As with climate change, diversity, equity and inclusion (DEI), with its goals of broad representation, fair pay and equal opportunity have become the lens through which investors are judging both managers’ investment selections and their internal DEI efforts.
And as with environmental sustainability, more DEI attention has driven global policy making and regulation towards disrupting the status quo. Numerous markets in Europe now employ gender quotas for company boards. In the US, the SEC recently approved NASDAQ’s proposal for listed companies to disclose board demographics and meet minimum diversity tests.
These efforts, as we’ve outlined in the series, whether policy or market driven, are not without controversy and unintended consequences.
With intense pressure on corporations to demonstrate commitment to diverse workforces and equal opportunity, talent pipelines become critical. This is challenging at senior management and board levels, where women and candidates of color have historically comprised a minority. Companies are often vying for concentrated pools of eligible and qualified professionals.