Art for Virtue by the Numbers.
Jon Skolnik,  September 17

Virtue by the Numbers

On the bad methodology of corporate diversity and inclusion indices

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If you were to randomly sample the websites of a hundred different multinational companies and guess which website belonged to which based solely on the looks of their Diversity & Inclusion pages, you’d be entering into a dizzying game of Photo Hunt. The homogeneity across these sections, which are now de rigueur, is staggering. Pictures of multi-ethnic hand-stacks, pride flags, buzzwords like “cultural agility”: these baubles are so commonplace within the corporate constellation of diversity and inclusion that it’s almost hard to believe the recency of their arrival.

During the 1960s and 1970s, the push for diversity in American offices was largely rooted in compliance. Soon after the passage of the Civil Rights Act of 1964, corporate America was beset by a rash of discrimination suits whose legal and public relations fiascos were no longer profitable to ignore. By the late 1980s, however, “the new rhetoric proclaimed that . . . compliance [was] different from diversity,” wrote Rohini Anand and Mary-Frances Winters in the Academy of Management and Education. The latter was now the goal. Rather than doing the legal minimum, “the philosophy was to make everyone more aware and sensitive to the needs and differences of others.” Out of this transition came modern diversity training, which sought to weed out implicit biases and guide decorum between coworkers. Because diversity training alone brought mixed results, corporations in the ’90s began integrating the idea of “inclusion” into their diversity initiatives, hoping to instill not only representation but equal opportunity and treatment within the workplace.

Since the aughts, “D&I,” as it’s now acronymized by corporate officialdom, has coalesced into an entire industry of its own, rapidly expanding with the pace of profit. D&I officers, D&I consultancies, and D&I tech vendors––all manifestations of capitalism’s unique knack for commodifying even the intangible––are now part and parcel of the corporate mise-en-scène. Corporate America’s strained moral posturing never fails to amuse. But its latest prop, the “D&I index,” stands far above the rest in its unabashed gamification of virtue.

D&I indices are financial reports that set out to estimate the overall egalitarianism displayed by some of the biggest multinationals in the world. By using a set of quantifiable criteria, these indices rank and score the highest-performing companies according to their respective levels of diversity and inclusion. 

Since the aughts, “D&I,” as it’s now acronymized by corporate officialdom, has coalesced into an entire industry of its own.

If you spool through the D&I section of Nestlé’s website, you’ll notice that Nestlé USA nabbed two 100 percent ratings on the 2019 and 2020 Human Rights Campaign’s corporate equality indices. This is in no small part due to Nestlé’s provision of trans-inclusive healthcare benefits, up to eighteen weeks of paid leave to primary caregivers, and equal benefits for married couples and domestic partners. Still, it’s a disconcerting stroke of irony that Nestlé, a company long maligned for its use of child slavery, would be given human rights accolades for anything. It’s not, however, a novel irony. After all, much ink has been spilled on how conversations surrounding workplace ethics are strangely removed from those about the ethics of the work itself. As one FAIR headline read, in response to the press’s approbation of a female-led military-industrial complex, “Bombing People Is Not Feminist, No Matter How You Spin It.”

What’s discussed less, however, are the flaws embedded in the methods by which corporations measure diversity and inclusion to begin with. While a high ranking from a D&I index suggests a relatively free and fair work environment from a management consultant’s point of view, it says nothing about the human dynamics between coworkers––a blind spot that grows increasingly noticeable as minority employees continue to air long-held grievances at companies which, despite their progressive branding, cultivate toxic work environments from within.

Consider the recent employee revolts at Pinterest, Refinery29, and Bustle. These companies, while touting feminist branding, women-led workforces, and strong commitments to diversity and inclusion, have all been rocked by allegations of racial discrimination. Demographic diversity and inclusive corporate policymaking alone do not ensure an equitable workplace, and D&I indices are but the logical result of corporate America’s unwillingness to grapple with this fact. Their rankings, rapaciously sought after and extolled by the corporate world, are doled out on the basis of reductionist methodologies that eschew worker-led conversations about privilege and power.

