How Do Companies in Financial Services Hold Executives Accountable for Diversity Results?

December 4, 2013 8:35 pm

By Shane Nelson, Vice President, Consulting

Photo by Shutterstock

Photo by Shutterstock

Ninety percent of the DiversityInc Top 10 link executive compensation to diversity metrics. Eighty-four percent of the DiversityInc Top 50 and just 67 percent of the top financial-services companies do this. Companies are finding it more difficult to link executive compensation to diversity metrics. In some industries, namely financial services and insurance, this practice could encourage bad behavior—doing whatever it takes to receive this compensation, including not doing anything at all

However, companies are finding ways to ensure executives are held accountable for progress in diversity and inclusion. Ninety percent of the DiversityInc Top 10 and 90 percent of the DiversityInc Top 50 make diversity goals part of executive-performance reviews. Just 78 percent of the financial-services sector is doing this.

Sodexo, the No. 1 company on the DiversityInc Top 50, encompasses diversity goals that are process metrics which impact behavior change and outcomes, such as being a mentor or executive sponsor of an employee-resource group.

Here are some best practices for accountability and how many top companies are using them:

  • Sponsoring resource groups
    • 80% of the DiversityInc Top 10 include this vs. 68% of the DiversityInc Top 50; 78% for the financial-services sector
  • Being a cross-cultural mentor
    • 70% of the DiversityInc Top 10 vs. 52% of the DiversityInc Top 50; 44% of the financial-services sector
  • Recruitment in person’s area of responsibility for diversity
    • 90% of the DiversityInc Top 10 vs. 80% of the DiversityInc Top 50; 67% of the financial-services sector
  • Promotions in person’s area of responsibility for diversity
    • 90% of the DiversityInc Top 10 vs. 60% of the DiversityInc 50; 44% of the financial-services sector
  • Involvement with external organizations connected to diversity
    • 80% of the DiversityInc Top 10 vs. 80% of the DiversityInc Top 50; 56% of the financial-services sector
  • Retention/engagement in person’s area of responsibility across racial/ethnic/gender demographics
    • 90% of the DiversityInc Top 10 vs. 84% of the DiversityInc Top 50; 67% of the financial-services sector

Companies are delving deeper to ensure executives are pushing accountability throughout their business units (BU) or departments. For example, some top companies measure the following:

  • % of executive’s BU or department participating in resource groups
  • % of executive’s BU or department participating in mentoring
  • % of executive’s BU or department participating in multicultural nonprofit activities
  • Supplier-diversity spend by BU or department

Sodexo goes so far as to include representation goals, such as recruitment and promotions, based on the geographic availability of women, Blacks, Latinos, Asian-Americans and American Indians.

Benchmarking clients don’t have to reinvent the wheel; DiversityInc has done the work for you! Our new report card includes tons of metrics you should be using in your reporting dashboards. For more information, email <ahref=”mailto:Consulting@DiversityInc.com”>Consulting@DiversityInc.com

Tags: