance their strategy for the public good.
Inclusion: Inclusion builds trust, openness, transparency and respect; these are all points that build an effective board. Inclusion allows boards to cultivate an inclusive culture that, like diversity, means harbouring different talents, identities, life experiences and professional board service. Differences should be celebrated, and it goes without saying, but it should also be part of the board’s ethical code to be inclusive.
Why is DEI important?
Studies have shown that DEI has the potential to not only create a great working environment but also to increase sales revenue, increase customer base and increase profit. That's excellent news for any company. It is the honourable way to do business, and the benefits extend beyond just boosting company moral and increasing the quality of meeting room discussions.
Making quality decisions: Research done by Cloverpop shows that DEI makes for better decision-making at work. It shows that 87% of the time, inclusive teams make better business decisions. The research also mentions that decisions made by diverse teams delivered 60% better results. Other interesting conclusions also reveal that all-male teams make better business decisions 58% of the time, whilst gender-diverse teams do so 73% of the time.
It has been shown that diverse groups are more likely to encounter operational friction when executing business decisions (this is normal as more backgrounds mean more opinions), which is a good thing. This means that decisions are made after more careful discussion and deliberation.
Healthy company culture: Company culture refers to an organisation's shared values, attributes, characteristics and interactions between staff members. It can be set and defined from the moment an organisation is set up or is something that can slowly develop over time. According to a Harvard Business Review, DEI is most effective when integrated deep into the company culture. From the top down, acceptance and inclusion of each other are essential.
Higher employee retention: DEI brings a sense of belonging to those who work in the organisation. Employees who feel at home and welcomed are more likely to work harder and better. In addition, employees who feel more connected to their cause will have higher morale and are more committed to the company. This, of course, means that there will be a higher employee retention rate.
More likely to hit financial goals: Implementing DEI into the company values means that the company will be more likely to achieve financial success. It has been reported that companies with a high level of inclusivity are likely to hit their target by up to 120%. This is because employees who feel connected and comfortable in their workplaces are more likely to perform well. Another reason is that companies with successful DEI policies are more likely to reach the eyes and ears of funding groups.
How can Boards be intentional about DEI?
1. Incorporating it into core values
Mission, visions and core values should be defined from the beginning of an organisation. Different aspects go into core values, such as hiring guidelines, product specifications, vendor partnerships and more.
Core values are essential because findings from SHRM show that 94% of managers agree that a positive workplace culture creates a resilient team of employees. DEI should be included in the positivity created.
Intentionally creating a diverse board of directors can also be an option. Boards sit at the top of organisations and trickle down to present themselves as examples for the rest of the organisation. If the Board already consists of a diverse team, they set an example for the rest of the organisation to follow.
2. Training members for awareness
There are several DEI training programs out there for staff and board members. Raising awareness of the reasons why DEI is essential is one of the most valuable factors, as education has the potential to fundamentally change the core beliefs of an individual. It is suggested that board members should spend time listening and engaging in discussions about DEI. Board members need to understand both historical and current diversity crises.
3. Set key performance indicators to measure your progress
“DEI success in the Boardroom is achieved when there is a well-designed and robust analysis of existing skills, backgrounds and life experiences that meet the current and future strategic needs of the organisation. A Board Skills matrix should be designed to measure and monitor these.
Another powerful tool that many Boards do not utilise is a Stakeholder engagement framework that identifies who are the key stakeholders, what engagement there is currently, what engagement is required, and action plans to achieve the desired outcome. This highlights any current or future potential issues of diversity, equity and inclusion,” explains Bowman.
Conclusion
DEI is not only good for the company culture and public relations, but it is also a key to business success. Board members sit at the top of organisations as leading examples of everyone else at the base of the company. Companies should push for growth and innovation, educating their directors and staff on the importance of relevant diversity crises. It is essential for companies to create a healthy working environment where employees feel safe, welcomed and included, no matter their gender, race or beliefs.