Numerous D&I indices have sprouted up within the last two decades, but the three best-known are put out by Refinitiv, Bloomberg, and the Human Rights Campaign (HRC). Bloomberg and the HRC focus primarily on diversity and inclusion with respect to gender and sexuality, while Refinitiv takes a more comprehensive approach by also addressing ethnicity, race, disabilities, and more. In any case, the essential premise is the same: diversity and inclusion should be measured by way of Excel. Some of Refinitiv’s criteria include:

  1. The percentage of employees with disabilities or special needs.
  2. The percentage of females on the board.
  3. The number of controversies published in the media linked to workforce diversity and opportunity (e.g. wages, promotion, discrimination and harassment).
  4. Has the company set targets or objectives to be achieved on diversity and equal opportunity?
  5. The percentage of employee satisfaction as reported by the company.

None of these data points are entirely useless by any means. Rather, the problem is that they shy away from nuance, coming as they do from a broad technocratic perspective blind to the minutiae of employee welfare. To address them one-by-one:

  1. Merely having employees with disabilities says nothing about their salaries, departmental distribution, rate of promotion, rate of retention, project/work assignments, and representation within management.
  2. The gender balance of a company board says nothing about the power dynamics of decision-making between its members.
  3. Not all controversies are equal in consequence or scale.
  4. A company setting objectives on diversity and inclusion has nothing to do with whether they’ve actually met them.
  5. The overall percentage of employee satisfaction says nothing about the relative satisfaction felt between demographic groups. Quantitative metrics like this also hand-wave qualitative discussions about what “satisfaction” even means.

The HRC’s methodology puts a stronger emphasis on workplace protections. Still, in many categories, it bears a striking resemblance to Refintiv’s in its vague, one-dimensional analysis. Here are some of its criteria:

  1. Supervisors undergo training that includes gender identity and sexual orientation as discrete topics (may be part of a broader training), and provides definitions or scenarios illustrating the policy for each.
  2. Anonymous employee engagement or climate surveys conducted on an annual or biennial basis allow employees the option to identify as LGBTQ.
  3. Data collection forms that include employee race, ethnicity, gender, military and disability status—typically recorded as part of employee records—include optional questions on sexual orientation and gender identity. 

Again, none of these initiatives are trivial in theory. But we are left to wonder how they actually play out at a cultural level within the workplace. For example:

  1. What does this “training” look like? Who conducts it? How is its success measured? These are questions worth asking in the face of a large body of literature that suggests diversity training doesn’t actually work.
  2. What is the managerial purpose of “anonymous climate surveys” if not to abstract minority workers into numbers and prime management to view them through a lens of otherness?
  3. How is this data being leveraged to build a more hospitable work environment for minority workers?

Bloomberg’s 2020 D&I index suffers from similar oversights. The index draws upon data from company filings and self-reported responses to a series of box-checking, quota-meeting questions about employee welfare and diversity. Using this framework, Bloomberg assembles an index of 325 companies and provides an overview of how the index performs as a whole. In their index:

  1. Women represent 6 percent of CEOs.
  2. Women represent 19 percent of executives.
  3. 64 percent of the companies have a Chief Diversity Officer.
  4. The companies have a 19 percent mean gender pay gap.

Remarkably, Bloomberg’s index often fails to adequately portray progress even with its cherry-picked numbers. It touts its 6 percent female CEO makeup despite the fact that women now make up 7.4 percent of CEOs in the Fortune 500. It also boasts a 19 percent median pay gap, when this year’s national median pay gap was the very same number, hardly putting these companies on the vanguard. Oversights like these typify corporate America’s indifference to progress, even at the most surface level.

