Diversity, Equity and Inclusion – A New Dimension

Numerous studies show that organisations which nurture a culture of diversity, equity, and inclusion in the work place will achieve sustainable and lasting organisational and business success.

Research also suggests that these organisations conscientiously embrace their role as social stewards as part of the ESG (environmental, social, governance) framework.

We know that focussing on diversity, equity and inclusion enables innovation, delivers healthy employee engagement and helps build an attractive employer brand. But there is now evidence that by focussing on diversity, equity and inclusion, companies can also achieve efficient risk and liability mitigation, and competitive and efficient premiums for employment liability coverage.

Diversity, Equity and Inclusion | A corporate imperative

Insurers will soon systemically be assessing the DEI maturity of organisations for underwriting directors and officers and employment practices liability covers. Company boards are already starting to review their organisational risk assurance and compliance apparatus with DEI as a focus, given the significant risks posed by the absence of a mature DEI culture, including:

• increasing exposure to claims and litigation emanating from employment practices liability on account of discrimination (voluntary claims resolved through EEOC in US were reported at circa $440 million for Fiscal Year 2020),
• an evolving environment of reverse discrimination claims to customers’ who desire to do business with vendors that meet annual DEI commitments,
• increasing exposure to shareholder derivative lawsuits as they hold boards accountable for profitable growth and innovation in the wake of research suggesting that diverse and inclusive organisations are better positioned on profitable growth, corporate brand reputation, attracting and retaining investors-talent-customers, and on innovation,
• an evolving governance maturity wherein many state administrations in the U.S. seek diversity in the composition of boards for companies doing business in that state.
• a heightened awareness amongst institutional investors and PE firms as they insist on a mature and thriving DEI ethos in the organisations in which they invest

Diversity, Equity and Inclusion | A paradigm shift

Despite putting significant effort into DEI initiatives, many companies are not seeing evidence of progress, ie they are not “moving the needle”.

Progressive organisations have already embraced the “WHY” and others are following suit, so the answer is in the “WHAT” and “HOW” of efforts.

Many leaders continue to consider DEI as an “issue” with efforts predominantly being reactive and anchored around addressing symptoms. Many have no evidence of whether their interventions will actually improve equity and inclusion in the workplace.

Leadership teams need to embrace a new approach, one which focusses on developing an objective understanding of how colleagues experience the workplace. They can then leverage these “experiential insights” to create and nurture a workplace that prioritises and builds a culture of inclusion.

This is not about adding to the overload of employee surveys or assessments that measure, assess and report sentiments, beliefs, and opinions.Rather, this is about gathering, synthesising, and studying the experiential and objective insights of colleagues on the key factors that underpin the workplace culture.

If you would like to get more impact from your DEI initiatives and interventions, and to learn more about how we can support you, please reach out to us, and we would be glad to partner you in this important endeavour.

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