Society public company members across company sizes and industries* responding to the most recent Society/Deloitte Board Practices Quarterly survey: “Diversity, equity, inclusion: One year later” provided insights on how board and corporate DE&I practices have evolved over the past year since our September 2020 inaugural report in the context of ongoing calls for real change in response to last year’s widely publicized and condemned events surrounding systemic racism and racial equality.
Information provided to the board – Compared to 2020, all respondents across company sizes reported providing more information to the board on DE&I-related company practices, strategy, and performance. As was the case in 2020, most companies provide information about the company’s overall diversity and inclusion strategy and progress against that strategy, as well as diversity metrics. More than half provide inclusion metrics, compared to just 41% in 2020.
Frequency on the board/committee agenda – DE&I-related matters are most commonly on the full board agenda annually and/or the Nom/Gov Committee agenda on an as-needed basis.
Actions taken/intended to be taken – All respondents across company sizes reported having taken at least two of the enumerated actions in response to the widely publicized events of 2020 and ongoing developments surrounding racial inequality and inequity, with larger companies tending to have taken more actions and smaller companies tending to target additional actions to be taken in the future.
All large-cap respondents said their company had hired a Chief Diversity Officer (or similar position) or elevated a role currently in place, compared to 90% of mid-caps and 0% of small-caps.
Board recruitment priorities – Companies overall identified race and ethnicity as the top recruitment priority for those looking to increase their board’s diversity, followed by specific professional skills or experience, and then gender.
Director candidate sources – Boards looking to increase their diversity look primarily to referrals from board members and to search firms to recruit candidates.
DE&I training/education – A plurality of companies conduct informal board training on DE&I; however, more than 40% have not provided any DE&I board training or education.
DE&I pay metrics – More than 40% of companies are considering including one or more DEI metrics in their executive incentive plans and another nearly 25% are not currently considering it. The balance have included at least one quantitative or qualitative DE&I metric in their short-term or long-term incentive plans.
*Public company respondent market capitalization as of December 2020: 50% large-cap (which includes mega- and large-cap) (> $10 billion); 37% mid-cap ($2 billion to $10 billion); and 13% small-cap (includes small-, micro-, and nano-cap) (<$2 billion). Private company respondent annual revenue as of December 2020: 42% large (> $1 billion); 17% medium ($250 million to $1 billion); 33% small (<$250 million); and 8% not able to share. Respondent industry breakdown: 33% consumer; 29% energy, resources, and industrials; 22% financial services; 9% life sciences and health care; and 7% technology, media, and telecommunications. Responses tended to vary by company size. Access the survey results online and by company size here.
Access additional resources on our Racial Equality & Diversity Human Capital/Workforce Management and Board Practices/Governance Practices pages.
This post first appeared in the weekly Society Alert!