Former Managing Director, BSR
Jesse Nishinaga, Manager, Advisory Services and Aditi Mohapatra, Associate Director, Advisory Services, BSR
There is little question anymore as to why diversity in the workplace is important to business. In today’s global business environment, not only does a diverse and inclusive workforce help attract and retain talent, it also creates a competitive advantage that results in a better understanding of customer values and expectations and an improved ability to deliver products, services, and stakeholder value. Our work with information and communications technology (ICT) member companies has further demonstrated that diversity is a key “material” CSR issue.
Many companies, not just in ICT, have developed specific policies and programs—several of which have been around for decades—to address the issue of diversity. In recent years, some governments have even enacted legislation to increase the diversity of the boards of public companies.
But despite these efforts, we have not seen the kind of improvement we expected to see by now, particularly at the upper echelons of business. A quick scan of the boards and executive management of the top 10 U.S. ICT companies on the Fortune 500 list suggests that we still have quite a way to go: Only 1 in 5 board members and 1 in 8 top executives is female. These ratios appear to get worse, relative to U.S. national averages, in terms of minority representation.
One possible explanation is that companies continue to be reluctant to provide rich information and data on diversity that is on par with the level of transparency, consistency, comprehensiveness, and urgency they demonstrate when reporting on other CSR issues, such as supply chain or environmental impacts.
To reverse this trend, there are three things to consider when improving your company’s CSR reporting on diversity:
- Define what diversity means for your company. Broadly speaking, diversity is about recognizing and accepting individual differences and creating an inclusive, positive, and safe environment that embraces these differences—which include gender, race, ethnicity, age, sexual orientation, socioeconomic status, physical abilities, religious and political beliefs, and more. Define what diversity means for your company, how it drives your business, and how it’s linked to your company’s core principles and ethics.
- Report what you are already tracking. In many countries, companies are required by law to track and report certain diversity data (for example, Employer Information Report or EEO-1 data in the U.S.). The Global Reporting Initiative (GRI) recommends that companies report their “composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.” Report what you are already tracking. Over time, you can align with the GRI guidelines, paying particular attention to reporting the diversity of your governance body and senior management.
- Stay ahead of public policy and share your results. According to the Human Rights Campaign Foundation’s latest Corporate Equality Index, a record number of companies in the U.S. are demonstrating commitment to lesbian, gay, bisexual, and transgender (LGBTIQ+) equality in the workplace. These companies are pioneering new policies and practices, “implementing an ethos of LGBTIQ+ inclusion that goes beyond U.S. employee policies.” Should your company be one of these trailblazers, whether in the area of LGBTIQ+ equality or any other dimension of diversity, describe your efforts and share your results thoroughly to lead your industry in creating a more diverse and inclusive society.
By improving reporting on corporate diversity, companies show they are serious about the issue and have tangible plans and goals in place to advance their performance. Companies that hold themselves publicly accountable to these plans and goals can improve their diversity performance over time and discover new sources of competitive advantage in the increasingly global, interconnected, and challenging business environment of today.
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