The Diversity, Equity & Inclusion Imperative for

Boards

Dr. Terri Cooper, Deloitte US

Boards have been working for years to improve
diversity in their own ranks. Driving diversity
should continue to be a priority. However,
focusing on diversity without inclusion isn’t
enough.
What words come to mind when you hear the
word DIVERSITY?
What words come to mind when you hear the
word INCLUSION?
 Terminology: Diversity

re
nd
Ge
Race
ility Age
Ethnicity
lity

Culture
Social
Physical Ab

Status
h

Religion
na

lt
Wea
tio
Na

Learning Style
Values Heritage
Role/ Function
Life Experiences Diversity
Skills Languages The presence of people who, as a group, have a wide
Political Views
Sexual Styl
e us range of characteristics, seen and unseen, which they
tion king Stat
Orienta Thin Fam
il y
were born or have acquired
Work Style Gender Identity s
ngth ctives
nts

Personality
Stre Perspe
Tale

Profile
Education
Military Status Mental Health
Beliefs
Purpose

Birth Order Needs/

Citizenship Expectations
Interests/
Terminology: Inclusion

Inclusion is the practice of making all members of an

organization feel welcome and giving them equal opportunity
to connect, belong, and grow—to contribute to the
organization, advance their skill sets and careers, and feel
comfortable and confident being their authentic selves
 Diversity and inclusion lead to better business outcomes
Diversity of thought leads to: Diversity+inclusion=better business outcomes Inclusive leaders cast a long shadows

Organizations with inclusive cultures are:

Inclusive leaders

A wellspring of creativity,
diversity of thought
increases innovation by
Individual feelings of inclusion
as likely to meet or
20% exceed financial
targets as likely to be high-
performing
70%
increase in experiences of fairness, respect, value, and
belonging; psychological safety;
and inspiration

Diversity of thought enables

teams to spot risks, reducing 30% Team performance
those by

more likely to be
innovative and agile more likely to achieve
17% 20% 29%
Increase in team Increase in Increase in team
better business outcomes performance decision-making quality collaboration
Inclusion is often essential for attracting, engaging, and retaining
today’s workforce

80% 39% 23%

of respondents indicated inclusion is of respondents reported they would of respondents indicated they have
important when choosing an leave their current organization for a already left an organization for a
employer more more inclusive one
inclusive one

*Note: The information presented on this presentation is based upon 1,300 US professionals of all levels, ages, genders, races, ethnicities, and sexual orientation. For a description of the full
methodology, please refer to the paper on www.deloitte.com/us/unleashing-inclusion
Boards have the potential to influence diversity,
equity & inclusion and a responsibility to do so –
for the sake of the organization and employees,
as well as the shareholders.
Shifting to a governance mindset
Chart a clear way forward that embeds inclusion into every facet
of the organization’s work, workforce, and workplace

Influencing inclusion
The board’s responsibilities in five key areas:

Strategy

Governance

Talent

Integrity

Performance
 “Boards don’t run the company
—they govern. Boards can ask
questions about the culture,
whether or not it’s equitable
STRATEGY and inclusive, and how to
support an inclusive culture
with the business strategy.
That’s the board’s job.”
— Director,
Various Fortune 500 organizations
How boards can ingrain inclusion into their organizational strategy
Understand Take action

1 The organization’s working definition of inclusion and it’s

vision for an inclusive culture
• Align with management on the definition of inclusion
• Validate management’s inclusion vision, strategies, and goals
• Provide input to shape or enhance the vision, strategies and goals

2 Whether the business strategy reflects inclusion • Provide input for improvements to the business strategies to best align
with the inclusion vision, strategies and goals

3 What the organization is doing to advance inclusion, and

where it is making progress
• Seek to understand the organizations inclusion maturity level
• Request information to provide guidance on addressing gaps

4 Existing enablers and barriers to an inclusive culture • Stay aware of the organizations enablers and barriers
• Evaluate and approve approaches to promoting enablers and breaking
down barriers
 “To truly embody and govern
inclusion, the board should
reflect the diversity of [the
organization’s] customer base
in its composition, create an
GOVERNANCE inclusive culture within the
boardroom itself, and integrate
equitable and inclusive thinking
and behaviors into all of the
ways that the board operates.”
— Trudy Bourgeois,
Founder and CEO, Center for Workforce Excellence
How boards can ingrain inclusion into the way they govern
Understand Take action

1 How decisions are made, and how inclusion is factored into

those decisions
• Consider both diversity and inclusion implications when making decisions
• Ensure that all board members involved in the decision-making process
are heard and respected

2 Whether board committee charters lay the foundation for

inclusive behaviors in all relevant processes
• Embed inclusive language, thinking, and actions into all relevant
proceedings and practices

3 How the board can best foster or enhance inclusion

through operating principles and behaviors
• Assess inclusion governance practices and develop a plan to embed
inclusion into all board processes
• Consider forming an inclusion-specific committee or designating an
inclusion champion within the board as a starting point

4 Whether data informing the board’s operations and

decisions comes from a diverse set of sources
• Avoid confirmation bias by challenging management to seek out
accurate information and research from multiple, diverse sources and
perspectives
 “Where the board can
influence inclusion is in asking
questions like, ‘What is
[management] doing to ensure
that people at all levels and of
TALENT all backgrounds have an
opportunity to be developed
and mentored into the senior
management levels?”
— General Lester Lyles (USAF retired),
Chairman, USAA and director, General Dynamics and
NASA
How boards can help foster inclusive talent
Understand Take action

1 How inclusive leadership traits are built into roles and

expectations for senior leaders
• Challenge management to set clear expectations for senior and
executive leaders around inclusive leadership
• Use similar criteria to evaluate the CEO and board members

