CHAPTER 07 Beyond Gender: Diversity and Inclusiveness Now and Going Forward
– increasing the recruiting goal for summer internships so that 40% of spaces are filled with BIPOC candidates, an increase from the previous goal of 30%; and – adding diversity and inclusion objectives to its performance management process and expanding its public disclosure on diversity efforts starting in 2021 to include racial and ethnic data in pay equity reporting. Immediate Steps to Promote Diversity In Davies Governance Insights 2019 , 158 we outlined five practical tips to help move the diversity needle: (1) consider adopting a target; (2) consider whether to expand your board size; (3) consider more diverse board criteria; (4) ensure your culture supports diversity and inclusiveness; and (5) move past the business case approach and begin to execute on your diversity goals. While these tips were provided in the context of navigating gender diversity, they apply equally to diversity more broadly. In addition, issuers should consider the following recommendations in order to be more progressive and forward-looking in embracing and promoting diversity: 1 Re-evaluate the board’s role in integrating inclusion into the organization’s strategy. Boards and senior management should thoroughly review and evaluate their overall corporate governance framework, including board and committee mandates, governance guidelines and diversity policies, to ensure that they adequately (and coherently) promote diversity throughout the organization. Boards should set a vision for diversity and inclusion and work with management to define these concepts within the organization. Boards should also play an active role in overseeing diversity and inclusion initiatives, including by (i) establishing goals and evaluating the organization’s progress on
implementing its inclusivity vision, strategies and goals; (ii) providing support to, and actively listening to the concerns of, management and employees; and (iii) ensuring adequate training and education regarding systemic racism, discrimination and unconscious bias. 2 Consider whether diversity committees or officers would be appropriate. Several issuers are beginning to establish diversity and inclusion board committees and/or hiring chief diversity, equity and inclusion officers. These committees and officers can help bring focus to diversity programs and initiatives and provide strategic advice and direction to advance diversity, equity and inclusion. They can also facilitate regular monitoring and reporting of a company’s progress with respect to diversity. However, a committee does not relieve the board of its overall responsibility for oversight and, if established, a committee should provide reports and updates to the board. 3 Consider whether company resources should be allocated to diversity initiatives. Boards and senior management should consider allocating company resources to both internal and external diversity programs and initiatives. If an issuer decides to allocate resources, a formal plan should be developed with respect to the amount of resources to be allocated and how and where those resources are to be allocated. 4 Determine how to best engage with stakeholders about diversity. Communicating the company’s overall commitment to diversity and inclusion to shareholders, the general public and the company’s other key stakeholders is an important consideration for boards and senior management. Establishing formal communication guidelines may be helpful, with many issuers relying on their CEO to deliver messaging. Boards should also consider how to measure and meaningfully compensate the CEO and other senior officers on diversity and inclusion performance goals.
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