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  • Why CEOs Must Prioritize Diversity & Inclusion

Why CEOs Must Prioritize Diversity & Inclusion

By Josephine Victoria Yam, J.D., LLM.

2018 January 30

"Diversity and inclusion has become a CEO-level issue around the world," observed Deloitte in its 2017 Global Human Capital Trends report. "The era of diversity as a 'check the box' initiative owned by HR is over. CEOs must take ownership and drive accountability among leaders at all levels to close the gap between what is said and actual impact".

So what happens when a CEO does not prioritize diversity and inclusion?

Let's take the story of global retailer H&M as an example.

A few weeks ago, the Quartz reported that H&M's South African office released an advertisement of a black child wearing a hoodie with the slogan ""coolest monkey in the jungle". This ignited anti-racism protests across the country, with people storming and trashing several H&M stores into total disarray.

The Ahmed Kathrada Foundation, which advocates for deepening non-racialism in South Africa, notified H&M of its offensive advertisement saying: "It is of serious concern that your company published the advert without considering the historical context of how the word and image of a "monkey" has been used to racially demean black people for generations." A week later, H&M announced that it would be appointing its first diversity leader. The belated appointment of a diversity leader shows that H&M CEO Karl-Johan Persson did not prioritize diversity and inclusion in his company.

How can a CEO ensure that diversity and inclusion is prioritized and deep within the corporate culture?

One way is to have a nonprofit board matching program in place for the company's employees. Just ask CSR and governance expert, Alice Korngold, who just released her groundbreaking report "Better World Leadership: The Nonprofit Board Leadership Study". Korngold provides compelling data on how nonprofit board service advances workplace diversity and inclusion, which in turn increases shareholder value. The report was based on a survey by 957 respondents and was sponsored by American Express, HP, Johnson Controls, Dow Chemicals and PIMCO.

In the report, 78% of survey respondents stated that their board experiences increased their appreciation for the perspectives of people from different backgrounds. Employees bring this new appreciation for diversity back to their companies, which makes them more effective in their jobs. They become more creative and more innovative. They develop greater empathy for different people in their workplaces, which results in more inclusive corporate cultures.

Diversity in this context covers both identity diversity (i.e race, ethnicity, gender, age, sexual orientation) and cognitive diversity (i.e. skills, perspectives, thoughts, worldview).

Explains Korngold, "Most diversity programs aren't increasing diversity...The positive effects of diversity training rarely last beyond a day or two…The challenge is that most of us learn through experience, not by being told or trained, particularly with such complex matters as diversity, inclusion, and empathy."

Deloitte calls this the "new focus on experiential learning". It recommends that "Organizations should consider… immersing executives in the world of bias to give them a visceral understanding of how bias impacts decision making, talent decisions, and business outcomes."

By taking ownership of diversity and inclusion and ensuring that experiential programs to advance it are in place, CEOs can sleep well at night knowing than an H&M-type nightmare will never haunt them.

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