Equity Impacts Corporate Decisions
Why have diversity, equity, and inclusion (DEI) expertise in the Boardroom? Look at the controversy swirling around the Georgia’s voting law–the backlash, the boycott, and the backlash to the boycott. Georgia’s most vulnerable citizens lose from both the law and the boycott. I contend that if there had been DEI experts on the boards of the major corporations that traditionally lobbied in Georgia, this may have been averted. Corporations could have predicted how the passage and signing of the bill into law may have impacted their brand. While the bill was being crafted social justice concerns could have been addressed, along with concerns regarding voting integrity. When you are driving you slow down before you come to the hairpin curve rather than trying to correct for it afterward. I have always contended that we should resolve a problem before it begins.
Again, using a driving analogy, DEI is not a one-way street; it’s not a two-way street. DEI is a traffic circle or roundabout. All must yield and give the right of way so that they too may be given the right of way. The traffic circle symbolizes a reciprocity of respect. It is not veering towards the far left or the far right. Reciprocity is listening to the concerns and fears of all the stakeholders. Chief Diversity Officers (CDOs), by virtue of their expertise, would represent all shareholders and stakeholders. And in these transformational times, CDOs would focus on equity and social justice, domestically and globally. CDOs would add a valuable perspective to the board impacting CSR (corporate social responsibility), externally, and policies, practices, and procedures, internally. I maintain that the overall diversification of boards is essential. Board diversification is both increasing the demographic diversity of the board and broadening the essential functions required on the board.
When the Georgia law is examined, the real culprit is lack of accessibility. Inaccessibility has been demonstrated in the past with four and eight hour waits in polling lines in the Black community. The accessibility issue should have been addressed while the bill was being crafted. At the same time, it is important to listen to the fear regarding voting integrity. While the amount of voter fraud has been shown to be minuscule in the past, there can be legitimacy to have safeguards in place to ensure voter integrity in the future. Essentially, it is important to ensure that there is not even the appearance of voter fraud. The appearance is a concept that is utilized both in governmental and corporate settings.
While voter fraud may appear to be a right extremist irrationality, it has been fueled by comments on the left as well. I remember when the police raided a currency exchange for selling fake identification, an undocumented worker saying to a news reporter, “The government will pay for this. We will vote them out of office!” Comments like that lends itself to confirmation bias. People who fear that voting fraud is diluting their vote will latch onto isolated statements that confirm their beliefs and ignore the data that demonstrates that voting fraud is practically non-existent. The anecdote will be used as an example that undocumented workers are voting in elections. The statistical facts will be ignored.
The question then becomes not whether to have identification, but how accessible and affordable is the identification. The key issue is to ensure that everyone who has the right to vote have equal access to the vote. Safeguards should be assessed and instituted in a fashion that does not impede rightful accessibility to the vote.
DEI Difference in the Boardroom
Having a DEI perspective, which respects the rights of all the stakeholders, sees everyone as us and does not look to demonize or polarize. It is good to have DEI in the boardroom, especially as corporations are being judged on their corporate social responsibility and their stance on social justice. Corporations are being asked to use their influence to impact social justice—not in a knee jerk reaction, but with thoughtful analysis.
Let me share that after the killing of George Floyd, I brought together a group of Black professionals, to address social justice and equity in government and in corporations. We called the group Equity Rising. We believed that DEI expertise is essential to the total sustainability strategy of corporations and, therefore, is an essential boardroom function. We believed DEI expertise brings both demographic and functional diversification of board members. Since the DEI function is populated primarily by people of color and women, DEI experts would help establish a critical mass of women and people of color on the board. In addition, DEI experts would provide a social conscience perspective desired by stakeholders and prospective shareholders.
Equity Rising believes it is important to have a two-prong approach holding both corporations and government entities accountable for social justice and equity. The Georgia law controversy reinforces the belief that in these transformational times stakeholders and shareholders expect equity to impact corporate decisions. Social justice and equity are not a political stance. Social justice and equity guarantee stakeholders and shareholders that the corporation stands by its corporate values.
Because of Equity Rising’s two prong approach, Kevin Price, the CEO of the National Institute for Economic Development (The Institute), has invited Equity Rising to be a part of their Professional Services. “The Institute — the only organization of its kind in the country — offers 33 years of experience helping clients harness the power of diversity to achieve business and economic objectives.” By acting as DEI advisors to corporate boards and C-suites, Equity Rising may assist corporation in ‘walking the talk’ by utilizing a reciprocity of respect strategically. To live a value of respect and inclusion, corporations need to know where their line is in the sand both on the right and the left. Going back to the Georgia law, it is important to address both the accessibility to vote and the fears regarding the integrity of the vote. Home – The Institute (theinstitutenc.org)
Stakeholders are demanding solutions to build a more just and equitable world. They expect corporations to support fairness and inclusion. Equity Rising has been extremely fortunate to know James D. White, former CEO of Jamba Juice, who has a strong commitment to social justice and DEI. Mr. White sees Equity Rising as a brain trust. He has invited Equity Rising to assist in helping organizations and corporations move towards social equity and justice. In order to move forward, I strongly believe we must use the traffic circle analogy of reciprocity of respect, otherwise we will be in a traffic jam of inertia at best or constantly crashing and still going nowhere.
In addition, Mr. White introduced me to the Mill Road Progressive Governance Fund (“MRPG”) sponsored by Mill Road Capital. MRPG’s has a unique strategy that is neither passive nor confrontational. MRPG is a “Sponsoring Investor” fund with an initial target of $500 million that will seek board seats and positively engage management to create economic and social value for shareholders and a diverse and inclusive culture. MRPG will nominate a minimum of 50% of women or people of color for board directors. Using this strategy, MRPG will bring more diverse viewpoints in making corporate decisions. (Mill Road Capital Launches Progressive Governance Fund to Improve Governance and Diversity in Small Public Companies | Business Wire )
Thomas Lynch, Senior Managing Director and Founder of Mill Road Capital and the Mill Road team have welcomed James D. White as a Managing Director and the Head of Board Governance and Diversity Initiatives and have welcomed me as an Advisory Committee board member to move the MRPG strategy forward. I will be bringing my DEI expertise to help create economic and social value for shareholders and a diverse and inclusive culture for organizations. Ideally, this model will be copied, and corporations will have more diverse boards and more social impact. The increase of board diversity and a broadening of the board perspective may allow corporations to be seen as allies by jurisdictions. Working with a reciprocity of respect, they may be able to resolve the problem before it begins.
Image: danielle-cerullo on unsplash