EngagementDiversity & InclusionHow boards of directors can maximise the benefits of diversity in the workplace

How boards of directors can maximise the benefits of diversity in the workplace

HR leaders Sanjay Harrichand, Chuck Heaton, Chuck Kemper and Jason Anderson collaborate to highlight why boards of directors should focus on I&D initiatives to benefit organizations.

In the fourth article in our series focusing on why Board of Directors (BODs) should pay more attention to HR issues within organizations, we look at how boards can strategize to reap the benefits of diversity in the workplace, determining what success looks like and how executives are being held to account.


The emphasis and case for inclusion and diversity (I&D) in corporations has never been stronger. Analysis and data show that diverse, inclusive and teams that enable a sense of belonging perform better, so this is no longer a flavor of the month fad but a distinct imperative for organizations to take seriously in order to thrive and prosper.

To reap the benefits of diversity in the workplace, I&D cannot just be the purview of the HR department because it will fail. Every leader in the business needs to be on board for the right reasons, rather than because HR requires it. But perhaps  more importantly, it needs to be sanctioned, supported, and monitored by the board. The CEO needs to be held accountable by the board for delivering on the I&D goals and the CHRO should help with metrics and reports so progress can be objectively measured.

The business case

Supported by mountains of data and research over the years, it’s become abundantly clear that there is a competitive advantage enjoyed by organizations that foster inclusion (which inherently fosters diversity) and so it’s a no-brainer in terms of why your organization should pay great attention to it.

In May 2020, McKinsey stated the following in an article titled Diversity wins: How inclusion matters: “Over the past five years, the likelihood that diverse companies will out-earn their industry peers has grown. So have the penalties for companies lacking diversity.

Why should boards focus on I&D?

The business case for the benefits of diversity in the workplace is undeniable. Inclusive and diverse teams outperform in every aspect including their innovation, decision making, and contribution to the bottom line. Plus, potential employees and customers covet an embedded I&D philosophy. So, if your board or the executive leadership team is still asking for the business case for I&D, your company is in trouble. However, as BODs forge ahead with their plans, it cannot be in a vacuum devoid of any understanding of the fundamentals required for it to be successful. So, what are the steps BODs can take to change the direction on I&D?

Step one: challenge the status quo

We can all make this place better, together…

Endless possibilities of change are making some homogenous organizations almost extinct while those that have embraced inclusive and diverse workforces have thrived simply because its proven that inclusive and diverse teams perform better than homogenous teams. Simple as that.

Step two: create a new leadership shadow

Inclusive leadership is not the same as having a leadership team that is diverse. Leaders need to embrace inclusive leadership behaviors and serve as the champions of diversity for it to become a part of the DNA of the organization, and hence achieve the culture shifts that ensue from that. This means all leadership, including boards. Leaders must be the role models for driving to gain the benefits of diversity in the workplace; it is not just about words, but there must be action too.

Step three: address unconscious bias

There has been a major push by organizations to unleash unconscious bias training as a first step to educating employees and creating the catalyst for change. However, we caution that while unconscious bias training is invaluable, it needs to be accompanied with other interventions to really be impactful.

Mitigation efforts can and should include the following:

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  • Organization-wide unconscious bias training for leaders and staff
  • Encouraging peer-to-peer recognition and provide support to address issues
  • Ensuring that groups assigned to perform work are diverse
  • Enable open discussions about stereotypes and how to mitigate them from real-life examples
  • Solicit feedback about the organization’s efforts and take on board the feedback
  • Leaders need to walk the talk and exhibit the correct behaviors in both their actions and communication.

A single training event will not resolve anything. It needs to be a sustained program-based effort. Inclusive and diverse teams are more engaged, perform better, foster and drive innovation and creative solutions and ultimately contribute to a greater value for the organization’s culture, brand and bottom line.

Step four: seek feedback and have open conversations

Enable open conversations with employees and leaders about what works and what does not. Listen to ideas and seek broad input into how to manage change in a sea-storm of change.

Step five: change the culture and narrative

Do not put I&D initiatives on the back burner because they seem less important than other priorities. If anything, I&D is an enabler for many of the other priorities, especially retaining the best talent who, without a doubt, all value inclusion.

Step six: measure, measure, measure

There is no shortage of I&D metrics out there, but determining what is important for your organization in terms of moving the dial on performance is critical to be successful. BOD’s and executive leadership teams can avoid window-dressing by not simply selecting the easy metrics. Focus on the metrics that will drive progress and performance and hold everyone to account.

The time to gain the benefits of diversity in the workplace is now

Organizations that want to be a “great place to work” embrace I&D as an important cog in its culture journey and so it’s imperative that they make the positive changes now to gain the benefits of diversity in the workplace. Dust off those policies but more importantly assess the roadmap, ensure its relevant, and ensure it has what employees want and need to be more productive and engaged.

Boards need to prioritize I&D as a formal key performance indicator for the CEO and the executive leadership team to ensure it is a key part of the overall culture efforts.

A great example of a board leading from the front is Starbucks. It is mandating anti-bias training for all its executives and have set them targets to increase minority representation in the workforce that will be tied to executive compensation over the next five years. Now, that is commitment.

BODs and executive leadership teams are being held far more accountable for their organizations corporate culture by their shareholders, employees, governments and other important stakeholders.

The pandemic has no doubt caused disruption to corporate culture in so many ways.

However, BODs can start by setting the inclusivity example in their own boardrooms, enabling and advocating for an inclusive and diverse culture internally and externally through entrenched strategies and programs and by steadfastly holding management teams accountable for their delivery and behaviors around I&D. BODs can certainly move the dial on I&D and deliver the value, sustainability and success it brings.

Keep an eye our for our next article (the fifth in this series), which will be titled: Ways of working: how are organizations adapting to virtual working concepts?


Lead author:

Sanjay Harrichand is Sr. Human Resources Consultant and an international HR Executive from South Africa with over 20 years of experience leading HR Teams in the mining and energy sectors.

Contributors:

Chuck Heaton, SPHR, SHRM-SCP is an HRD Thought Leader, Sr. Human Resources Consultant for Talent IQ and a global HR Executive with over 30 years of experience leading HR Teams in multi-national companies.

Chuck Kemper is a SR Human Resources Consultant and a global HR Executive with over 25 years of experience leading HR Teams in multi-national companies.

Jason Anderson is Vice President of Human Resources at U.S. Physical Therapy, Inc. with deep domain experience in compensation, accounting, finance and has spent the last 10 years leading HR Teams in multi-national companies

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