A Dissatisfied Workforce Is the Biggest Risk of All: Boards and companies ignore DEI concerns at their own peril.

• Author: Hayes, Bill
• Position: ENDNOTE

In this edition of Directors & Boards, we run the gamut in covering the risks that face public companies. We tackle geopolitical risk and the need for international directors. Cybersecurity has its moment in the spotlight. Risks in the supply chain are addressed. All of these are vital concerns for directors. But, in my opinion, the number one risk facing boards and public companies is people --their people.

Public company boards should pay close attention to trends around DEI and related social issues or risk being put out of business by the watchful people who work for them now and the people who might have worked for them but decided not to because the company's standards on diversity are lacking.

Diverse Executives Want to Work for Diverse Companies

We recently published a story on the Directors & Boards website that cites the views of diverse executive candidates who decline to join companies whose boards and management teams are not fully committed to DEI (see "Diverse Executive Candidates Demand a Commitment to DEI"). I figured, "OK, that's something people say, but when it comes time to receive a needed paycheck, you're probably going to make some compromises." (Full disclosure: If you somehow missed my photo, I am a somewhat middle-aged white guy who has lived in a bubble of privilege.) As I worked on the story and scoured the survey results it cites, however, I was floored by this nugget: More than one in three diverse executive candidates (36%) have declined a job offer because the organization lacked diverse representation at the leadership level.

According to Michelle Delcambre, operating partner of early-stage venture capital firm Felicis Ventures, "I'm encouraged to see this population of people taking the power back and not feeling forced into these opportunities just because they have presented themselves. Instead, they are looking into opportunities that have both presented themselves and are culturally values-aligned to what this population of people cares about and values." In other words, if you are on the board, or part of the leadership, of a company that is only paying lip service to diversity, the best and brightest candidates are increasingly likely to decline your offers of employment as they move on to their next interview.

Ignoring Social Issues Risks Losing Valued Employees

Boards that fail...