Safeguarding DEI: Navigating Legal Risks While Fostering Inclusion
In an environment where legal challenges to affirmative action are on the rise, businesses are seeking strategies to advance inclusion and equity while minimizing legal exposure. Recent lawsuits, like the one against Starbucks' diversity policies, underscore the need for caution. Despite the dismissal of such cases, a heightened risk of legal challenge remains, necessitating thoughtful approaches to Diversity, Equity, and Inclusion (DEI) efforts.
Legal Landscape and Risks
A recent lawsuit, filed on behalf of the National Center for Public Policy Research (which owned $6000 of Starbucks stock), challenged whether Starbucks’ policies involving setting goals for the hiring of BIPOC populations, awarding contracts to “diverse” suppliers and tying executive compensation to achieving those diversity goals amounted to racial discrimination.
The case was ultimately deemed “frivolous” by the court. The judge commented, “If the plaintiff doesn’t want to be invested in ‘woke’ corporate America, perhaps it should seek other investment opportunities rather than wasting this court’s time.”
Although this case was dismissed, it highlights and opens up the risk of greater legal scrutiny and challenges from organizations following Court rulings on race-conscious admissions programs in academia.
So what does this mean for you, your team, and your company? We’ll walk you through a few simple and sustainable ways to implement DEI initatives that can withstand outside pressures.
Five Strategies for Sustainable DEI
Inclusive by design, not exclusive. Design your leadership development, learning, talent, and performance review tools to be inclusive and equitable. That does not mean you have to exclude any specific group from the experiences offered. This may include:
Understand what gaps have typically been experienced by under-represented talent, and consider how you can bridge these gaps in the design of your learning programs. At Ceresa, we provide 360-degree feedback for everyone, dive into participants’ aspirations and purpose, ensure we have diverse representation in mentors, coaches, and experts, and design a curriculum that addresses the specific needs of under-represented talent, along with a broader curriculum. We also ensure schedules are convenient and personalized, to fit around individual’s commitments outside of work. Read more here about “inclusive by design” at Ceresa.
Ensure you are aware of the bias that comes up in subjective performance reviews, and create processes to eliminate that bias.
Do you have programs for high potential early career talent that allows them to gain new skills and leadership experience? Take the time to audit how individuals are nominated for those programs, and ensure there is not room for bias.
Collaborative Approach: View DEI efforts as collaborative endeavors involving employees across levels. Tailor initiatives to a company's unique diversity challenges, be it gender, race, or regional diversity.
Business Case & Transparency: Emphasize the business case for diversity. A 2020 McKinsey research found that the most diverse companies are now more likely to outperform their less diverse peers by 36 percent. According to a Catalyst study, Fortune 500 companies with female board members outperformed those with none on equity (ROE) by 53%. While explicit social justice reasons may motivate some, especially employees, in these areas, it is important to be clear on the business case as well. This is not a trade-off.
Education & Bias Awareness: Our brains are wired to use shortcuts that make our lives easier and our thought processes more efficient. The problem is the data we are exposed to in making those shortcuts is not always robust or representative. As a result, we all have biases built into our assumptions and thought processes. Promote understanding of personal biases and their effects on decision-making. Educate the workforce to recognize and rectify biases that influence perceptions and judgments.
Ongoing Adaptation: Acknowledge the dynamic nature of DEI efforts. Regularly assess the outcomes of policies, making adjustments to ensure fairness and inclusivity. Keep abreast of industry trends and legal developments to guide policy implementation.
A Balanced Approach
The dismissal of the Starbucks lawsuit underscores the importance of navigating DEI complexities adeptly. Companies must cultivate transparent, equitable, and inclusive policies across their talent functions that strike a balance between enabling inclusion and diversity while avoiding legal contention.
To learn more about cultivating impactful and inclusive leadership development within budgetary constraints, contact team@ceresa.com.
