Four months after the Supreme Court chose to gut affirmative action at colleges and universities, despite two-thirds of Americans disagreeing, the fallout from that rash and mistaken verdict continues to reverberate through our country’s institutions. As universities try to figure out a way forward, many companies are concerned that their Diversity, Equity, and Inclusion (DEI) efforts will also be under attack.
Emboldened by the verdict, conservative activists are now working to roll back the clock on racial justice across our society.
Right-wing activists want to expand the Court’s reasoning to impede racial justice efforts outside of higher education. Nothing is off-limits, including the Fearless Fund, an Atlanta firm that offers grants to black women entrepreneurs, recently sued, along with two major law firms for offering diversity fellowships. America First Legal, led by former Trump aide Stephen Miller, has issued complaints to the Equal Employment Opportunity Commission against companies such as Starbucks, Salesforce, Kellogg’s, and Major League Baseball for pursuing diversity initiatives. Many opportunistic conservative politicians are hamstringing DEI efforts in their states wherever possible. Last month, a judge struck down key provisions of the Small Business Administration’s 8(a) Business Development program, which has worked to help underrepresented-owned small businesses access and win government contracts.
Thankfully, this battle has also been joined by legal experts who understand the importance of enhancing diversity in American life. Late last month, the New York State Bar Association (NYSBA) released a 93-page report by their Task Force on Advancing Diversity that shows how colleges and companies can move forward on DEI within the new legal parameters. Their timely report explains why expanding diversity is essential for businesses and how they can best continue to advance DEI effectively in their workplaces.
Sixty major American companies told the Court before their decision that “racial and ethnic diversity enhance business performance,” and a 2020 study by McKinsey similarly concluded that “the most diverse companies are now more likely than ever to outperform less diverse peers on profitability.” The NYSBA report further confirms this with an array of sources. It notes that in 2018, the Boston Consulting Group found that businesses with diverse management teams record 19% higher innovation revenue and better overall financial performance than those without. Similarly, the Wall Street Journal shared a 2019 analysis of the S&P 500, finding that America’s most diverse companies have better operating results and higher performing shares on average than less-diverse firms. Additionally, the aforementioned NYSBA study found that diversity “is among the most important predictors” of a company’s overall sales revenue.
These are all excellent reasons businesses must continue to foster DEI proactively. The NYSBA report outlines that “private companies continue to have various tools available to foster diversity within their organizations.” Rather than retreat from DEI – which could open them up to unhappy employees, market losses, and even SEC investigations – companies should use the Court’s decision “as an opportunity to review and enhance their workforce DEI initiatives” to see they align with “recruitment, retention and development, and supplier-diversity goals” and “to mitigate any legal and reputational risks.”
In practice, businesses should communicate their dedication to and the value of expanding DEI in the workplace. While assessing their legal risks in this time of scrutiny, companies should continue important initiatives to be inclusive, including:
- Implementing DEI education and training for all staff and partners
- Focusing on empathy and sharing experiences
- Setting measurable targets for improvement
- Collecting data to track when they’re moving in the right direction
- Fostering good practices and a sense of mutual responsibility for improving DEI across the organization, from management on down.
Because the Court’s decision will likely diminish diversity at universities, the NYSBA report also emphasizes that businesses “reconsider and renew efforts to improve outreach and recruiting of diverse talent.” Recognizing that it is illegal for companies to state a preference for race or gender in job openings, they can highlight their commitment to fostering a welcoming environment for diverse candidates and include language that reaffirms their commitment to DEI. They can also expand their recruiting efforts beyond their usual sources to include diverse student organizations and career fairs, high school and college pathway programs, and candidates who have taken non-traditional paths in life to date.
In sum, business leaders should not be intimidated by bullies who are out of step with the American people. Effective DEI initiatives have been proven to benefit companies, workforces, and customers. For ideas on enhancing your initiatives, check out the DEI Lighthouse Program established last year by a cross-sector coalition that includes the World Economic Forum. It offers insights and examples of policies moving the needle at major U.S. companies and worldwide.
I’ve also been impressed by what I’ve seen while serving on the Board of Hudl, a private company based in Nebraska focused on helping sports teams better use video and data to improve their performance. Realizing they had a long way to go to become a diverse company, Hudl has since worked to make DEI and accessibility and belonging (DEIAB) central to their organizational values. They’ve revamped hiring practices, sought out diverse partnerships, and strived for greater inclusion throughout the organization. They’ve also been steadfast about tracking and measuring their progress along the way. Because they know there’s work to do, Hudl is expanding their DEI efforts. Many more companies should follow suit.
In this environment, with politicians and courts trying to take us backward, business leaders must take up the slack and continue leading us forward on diversity, equity, and inclusion. Stand up for the DEI efforts in your workplace. Be explicit and intentional about why they are so important. And encourage others to come together and get involved.
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