Diversity and Inclusion Dividends

Corporations and other entities’ diversity efforts are mostly thriving in the face of legal scrutiny and a divided public.

By George N. Saliba, Contributing Writer On Apr 1, 2024

While corporate diversity efforts have been underway for decades and increased in their intensity following the May 2020 murder of George Floyd, diversity programs at certain entities have faced legal scrutiny surrounding accusations of discrimination against non-minorities; businesses have also encountered disenchantment from a portion of the public. Yet most companies have not been accused of any wrongdoing whatsoever, and they have remained within legal parameters, asserting a case for both increased profitability and improved corporate culture via thoughtfully crafted diversity initiatives.

The case for corporate profitability is data-centric: A 2019 analysis by global management consulting firm McKinsey, for example, found that “companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile – up from 21% in 2017 and 15% in 2014.” Regarding ethnic and cultural diversity, McKinsey found that “top-quartile companies out-performed those in the fourth one by 36% in profitability, slightly up from 33% in 2017 and 35% in 2014.”

One New Jersey company commited to diversity while also minding the bottom line is Florham Park-based BASF Corporation, the 16,000-employee North American affiliate of Germany’s chemistry juggernaut BASF SE. Patricia Rossman, chief diversity and inclusion officer at BASF, tells New Jersey Business Magazine that her company seeks “shareholder value” and “competitive advantages.”

“On [non-diverse] teams, everyone sort of thinks the same and they get to a very predictable and quick outcome,” she explains. “But I think that for teams that are more diverse, they are equally quick at mobilizing, but they get to a different outcome; they question the norms differently. So, that’s what we’re looking for.”

She also says, “We’re [aiming] not just to replicate the skills we have on our teams, but to say: ‘Who don’t we have, and what perspectives are we lacking? How can we be deliberate and intentional in bringing that in?’ Because that’s what fires the brainpower and firepower of different ideas.”

There are numerous BASF policies that may facilitate these and similar outcomes, including a policy that 50% of job candidates must be diverse, and that 50% of BASF job interviewers, in turn, must be diverse. “This is all predicated on hiring the best person for the role, but in doing so making sure that we are considering the full breadth of the talent market,” Rossman says.

BASF extends its diversity/inclusion efforts beyond gender and ethnic boundaries, even contemplating aspects such as how to better manage extroverts and introverts to ensure, as Rossman says, that “the quieter voices are heard.” BASF has also considered various generational differences surrounding fresh-out-of-college employees as well as those nearing retirement.

Diversity, however, can extend beyond hiring and operational realms. For example, BASF has specific diversity- and talent-fostering programs such as BASF Women in Manufacturing, a separate BASF Apprenticeship Program, and BASF Professional Development Programs (PDP). The company additionally partakes in the Future of STEM Scholars Initiative (FOSSI), a national program established by the American Chemistry Council (ACC), American Institute of Chemical Engineers (AIChE), Chemours and the HBCU Week Foundation. FOSSI “seeks to increase the number of underrepresented professionals in the STEM workforce by providing scholarships to students pursuing preferred STEM degrees at Historically Black Colleges and Universities (HBCUs).”

Healthcare

Diversity and inclusion are also prevalent in the healthcare arena. Case in point: Hackensack Meridian Health (HMH) was ranked No. 1 in the US on the 2023 DiversityInc Top Hospitals and Health Systems list. HMH has taken specific steps to advance diversity, equity and inclusion (DEI) and to address disparities in health outcomes including, but not limited to: Leveraging the American Hospital Association’s Health Equity Assessment (HETA); launching local site Diversity, Equity & Inclusion Councils, chaired by site hospital presidents; increasing spending with diverse suppliers; and implementing implicit and explicit bias training for all 36,000 team members. 

“We have accomplished so much because we have embraced DEI and health equity as one of our seven strategic priorities, a decision made not only by our CEO Bob Garrett and executive leadership, but with the input and approval of our Board of Trustees,” Avonia Richardson-Miller, EdD, MA, CDE, SVP, chief diversity officer, PhD, for HMH, tells New Jersey Business Magazine.

Success for other entities is not always as smooth as it has been for HMH, however. Richardson-Miller says, “The most daunting challenges now are happening outside of HMH; companies throughout the US are dialing back on these vital initiatives. Sadly, Forbes recently reported an 18% decrease in leaders’ endorsement in their companies’ DEI efforts in the last two years. This is due to economic challenges, … scrutiny on companies regarding racial justice, and in some corners a backlash against DEI. At Hackensack Meridian Health, we are doubling down on DEI because there is a strong moral and strategic imperative to do so.”

Challenges

Legal challenges for other entities, again, have been of concern. The U.S. Supreme Court’s June 2023 decision on Students for a Fair Admissions v. President & Fellows of Harvard College ruled that race cannot be used as a factor for university admissions. A subsequent letter from the 13 state attorney generals of Alabama, Arkansas, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Montana, Nebraska, South Carolina, Tennessee, and West Virginia threatened companies that used racial-based preferences with “serious legal consequences.” And the venture capital firm Fearless Fund, for example, is under scrutiny for its Strivers Grant Contest, which provides $20,000 to companies that are majority owned by Black women; a lawsuit argues that this discriminates against other races. 

That said, many argue that DEI, when implemented correctly, is about fairness. Speaking about DEI in broad terms, Robert L. Johnson, director and chief diversity officer in the corporate group at the law firm of Gibbons, P.C., says, “People don’t know what it means … diversity, equity and inclusion (DEI) … that’s what it means. Even the term ‘inclusion’ means a more comprehensive approach in fostering fairness and including everyone; not excluding anyone because you’re white, or reverse discrimination.”

Gibbons is part of the DEI equation. The Gibbons Diversity Initiative (GDI), according to its website, “promotes inclusion both at the firm and throughout the legal and business communities, particularly with respect to women and minorities” via cultivating a diverse workforce (e.g., training and development, mentoring, and retention): thought leadership development programs (e.g., guiding New Jersey’s legal community, helping to lead professional associations, and presenting programs with preeminent experts on corporate diversity initiatives). Additional GDI efforts include supporting worker pipeline initiatives such as via the Clerkship to Associate Pipeline (CAP) Program, as well as wide-ranging efforts toward supplier diversity and, separately, assisting with expanding legal/business community diversity both in Newark and throughout New Jersey. 

Johnson talks about the overall DEI movement in the US. He concludes, “The backlash [against DEI] continues to grow against some of the work and the gains that people have made. I think that’s where you’ve kind of got to hold the line and do a lot of explaining [about] what these initiatives really are, so people don’t get confused and we all of a sudden make it (DEI) a dirty word.”

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