Two recent developments caught the DEI world by storm.
1. Microsoft laid off its DEI team
2. John Deere rejected DEI policies
These are just two examples of large multinational firms that decided to put profits before people.
Sadly, the number of enterprises side-lining DEI teams, casually rejecting policies, and scrapping DEI teams is on the rise. The issue came to the limelight because two major organizations, each a giant in its industry segment, decided to lean on DEI.
Globally, similar reports by many organizations going slow on DEI are coming out.
Corporate reality:
Although consolidated data on the issue is yet to be established, the trend is contrary to DEI reports by leading market analysis and advisory companies.
Market analyst reports indicate that most corporates have a DEI strategy in place and that these organizations are faring better in the ESG Index.
For example, recent S&P 1500 data shows that firms with diverse leadership consistently earn higher environmental ratings from MSCI, an ESG data provider in the United States.
The scenario is not so different at home in India. Several conversations with leading CXOs and decision-makers in large corporates across industry verticals reveal that these enterprises lag in DEI.
This is not because they do not have the necessary strategy or policy in place, but because revenues, business, and investors take center stage. And the two events are not harmonious.
Cover-ups?
“It is more about corporate culture. We have started implementing DEI, but that is more towards women empowerment,” a leading CXO told me.
Another corporate consultant asked to survey a client’s employee satisfaction index for DEI was gently warned against asking probing questions. He framed the questions in such a manner that the responses were indexed on a scale of 1 to 10. Needlessly to say, there was no qualitative analysis or follow-ups. The company proudly presented its DEI report in the ESG and integrated components of the annual report.
The World Economic Forum’s Global Gender Gap score in 2023 stands at 68.4%, with India ranking 127 out of 146 countries in terms of gender parity.
These frank admissions coincide with the recent findings of the WriteCanvas-ASSOCHAM survey. The survey reveals that the social component of which DEI is a formidable part is most often subsumed with CSR, governance, and environment. Three aspects stand out:
· Corporates equate gender equality with DEI. Nonetheless, women’s representation at the board level was marginalized
· Corporates have all the necessary DEI policies covered under the Company’s Act and global mandates in place. The reality is that not many have adequate physical and digital infrastructure for persons with disabilities.
· Community development, equal access and opportunity, and child labor are gaining ground as part of CSR activities.
Are things turning around in India?
The Companies Act and SEBI mandate women’s representation on Indian boards, leading to remarkable growth in women’s participation on boards.
CareEdge advisory analyzed the top 1000 companies’ board composition from a diversity perspective, observing upticks in the top 150 listed companies and trends in big manufacturing organizations prioritizing inclusion of different genders and persons with disabilities, observes Swati Agrawal, President CareAnalytics.
However, there is no focused regulation or policy regarding Diversity, Equity, and Inclusion (DEI) in India. The focus must be on addressing gender gaps and gender equality, while sustainability reporting focuses on gender gaps and gender equality. The industry must offer employment opportunities and address the banking requirements for employees and customers.
The change can be brought about just in the manner in which the shareholders are forcing corporates to consider environmental concerns to fight climate change. They must closely monitor how corporates implement DEI and ensure that the organizations are not just tick-boxing against all the parameters!
My take:
I believe that DEI adoption in its entirety will take a while. India is at the cusp of implementing DEI. Globally, enterprises are at least taking a small step towards diversity, equity, and inclusion.
Many organizations have promptly begun back-to-work policies for women. This is certainly a positive step. The shift is happening in the corporate sector, and that is a start.
Moreover, business leaders, stakeholders, and shareholders should understand that DEI is not just about improving diversity, but embracing the host of benefits that come along with it.
But there is also a nagging fear. Are Microsoft, John Deere and the ilk setting a precedent? Providing impetus to organizations to exploit loopholes and circumvent the regulations?