Diversity and inclusion have been business buzzwords for decades, but in recent years a growing number of companies have realized that creating a diverse and inclusive culture is not only good public relations, it's good for the bottom line.
A strong body of research shows that truly diverse and inclusive organizations outperform their peers. That research, along with broader cultural shifts, have powerful institutional investors now demanding that organizations within their portfolios show that they're making progress on measures of diversity and inclusion.
Even as companies make progress, there's much to complete. A new Deloitte study finds that while 8 in 10 professionals say that their organization has an inclusive workplace, nearly two thirds say they have experienced bias in the past year.
"A critical need for inclusive leadership, shifting U.S. demographics, and increased attention from investors has put an impetus on boards to address diversity issues," says Deloitte' chief inclusion officer Terri Cooper. "As organizations continue to drive progress, they are also realizing that their efforts must go beyond diversity to focus on creating inclusive cultures."
Much of the focus recently has been on increasing diversity within the membership of the boards themselves. There has been slow progress on that front. Last year, women comprised 40% of all board appointments and minorities made up 23% of new board appointments, according to Hendricks & Struggles' 2019 Board Monitor. At that rate, women would reach parity with men on appointments (but not board seats) in four years, but racial and ethnic appointments could take far longer.
Today's boards are realizing that their role in fostering a diverse and inclusive culture goes beyond simply making sure that the board itself is diverse, using their roles to foster a diverse and inclusive culture throughout all levels of an organization.
"We're making sure that we set the tone at the top and lead by example, but we also need to stay informed and engaged about what's going on at our company," says Michael J. Williams, chairman of the board for Realogy Holdings Corp.
Experts say there are several ways that board members can accomplish that goal. Here's a look at a few of them:
Expanding the definition of diversity
While a board with a few members who are women or people of color may allow a company to check a box on diversity disclosure forms, progressive boards take a broader view of...