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Learn how to make the business case for diversity, October 25-27.
Diversity efforts lead to better recruiting, business outcomes
NEW YORK—Diversity and inclusion (D&I) are good for business, according to speakers at the recent Commit!Forum conference presented by Corporate Responsibility Magazine on Oct. 8.
“Homogeneity is a buzzkill,” said Kathy Hopinkah Hannan, national managing partner of diversity and corporate responsibility for KPMG. “Status quo is not good enough anymore. We need to be constantly changing and challenging ourselves. And certainly from a D&I perspective, that’s a great opportunity.”
Speakers noted that today’s companies operate in a highly global environment with shifting and disruptive technologies that have accelerated the pace of change.
Many said that from a growth and innovation standpoint, it’s critical that employees and leadership at all levels—including boards—reflect the diversity of customers and buyers in the marketplace.
Attracting Talent and Driving Retention
Phyllis A. James, MGM Resorts International executive vice president, special counsel for litigation and chief diversity officer, noted that in 2000, her company was the first in the gaming and hospitality industry to “very overtly and publicly embrace diversity and inclusion as a value system.”
It’s not just “a feel-good thing,” but a business imperative that has helped the company reap “enormous dividends,” James said.
About 65 percent of MGM’s 62,000 employees are minorities. Diversity is viewed as a strength, not a weakness, and has helped with talent acquisition and retention, a boon in an increasingly competitive global economy, she added.
Opening New Customer Segments
D&I has helped open up new multicultural customer segments that MGM had not traditionally courted. More recently, it helped provide entrée into new jurisdictions where gaming is being authorized. James said in Prince George’s County, Md., which is predominantly African-American, MGM helped win a major initiative that authorized gaming in that county.
James said the local community backed the measure and MGM was able to help defeat oppositional movement against gaming “because we had the competitive advantage of a compelling diversity and inclusion initiative.”
Gender Equality Certification
During another session at the conference, Angela Guy, L'Oréal USA senior vice president of diversity and inclusion, said that diversity is critical to strategy at the Paris-based company. L'Oréal USA does business in 130 countries and has extensive—and diverse—products, talent and consumers, as well as suppliers and partners.
“We leverage that to drive inclusion, which we know ultimately drives innovation,” Guy said.
Guy admitted many think L’Oréal only focuses on woman, but said the company’s mission is ”beauty for all—and that’s men and women—but also making sure that our talent is representative of the consumers that we want … and the way we work.
In August 2014, L’Oréal USA became the first company in the U.S. to be certified in gender equality with the Economic Dividends for Gender Equality (EDGE), a program designed to create an optimal, balanced workplace for men and women.
“It doesn’t mean we’re equal on all fronts,” Guy explained. “It means that we take it seriously enough to measure it and to have plans in place to continue to drive it and to sustain it as an organization.”
The certification included a review of gender policies and practices, and analysis of gender data across the 10,000-employee U.S. workforce. L’Oréal surveyed more than 3,000 employees on gender equality relating to recruitment and promotion, leadership training and mentorship, flexible work, company culture and equal pay.
The company created a road map to continue progress that includes incorporating broader flexible work arrangements and continued development of leaders across both genders.
Board Diversity Matters
Bruce D. Murphy, executive vice president and head of corporate responsibility at KeyCorp, noted that his company is led by a female CEO, and has a growing number of women and minorities in high-level positions and on its board of directors.
In 2013, the company was an industry leader in stock performance and shareholder returns, which Murphy said suggests there’s something to the notion of the importance of having a diverse set of leaders “that not only collaborate, but can execute.”
Panelists at the Commit!Forum conference emphasized that a growing body of data shows having a diverse board of directors is good for the bottom line. Many cited Gender Diversity and Corporate Performance, the Credit Suisse Research Institute's August 2012 report of 2,360 global companies over a six-year period.
Among other revelations, the Credit Suisse researchers found that companies with at least one woman on their board of directors performed 17 to 26 percent better during the time period studied than companies with no women on their board.
Darla Stuckey, executive vice president and general counsel at the Society of Corporate Secretaries and Governance Professionals, noted that most board members are white men over the age of 50 who often know each other and travel in the same social circles. She said research has shown that board members who know each other well are less likely to “rock the boat” and “ask the tough questions” that can lead to innovation and new thinking.
Stuckey said more boards are requesting female candidates but said there have been some challenges to getting women on boards.
“I think some of the impediments are very sort of prosaic, like: ‘The search firms don’t bring us women,’ ” she said. Sometimes, female candidates don’t respond to headhunters. Maybe they’re too busy or not interested, Stuckey said, adding that nonetheless, “I think it is getting better and you have to keep trying.” In closing, Stuckey offered this advice: “If there are any women in this room who get approached by a search firm, please respond—even if you can’t do it.”
Pamela Babcock is a freelance writer based in the New York City area.
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