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ACC: Legal Should Lead on Diversity

2020 has been a year unlike any other. In addition to the COVID-19 pandemic, we continue to see society attempt to come to terms with pervasive social and racial injustice. The public is increasingly looking at how businesses are reacting to these unique and complicated issues. The quality of a product or the health of a balance sheet is no longer enough to satisfy customers and investors.

Veta T. RIchardson, President & CEO, Association of Corporate Counsel

The role of business in society is evolving, and business is having to adapt. In the midst of this shifting environment, one thing is very clear – implementing a diverse and inclusive corporate culture is both imperative and necessary to move forward successfully.

The Price We Pay for Lack of Diversity and Inclusion

Ask yourself: when your customers and members of the communities in which you operate look at your organization, what do they see? Do they see an organization comprised of individuals who reflect their diversity? These questions cut to the core of the challenges business face today. Pressure from employees, customers, investors, government, and society is mounting to push the corporate sector to consider the interests of all stakeholders, not just the financial interests of shareholders. A critical component of this shift in focus is the expectation that companies must reflect the communities they serve, and strive to promote and protect their interests.

The price for marginalizing diversity and inclusion is simply too high to ignore. A recently published report from Citi found that racial inequality and discrimination cost the U.S. economy $16 trillion over the last two decades, and the cost was not just borne by racial minorities—it impacted all of us. But the report further emphasized that if we act today to close racial inequality gaps, $5 trillion could be added to our economy over the next five years.  From social media to Wall Street, consumers and investors are paying close attention and using their purchasing power to reward or punish corporations not only for the stands they take, but also for the ones they fail to take. Indeed, apart from being morally right, the financial benefits of diversity and inclusion are well established. The business case is strong, and reports like Citi’s amplify the urgency to act. Let’s shift the focus away from justifying the “why” and instead focus now on the “how.”

A Wake-Up Call and Paradigm Shift

Before venturing too deeply into the “how,” I’d like to offer a wake-up call to all executives who may have become so comfortable with the lack of diversity surrounding them that they fail to see it—or worse, offer rationales that ring more like hollow excuses. I would like to attempt to shift the paradigm that we’re accustomed to for a moment. I am the chief executive officer of a global professional society. Imagine that as a Black woman, I conducted myself like many corporate executives. Imagine that I hired and promoted only other women who look like me, and surrounded myself with direct reports who were exclusively African American women, that I only offered my time to mentor African American women, helping ensure they understand the “inside rules” of the organization’s culture, and only they are put in the prime positions for visibility, to excel, and be advanced to the C-suite – while most others (except perhaps, one or two token Whites) would be left to stumble. My jokes, cultural references, and social connections would be relevant to only those steeped in African American culture. Others might feel excluded, unheard, unmotivated, and perhaps even insulted sometimes by my questions, language, and actions.

Yet we know that many corporate executives and boards of directors continue to operate this way, and fail to provide the necessary oversight to change that status quo. Does that sound like an effective model for leadership? It most certainly does not. If all CEOs have the freedom to choose our own executive teams, is it time we call out those who choose not to work with diverse executives? And we must require more than “diversity of thought” – this means inclusion of Blacks and other underrepresented groups whose experiences are markedly different.

Choices: Who Will Lead and What to Do?

So, what steps can be taken to tackle such a systemic problem? First and foremost, it will require outspoken advocates for change. I believe that chief legal officers (CLOs) – the global network of executives that my association represents – are well-suited to serve as the moral compass of the corporation, and are well-equipped to help lead the charge on diversity and inclusion initiatives. If that’s not enough, they are also in the best position to highlight what is at stake from a legal and risk perspective. Finally, the legal department’s influence often extends through every department of the company. From the CLO’s seat at the executive table, to working closely on business strategy, procurement and supply-chain issues, and consulting with HR on staffing and compensation policies, no other department has the broad scope, charge, and reach of legal.

In order for the legal department to be a beacon for diversity for the rest of the organization, the right personality has to be at the helm. Of course the CLO must have a high IQ, but an even higher EQ is essential, along with superior communication skills and media savvy. As leaders of the legal department, CLOs must be willing to look critically at the status quo, resist the temptation to be bound by precedent, and indeed seek to transcend that precedent. This will be especially difficult when facing institutional indifference, or worse, resistance. The scope of challenges underscores the importance of selecting the right leaders for the right job. A corporate culture embracing the importance of diversity and inclusion must be set at the top and chief executives, boards, and human resources officers need the general counsel as their ally for change.