Even more telling are the press releases featured throughout Bloomberg’s D&I fact sheet. Replete with quotes from CEOs regaling each other with empty rhetoric, it is devoid of the thoughts and feelings of employees. This asymmetry instantiates who much of the D&I industry speaks for: not minority workers, the agreed-upon victims of workplace hegemony, but business leaders trying to carry out a vision of diversity and inclusion that’s compatible with their bottom line.

D&I indices are not only PR ploys that sanction mass corporate consumption as ethical. They are also designed to seduce the “socially responsible investor” into showering publicly traded companies with yet more capital. As Patsy Doerr, former head of Global Head of Corporate Responsibility and Inclusion at Thomson Reuters, says: “Creating the workforce of the future means building diverse teams [. . .] The [Refinitiv] index helps investors and analysts identify the companies that are getting this right.” Reality, however, brings into sharp relief the false imprimatur of “getting this right.”

Prejudice does not infect an otherwise neutral corporate world; it actively thrives in a corporate world that operates on the basis of privilege and power.

In June of this year, Adidas, ranked forty-seventh on Refinitiv’s index, was taken to task by its employees for racial discrimination in the workplace. At a company whose business model routinely leeches off of black culture, black employees told the New York Times that “their input was not valued when decisions were being made” and that “it was not uncommon for negative stereotypes to creep into work discussions or marketing pitches involving black athletes.” Additionally, “minority employees often left the company in hopes of getting better jobs or higher pay after not receiving promotions they believed they deserved.” Adidas’s head of HR, Karen Parkin, was cited as a major contributor to the problem and subsequently resigned. Her position in the uppermost echelon of management all but confirms the extent of the systemic prejudice baked into the Adidas brand.

Consider, also, Goldman Sachs, a company which placed on Bloomberg’s 2020 index and was assigned two 100 percent ratings on the HRC index over the last two years. Just last year, a gay former executive sued the company for discrimination on the basis of sexual orientation. The executive claimed he was routinely met with homophobic remarks and was even shut out of meetings because “he sounded too gay.” His legal complaint states: “The reality is that the bank does little more than provide lip-service to LGBTQ diversity,” alleging, “everyday reality does not measure up.” And in 2018, a long-simmering lawsuit against Goldman Sachs for systematically preventing women from advancing in the workplace was granted class-action status; it will now represent several thousand women, with a trial expected sometime next year. In March, however, over a thousand of these women were forced into arbitration, significantly crippling the position they’d worked to build for two years but adding credence to their original complaint: “The record overwhelmingly demonstrates that year after year Goldman continues to treat women as second-class employees, permitting a culture of fear and retaliation to flourish rather than fixing known, systemic gender bias.”

The lack of diversity and inclusion in the corporate world is not just a function of individual actors but the structural precariousness of the sector itself, where workers are subject to at-will employment laws, rendering them vulnerable to wage theft, harassment, and of course, undue dismissal. The vast majority of corporate employees have a paucity of negotiation power over their contracts, which are often augmented orally and after the fact. The looming threat of joblessness stokes these workers into competing with one another, rather than organizing, cultivating an environment that rewards tribalism on the basis of race, class, gender, and so on. Prejudice, by this token, does not infect an otherwise neutral corporate world; it actively thrives in a corporate world that operates on the basis of privilege and power.

Corporate America will never be at the forefront of any civil rights struggle, in no small part because it refuses to ask questions of those who are struggling. Instead, management presumes to have all the answers. Ensconced in D&I indices are these supposed answers in their most explicit forms, applying input-output solutions to non-binary issues. But problems of bias, prejudice, and discrimination are diffuse, amorphous, and varied. Their redressal demands nuanced, labor-oriented solutions for workplace equity. If corporate America were to treat these problems with the seriousness they deserve, then it would for once let workers lead.

Jon Skolnik is a Brooklyn-based freelance writer with words in AlterNetBuzzflashThe Monthly Review, and elsewhere. 
 

 

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