Women
Corporate Directors Foundation and Pearl Meyer Release New Report on Board
Directors’ Oversight of DE&I
More
than 90% of directors state DE&I issues are on the board agenda – yet only
46% of companies set DE&I goals
New York, NY – November 16, 2021 – Board directors are more involved with DE&I than ever
before and they are expanding the breadth and depth of the metrics they use to
track progress, according to a new report, Directors, Prepare for
More: Tracking, Reporting, and Incentivizing DE&I, from the Women Corporate
Directors Foundation (WCD) and Pearl Meyer, an executive
compensation consultancy.
“WCD members who serve as corporate directors
for public and large private companies globally, are strong advocates for board
diversity and they uphold leading governance practices including those
necessary to promote further diversity on boards and in the workplace,” said Susan
C. Keating, CEO, Women Corporate Directors Foundation. “This report is
based on a survey of 157 WCD members, who shared data and insights into current
DE&I practices and emerging trends in the boardroom.”
Organizations are increasingly tracking
activity-based measures, such as those related to hiring and promotions,
including new hiring diversity (75%) and diversity in leadership promotion (56%).
The report shows organizations are still building frameworks for tracking non-activity-based
metrics, such as inclusion and the potential for bias in wage distribution and
performance measurement. For example, 54% of directors indicated they have
assessed pay equity, 40% have examined the pay gap, and 30% have considered performance
rating bias. Despite the expansion of DE&I measurement, only 46% of
organizations stated they are setting DE&I goals.
The
organizations surveyed are holding leaders accountable by incorporating
DE&I factors in their annual incentive plans (39%), and 41% indicate they are
likely or very likely to incorporate DE&I into incentive plans moving
forward. For organizations where DE&I metrics have not been added, the main
reason cited (36.7%) was that it is considered a baseline expectation for
executives and further reinforcement is not necessary.
“The
organizations that are making progress are the ones where the leadership team
is invested in creating change,” said Beth Florin, Managing Director at
Pearl Meyer. “Companies are evaluating whether the actions they’re taking today
are in alignment with their strategic objectives from a DE&I perspective,
and they are setting up robust benchmarks to make sure they are hitting those
goals.”
Report
recommendations
It is clear that the state of DE&I in corporations is
evolving, and directors and companies are becoming more sophisticated in how
they approach its tracking, goal setting and communication. This heightened
level of activity is being driven by an increasing demand from investors,
employees, regulators and consumers to address equity at all levels of an
organization. However, achieving an advanced state of leadership equity is a
long-range endeavor. The boards that take a methodical approach to setting
diversity, equity and inclusion milestones and meeting long-term goals will be
the most successful.
Six interrelated steps that can lead to an
improved DE&I environment:
As boards seek to ensure their organizations
reflect a diverse, equitable and inclusive workplace and workforce, there are six
important steps that can be taken to advance progress and lead to an improved
DE&I environment.
1. Understand the current state
2. Build a diverse pipeline
3. Develop future leaders
4. Engage a diverse workforce
5. Retain a diverse workforce
6. Create accountability
We invite you to download the report
This is WCD’s
latest report on corporate governance issues facing board members today. WCD
also recently released a report with Castellan on Resilience Management. Earlier this year, WCD released a pulse
survey on current Environmental, Social and Governance (ESG) initiatives among
corporate boards, which can be viewed here. WCD regularly
cultivates research to address the latest trends in business and governance,
including an annual thought leadership report – the 2020 report, which was
co-authored by WCD and Pearl Meyer, can be viewed here. If you need any
additional information, visit womencorporatedirectors.org.
For media
inquiries, please contact Julia Motis of the Dalton
Agency at 615-515-4894 or [email protected].
About Women Corporate Directors Education and Development
Foundation, Inc.
The Women Corporate Directors Education and Development
Foundation, Inc. (WCD) is a global membership organization and community of
women corporate directors. A 501(c)(3) not-for-profit organization, the
WCD Foundation has multiple chapters around the world and our members serve on
numerous boards of publicly traded companies, large private companies, and
family-run businesses globally. For more information visit www.womencorporatedirectors.org or follow us on Twitter @WomenCorpDirs or on Linked-In.
About Pearl Meyer
Pearl Meyer is the leading advisor to boards
and senior management on the alignment of executive compensation with business
and leadership strategy, making pay programs a powerful catalyst for value
creation and competitive advantage. Pearl Meyer’s global clients stand at the
forefront of their industries and range from emerging high-growth,
not-for-profit, and private companies to the Fortune 500 and FTSE 350. The firm
has offices in Atlanta, Boston, Charlotte, Chicago, Houston, London, Los
Angeles, New York, Rochester, and San Jose. To learn more about Pearl Meyer
visit www.pearlmeyer.com.
About WCD’s Global Lead Sponsor KPMG LLP
KPMG
LLP is the U.S. firm of the KPMG global organization of independent
professional services firms providing Audit, Tax and Advisory services. The
KPMG global organization operates in 147 countries and territories and has more
than 219,000 people working in member firms around the world. Each KPMG firm is
a legally distinct and separate entity and describes itself as such. KPMG
International Limited is a private English company limited by guarantee. KPMG
International Limited and its related entities do not provide services to
clients. To learn more about KPMG
visit www.kpmg.us.
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