espite declarations that diversity, equity, and inclusion (DEI) initiatives should be abandoned, inclusion is in fact more vital than ever for companies to grow value, strengthen regional economies, and improve society.
The world’s largest multinational corporations, the majority of which are U.S.-based, have concentrated on workforces and markets comprised of white men. This focus has excluded people of color, women, refugees and immigrants, people who identify as LGBTQ+, and people with disabilities, among others. Yet, for companies, economies, and society, including marginalized people presents valuable opportunities. Furthermore, since boards of directors set company priorities, boards that are increasingly diverse are best equipped to understand and promote inclusion.
Inclusive employment benefits business and society
By expanding access to people with a wide variety of skill sets, qualities, and backgrounds, inclusive employment makes companies more innovative, competitive, and profitable in the global marketplace, in addition to increasing the pool of consumers of goods and services.
In contrast, racism and discrimination degrade humanity, society, and economies worldwide. Building a more inclusive society is a moral imperative and also presents a powerful opportunity to unleash the economic potential of vast human resources.
Women continue to experience gender wage gaps worldwide due to differences in educational opportunity and attainment, gender segregation in jobs, discrimination, bias, lack of pay transparency, and caregiving responsibilities that fall disproportionately on women. Yet, “closing the gender gap in labor force participation and the gender gap in management in OECD countries can raise global economic activity by approximately 7%, or about $7 trillion in today’s dollars.”
Racial equity could also boost economic growth and innovation. The promise of a more egalitarian future is that “economic equity leads to widespread prosperity—to the tune of $25.6 trillion in gross domestic product gains over a 30-year period,” according to the Federal Reserve Bank of St. Louis. Furthermore, white people will become a minority demographic in the U.S. by 2044. So companies that favor a labor pool of white people will limit their access to the rich human capital of the majority of Americans.
LGBTQ+ employees also face workplace discrimination and hostility. Yet, “companies with LGBTQ-supportive policies beat MSCI benchmark[s],” according to Credit Suisse’s study of 350 LGBTQ-inclusive companies. Better financial performance among LGBTQ-inclusive companies stems from their greater ability to attract and retain talent, innovate, and build customer loyalty and brand strength, according to the International Finance Corporation (IFC). LGBTQ+ communities also present valuable market opportunities. They represent 560-800 million people worldwide and $4 trillion to $5 trillion in purchasing power, according to the IFC.
People with disabilities constitute yet another worldwide demographic that face stigma and discrimination. Yet “companies that lead in disability inclusion drive more revenue, net income and profit. They are also 25% more likely to outperform on productivity compared to their industry peers that have not participated in the survey, measured as revenue per employee,” according to Accenture and Disability:IN. Furthermore, the large and growing population of people with disabilities represents rich human capital as well as markets. There are 61 million adults with disabilities in the U.S. alone; that is 26% of adults. The number will grow as more people develop “long Covid” and society ages.
Global migrants and refugees also face discrimination. One hundred million people worldwide were forced to flee their homes in 2022. This is more than double the 42.7 million who remained forcibly displaced over the past decade. Disasters due to climate change and geopolitical conflicts will further drive migration. While migration of large numbers of people can cause disruptions, it also represents a valuable opportunity, particularly to countries with declining populations. In order to maintain current living standards and social support systems, the U.S. will require at least 35 million more workers by 2030. Furthermore, McKinsey reports that migrants contribute almost 10% of global GDP.
Companies advancing inclusion
Companies like Bank of America, Morgan Stanley, and Synchrony partner with NGOs to advance employment opportunities for people of color, women, and other marginalized groups. Microsoft and HP are examples of companies that recognize the opportunity to hire people with disabilities, in addition to designing goods and services to tap that market. Over 300 multinational companies partner with the TENT Partnership for Refugees, which mobilizes the business community to improve the lives and livelihoods of over 36 million refugees. These businesses recognize that these are strategies to grow value and economies, while improving society.
Boards of directors advance inclusion
The role of the boards is to grow the company’s value in the global marketplace. Given changes in the marketplace and employee expectations, human capital risks and opportunities have become important governance issues. Diverse and inclusive boards bring the experience and expertise that is needed to address workforce matters as well as other vital social, economic, and environmental challenges. There is progress in transitioning boards with regard to their composition, focus, and attention. Pressure from investors and regulators help drive these developments. They recognize that in order to maximize the company’s greater potential in the global marketplace, boards must promote an inclusive, sustainable, and prosperous future.
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The prosperity argument for diversity, inclusion
April 3, 2024
For companies, economies, and society, including marginalized people increases innovation, competition, and profit in the global marketplace. Boards of directors should promote inclusion to create a sustainable and prosperous future, writes Alice Korngold.