2 How inclusion is built into the leadership succession plans • Prioritize diversity, equity and inclusion lens in succession planning
• Select inclusive leaders for key positions and encourage management
to do the same

3 How inclusion goals are built into leadership and

workforce development
• Support management in training leaders and employees on
inclusiveness, and help identify experiential gaps
• If needed, suggest new positions specifically focused on driving
inclusion strategy

4 How leaders, employees, and the board are being trained

on inclusive behaviors
• Influence diversity, equity and inclusion education strategy, including a
focus on bias mitigation, and set the tone for the importance of such
education by having board members participate in education initiatives
Six signature traits of inclusive leaders
Board members can model these traits and encourage management to set these same traits as formal competencies for
senior leaders
Cognizance
Because bias is a leader’s Achilles heel
As a board member:
Be aware of personal biases and develop
systems to mitigate the impact of those biases
Courage
Because talking about imperfections involves
personal risk-taking
As a board member:
Share with others your strengths and
development areas to role model humility
Commitment
Because staying the course is hard
As a board member:
Commit to demonstrating inclusive leadership
personally, and to holding fellow board
members and the organization accountable
Curiosity
Because bias is a leader’s Achilles heel
As a board member:
Ask questions to avoid assumptions.
Wonder how the definition of success may
be broadened
Cultural intelligence
Because not everyone sees the world
through the same cultural frame
As a board member:
Acknowledge difference as a strength, and
make decisions through an empathetic lens
Collaboration
Because a diverse-thinking team is greater than the
sum of its parts
As a board member:
Proactively collaborate with fellow directors and with
management, and promote collaboration among
diverse individuals across the organization
 “When boards think and act
inclusively, it sends a very
clear message [about] what’s
INTEGRITY important to the company.”
— Billie Williamson,
Director, Kraton Corporation, Cushman & Wakefield,
and Pentair
How boards can frame inclusion as a matter of integrity
Understand Take action

1 The organization’s inclusion brand externally, and how it

is manifested
• Help management strengthen the organization’s external inclusion brand,
and advise management on any associated risk and areas for
improvement

2 How the board, management, and other leaders speak

about and embody inclusion, both internally and
• Actively embody inclusive leadership behaviors and traits in all personal
and professional interactions
externally

3 Employees’ perceptions of diversity, equity & inclusion • Challenge management to implement ongoing measures to effectively
assess employee perception of diversity, equity and inclusion at the
organization, as it is a critical business driver

4 What the organization’s alliances, clients, or vendors

convey about its stance on inclusion
• Understand how key stakeholders within the organization’s value chain
approach, manage, and promote inclusion, and consider how that aligns
with, and may affect, the organization’s own commitment to inclusion
 “[Driving] inclusion has to be a
shared responsibility, but the
roles are different.
Management executes and
advances the [inclusion]
PERFORMANCE mission, and the board holds
management and the
organization accountable to
that mission.”
— Sheila Penrose,
Chairman, Jones Lang LaSalle Inc. and director,
McDonald’s Corporation
How boards can monitor the organization’s inclusion performance
Understand Take action

1 Metrics in place to measure the effectiveness of the

organization’s diversity, equity and inclusion efforts and to
• Influence the types of metrics used to track the progress and outcomes
• Prioritize inclusion on the board agenda regularly discussing progress
identify gaps

2 How inclusive behaviors and outcomes recognized at the

individual and organizational levels and how non-inclusive
behaviors are addressed
• Publicly and purposefully celebrate improvements in inclusion, and
reward individuals who embody inclusive leadership
• Develop corrective actions and plans in concert with management to
correct or mitigate non-inclusive behaviors

3 How the organization is pursuing continuous

improvements to enhance its own inclusive practices and
• Challenge management to implement ongoing measures to effectively
assess employee perception of inclusion at the organization, as it is a
outcomes critical business driver
The inclusion governance maturity spectrum helps us map where they are
today and where we want to move to in the future
5

The INCLUSIVE board

1 board understands the
The COMPLIANT board
seeks to avoid legal risks and
does not pursue an inclusion
strategy with management
or actively promote inclusive
boardroom behaviors.
2 formally embeds inclusion
The EMERGENT board
recognizes the importance of
D&I but believes D&I fall
entirely under the purview of
management. An inclusion
strategy may be in place, but
the board has little or no
influence.
The EMBRACING board
sees the value of inclusion
governance but may not
currently govern in such a
way or actively seek to do
so. The board values the
inclusion strategy but sees it
as separate from its business
strategy.
The COLLABORATIVE
importance of inclusion
governance, demonstrates
ability to practice it, but
may not have explicitly
documented expectations
on how to carry it out. The
board governs the inclusion
strategy as core to the
business strategy.
expectations in the board’s
charters, consistently
governs through an
inclusion lens, and regularly
challenges and supports
management in enhancing
the organization’s D&I
efforts and progress. The
board governs the inclusion
strategy as core to the
business strategy.
Polling Question : Where do you think your board is today on this
spectrum?

1. Compliant
2. Emergent
3. Embracing
4. Collaborative
5. Inclusive
What the board can do now
 Strategy
Understand the organization’s current diversity, equity and
inclusion environment “The endgame is inclusion, and
 Talent
Educate yourself on inclusion and inclusive governance
that is how you come up with
 Governance better results and better
Begin embedding inclusion into all board processes
 Integrity
solutions for shareholders”
With management, concretely define what inclusion means — Director,
and what behaviors support it Fortune 500 petroleum company
 Performance
Begin prioritizing inclusion as a strategic imperative on the
board’s agenda, and monitor relevant metrics