Even with the right top-level support and a capable CLO to help lead the charge, the journey to a truly diverse and inclusive work environment is a difficult one. Let’s outline a few of the biggest challenges, and offer some perspectives on how to overcome them.

Perhaps the most obvious obstacle to tackle is deciding where to start. Although there is no universal answer, it is usually best practice to start with an express statement outlining the department or organization’s commitment to diversity and inclusion. This statement sets the tone for the journey and ensures you, as a leader, will be held accountable for following through.

The next step is to be clear about which voices are absent or underrepresented at the table, and then be proactive about the steps you will take to bring greater diversity to the table. These steps may entail longer search times and expanded outreach to diverse candidates, including through development of relationships with minority professional societies. It is not always straightforward to attract diverse talent. This is especially true in regions where the local talent pool is not diverse and in areas outside of major cities. In such a situation, work with human resources to offer flexible working conditions, telecommuting, or adjustable work hours. Revise job descriptions, and rethink how job openings are advertised, or from where candidates are recruited.

This article is part of a series for the Ethisphere Equity and Social Justice Initiative, convened to share leading practices, resources, case studies, conversations, and shared experiences from global companies and leaders. The Association of Corporate Counsel is a partner of Ethisphere’s in this initiative.

Establish Timelines, Set Goals, Measure Results

This is often easier said than done, and leaders should avoid using templates or marketing-orientated statements. Instead, leaders should take the time to work directly with their teams, explore the current status quo and solicit views and guidance on the diversity initiatives to be undertaken, so that the team takes greater ownership and responsibility for achieving results. Be sure to establish a timeline and metrics for your diversity and inclusion initiatives, and measure your successes and your failures. Celebrate and share the successes, revamp and be resilient through the failures.

As leaders, we must acknowledge the inclination to hire teams that reflect ourselves. Instead, adopt a completely different mindset. Leaders must be purposeful in assembling teams who look and think differently than we do. As a natural next step, it is imperative for leaders to then listen and learn from this diversity of culture, experience, and thought.

It is also important to note that diverse hiring is but one half of the journey to inclusion; sustained professional development is another. Diverse candidates may require additional mentorship to really feel part of the team. Be intentional about onboarding diverse hires. Support diverse employees to feel welcome expressing their culture, safe expressing gender identity, and comfortable sharing their experiences in the workplace. Empower direct reports and other leaders within the legal department to encourage sharing diverse perspectives. This doesn’t have to be complicated—even simple gestures go a long way.

Don’t Take it Personally, Engage Others, and Press On

Finally, diversity and inclusion initiatives should not be approached as a solo personal goal or a side project. It is essential to set goals, track progress, measure results, and report out the results to the organization. In other words, CLOs should quantify efforts. To go even further, tie compensation to attainment of these quantifiable results. Convincing or requiring other C-suite executives to do the same will bring about organization-wide change.

Making progress on diversity and inclusion initiatives is sometimes just outright hard. Expect that you’ll sometimes be met with resistance. Having met with hundreds of companies and law firms seeking to strengthen their D&I efforts and results, more often than not I have found that the many challenges are the result of inertia, and not knowing where to start or what to do next. Have courage and jump in. There has never been a better time for business to be on the right side of history. The stakes have never been higher and the potential rewards have never been richer!

About the Expert:

Veta T. Richardson is president and CEO of the Association of Corporate Counsel (ACC), a global nonprofit association for in-house counsel. She brings more than two decades experience as an advocate and global thought leader on diversity and inclusion, including having served as an advisor to three U.S. presidential administrations (Clinton, Bush, Obama). She is a board member at the John L. Weinberg Center for Corporate Governance at the University of Delaware, an NACD Fellow and Adjunct Professor of Law at Georgetown. Ms. Richardson also serves on Ethisphere’s Strategic Advisory Board and is enthused to contribute as a member of the advisory council for the recently launched “Ethisphere Initiative for Equity and Social Justice.”

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