D
espite declarations that diversity, equity, and inclusion (DEI) initiatives should be abandoned, inclusion is in fact more vital than ever for companies to grow value, strengthen regional economies, and improve society.
The world’s largest multinational corporations, the majority of which are U.S.-based, have concentrated on workforces and markets comprised of white men. This focus has excluded people of color, women, refugees and immigrants, people who identify as LGBTQ+, and people with disabilities, among others. Yet, for companies, economies, and society, including marginalized people presents valuable opportunities. Furthermore, since boards of directors set company priorities, boards that are increasingly diverse are best equipped to understand and promote inclusion.
Inclusive employment benefits business and society
By expanding access to people with a wide variety of skill sets, qualities, and backgrounds, inclusive employment makes companies more innovative, competitive, and profitable in the global marketplace, in addition to increasing the pool of consumers of goods and services.
In contrast, racism and discrimination degrade humanity, society, and economies worldwide. Building a more inclusive society is a moral imperative and also presents a powerful opportunity to unleash the economic potential of vast human resources.
Women continue to experience gender wage gaps worldwide due to differences in educational opportunity and attainment, gender segregation in jobs, discrimination, bias, lack of pay transparency, and caregiving responsibilities that fall disproportionately on women. Yet, “closing the gender gap in labor force participation and the gender gap in management in OECD countries can raise global economic activity by approximately 7%, or about $7 trillion in today’s dollars.”
Racial equity could also boost economic growth and innovation. The promise of a more egalitarian future is that “economic equity leads to widespread prosperity—to the tune of $25.6 trillion in gross domestic product gains over a 30-year period,” according to the Federal Reserve Bank of St. Louis. Furthermore, white people will become a minority demographic in the U.S. by 2044. So companies that favor a labor pool of white people will limit their access to the rich human capital of the majority of Americans.
LGBTQ+ employees also face workplace discrimination and hostility. Yet, “companies with LGBTQ-supportive policies beat MSCI benchmark[s],” according to Credit Suisse’s study of 350 LGBTQ-inclusive companies. Better financial performance among LGBTQ-inclusive companies stems from their greater ability to attract and retain talent, innovate, and build customer loyalty and brand strength, according to the International Finance Corporation (IFC). LGBTQ+ communities also present valuable market opportunities. They represent 560-800 million people worldwide and $4 trillion to $5 trillion in purchasing power, according to the IFC.
People with disabilities constitute yet another worldwide demographic that face stigma and discrimination. Yet “companies that lead in disability inclusion drive more revenue, net income and profit. They are also 25% more likely to outperform on productivity compared to their industry peers that have not participated in the survey, measured as revenue per employee,” according to Accenture and Disability:IN. Furthermore, the large and growing population of people with disabilities represents rich human capital as well as markets. There are 61 million adults with disabilities in the U.S. alone; that is 26% of adults. The number will grow as more people develop “long Covid” and society ages.
Global migrants and refugees also face discrimination. One hundred million people worldwide were forced to flee their homes in 2022. This is more than double the 42.7 million who remained forcibly displaced over the past decade. Disasters due to climate change and geopolitical conflicts will further drive migration. While migration of large numbers of people can cause disruptions, it also represents a valuable opportunity, particularly to countries with declining populations. In order to maintain current living standards and social support systems, the U.S. will require at least 35 million more workers by 2030. Furthermore, McKinsey reports that migrants contribute almost 10% of global GDP.
Companies advancing inclusion
Companies like Bank of America, Morgan Stanley, and Synchrony partner with NGOs to advance employment opportunities for people of color, women, and other marginalized groups. Microsoft and HP are examples of companies that recognize the opportunity to hire people with disabilities, in addition to designing goods and services to tap that market. Over 300 multinational companies partner with the TENT Partnership for Refugees, which mobilizes the business community to improve the lives and livelihoods of over 36 million refugees. These businesses recognize that these are strategies to grow value and economies, while improving society.
Boards of directors advance inclusion
The role of the boards is to grow the company’s value in the global marketplace. Given changes in the marketplace and employee expectations, human capital risks and opportunities have become important governance issues. Diverse and inclusive boards bring the experience and expertise that is needed to address workforce matters as well as other vital social, economic, and environmental challenges. There is progress in transitioning boards with regard to their composition, focus, and attention. Pressure from investors and regulators help drive these developments. They recognize that in order to maximize the company’s greater potential in the global marketplace, boards must promote an inclusive, sustainable, and prosperous future.
