The anti-racism movement sparked by the killing of George Floyd has made companies rethink their approach to diversity and inclusion, said speakers at IR Magazine’s Equality in IR Forum in July.
But companies must be prepared to make wholesale changes – and have uncomfortable conversations about how they have operated in the past – to truly improve opportunities for minority groups.
‘Some dynamics remain really stubborn,’ said Ripa Rashid, managing director and head of inclusion and diversity at Cowen. ‘That said, diversity and inclusion, particularly in the last eight weeks since the murder of Floyd, have entered the national and international consciousness in ways I haven’t seen in my lifetime.’
We need a ‘complete redesign of systems,’ said Lynn Antipas Tyson, executive director of investor relations at Ford Motor Company. ‘I do not believe we will get to where we need to go until that happens... Filling holes and gaps is not going to get us anywhere. It’s a complete rethink of how people move and advance through an organization and how we are going to value talent.’
The Equality in IR Forum, held virtually, featured a half-day of sessions focused on topics like diversity in the investment community, the role of companies in leading cultural change and career advice for IR professionals.
The event took place around two months after the death of Floyd, which led to huge Black Lives Matter protests across the US, and later the world. In light of the protests, many businesses put out statements condemning racism and pledging to tackle inequality.
During the forum, speakers discussed how confirmation bias affects recruitment decisions and works against diverse candidates.
‘Even thinking about who could do IR, there’s probably confirmation bias,’ said Tyson. ‘People have a tendency to lean toward hardcore finance people or strategy people. In the past, I’ve really liked to look within the organization to people who might be overlooked for a variety of reasons. As long as they have sheer intellectual horsepower and a fire in their belly, that’s who I want on the IR team. And interestingly, when I’ve done that, my team is more diverse than teams led by my finance peers.’
‘One thing we know from all the work in diversity and inclusion is that often it takes a little longer for diverse teams to gel,’ noted Rashid. ‘It takes a little longer for diverse skills to actually align, but you always get better results.’
While the focus is often on diversity and inclusion in the recruitment process, it’s just as important to look at advancement, said Betty Liu, chief experience officer at Intercontinental Exchange and executive vice chairman at NYSE.
‘There are all these biases of what worked before, and what will work again for that position,’ Liu said. ‘But that’s not normally going to be the path for women and minorities. Most of the time, they come from very wide, different backgrounds, and their positions are different, and they may not have that operational experience because they didn’t get it before.’
Panelists also discussed why, in the face of evidence that diversity is good for performance, companies are still reluctant to change.
There is overall recognition that diversity improves the bottom line, said Liu, but there is also a lot of inertia. ‘Who’s going to want to give up his or her board seat?’ she asked. ‘Who’s going to want to give up his or her paycheck to have a diverse candidate in his or her spot?’
Tyson said it’s difficult for companies to truly embrace change because it involves having difficult discussions. ‘A lot of what we’re going through, at Ford right now, post the murder of Floyd, is a lot of people are being pushed outside of their comfort zone,’ she said. ‘A lot of people have to grapple with their complicity in what has been going on, not only in corporate America, but also in society at large. And that’s a very hard thing for people to grapple with.’
How can companies think about becoming more diverse organizations? Rashid said no one has solved the problem yet, despite some companies implementing diversity and inclusion policies in the 1970s. But she said there are pockets of success that indicate ways to speed up the pace of change.
Rashid encouraged companies to think of it as a change strategy with three fundamental principles: one, having the right data and metrics; two, creating an environment that supports diversity and inclusion; and three, making senior management accountable.
‘Adopting diversity is a fundamental business strategy, like any other strategy, and putting resources and decision rights around it is critical,’ she said. ‘Are we all there yet? Not yet. But those are the principles.’
Click here to find out more about the Equality in IR Forum.