Advancing equity in and beyond the workplace

By Janet Foutty

Business leaders have come to understand the importance of cultivating inclusion while simultaneously increasing diversity. But, too often, we downplay the most important part of the equation: equity.

When we focus only on the “D” and “I” in DE&I (diversity, equity, and inclusion), we sometimes mistake steps in the right direction for measurable change. As a boardroom example, the latest Missing Pieces report (published by the Alliance for Board Diversity, in collaboration with Deloitte) documents a notable increase in gender diversity on Fortune 500 boards.

White women made the largest strides in overall board seats held, gaining 209—or a 20.6 percent increase—from 2018 to 2020. But their success seems to have come at the expense of larger, more intersectional board diversity: Black women’s board representation grew by only six seats from 2018 to 2020, down from the 13-seat increase between 2016 and 2018. There was also minimal progress for most other race, ethnicity, and gender combinations.

As a measurable, meaningful outcome of dismantling systems of bias, oppression, and racism, equity is key to making progress, in addition to pursuing diversity and inclusion. As Deloitte recently explored in The Equity Imperative, equity can also create business value.

Boards hold an incredible amount of influence in driving equity—which means that bold, sustainable progress is possible when board leaders commit to action. They can get started by exploring how to advance equity within each of their organizations’ spheres of influence: the workforce, the marketplace, and society.

The workforce
There’s a common misconception that workplaces struggle with diversity due to a lack of available talent. For many workplaces, this appears at odds with data showing non-white workers are more likely to be underemployed than their white counterparts.

To actively build systems that drive equity, boards need to take a hard look at their talent data—and then disaggregate it. They should ask meaningful questions that can give them an accurate picture of DE&I in their workplaces and that can help them identify the sources of the inequities they find. It’s not enough to know how many members of marginalized communities are in leadership positions; boards must also ask themselves, “What are the demographics of the people in positions of influence? Where and why is our company falling short in the retention and career advancement of specific demographic groups?” Boards can then encourage management to orchestrate transformative change that will result in real gains in equity throughout the cultures and value chains of their organizations.

The marketplace
Less than one-fourth of businesses invest in products and services that promote racial equity, according to a Fortune and Deloitte survey of more than 125 leading CEOs representing more than 15 industries. When companies leave equity out of their financial decisions, the products and services they deliver can inadvertently perpetuate systems of bias. Take, for example, unintentional bias that may get baked into artificial intelligence applications.

Boards can challenge the way organizations spend their dollars in the supply chain, in mergers and acquisitions (M&A), and in the products and services they deliver to create solutions that promote equity. This year, my own board created a subcommittee to review M&A activity by asking questions such as, “Will these acquisitions be accreditive or dilutive to our DE&I goals?”

Society
While governments can set the standards for social change that companies adhere to, it’s up to businesses to break the ceilings and actively drive this change. Industry coalitions can have a large impact on policy and allow companies to make relatively quick progress in their communities.

For example, research has shown that economic inequities lead to distinct health, financial, and educational impacts on the lives of Black individuals. Organizations can make intentional investments in Black communities and businesses through coalitions such as OneTen, which is working to hire, advance, and upskill one million Black people over the next 10 years.

Boards can shift their focus from driving shareholder returns to driving value for all stakeholders, including customers, employees, shareholders, and society, while increasing company value—and social good. They should approach DE&I with an integrated, continuously supported strategy and a measurable, rigorous approach. Expanding the notion of board responsibility can drastically improve outcomes for historically and systemically marginalized individuals. That’s equity-supportive governance.