Building an Ethical Culture: The Role of DEI.

Today’s businesses are held to a higher ethical standard than ever before. The meteoric rise of social media means that brands across the world are finally being held accountable for their actions by the general public. This includes programs on diversity, equity, and inclusion. However, recent events raise questions whether such programs should be scaled back or eliminated in university curricula and in the business world.

Rigorous ethical standards have become more commonplace in businesses, too. This has translated into meaningful changes in the workplace. Today, 86 percent of employees say that their business practices are honest and 37 percent say their standards have improved since the pandemic.

This means that you must foreground the importance of integrity and values if you wish to remain competitive. Building an ethical workplace helps you land top talent, avoid legal fees, and create a brand reputation that people trust.

From time to time, I post a guest blog. Today's blog is the joint work of myself and Charlie Fletcher. You can contact me at: [email protected] and Charlie at: [email protected].

Ethical Leadership

Ethical leadership entails building an environment where those in the organization feel comfortable talking to others to share perspectives on the importance of finding an ethical solution to problems. The starting point of an ethical organizational culture is the individual leader. A leader needs to connect with organizational values. Leaders must ask what they stand for and why. Leaders must consider why others would want to follow them. The goal is to get in touch with what motivates one’s actions and how best to motivate those in the organization who look to the leader for direction. 

Ethical leadership is values-based. An ethical leader should ask the following.

• What are the shared values that should drive my actions?
• How can I encourage shared values in the workplace?
• How can I monitor whether employees are acting based on those values?
• What, if any, changes need to be made to bring employee actions into agreement with the organization’s values?
• How should DEI programs capture those values?

Setting DEIB Standards

As a leader, you need to create policies that foster integrity and ethics in your workplace. Clear policies are actionable and ensure that you go beyond ethics washing, as noted in a blog by the "Ethics Sage." They may also protect you from legal trouble by ensuring that all employees understand the standards that you’re beholden to.

Start by reviewing your diversity, equity, inclusion, and belonging (DEIB) policies.  Our understanding of discrimination and harassment is always evolving, and your employees deserve to work for a progressive, ethically minded employer.

The belonging element of DEIB is also a new addition to many HR policies from the past. Here’s an overview of each of these different points, as a refresher:

• Diversity - refers to the demographic makeup of your organization and includes identities such as, but not limited to, age, gender, racial identity, sexual orientation, etc;
• Equity - is about making sure that every employee, regardless of identity, has equal opportunities, resources, and receives the same type of treatment at work;
• Inclusion - refers to actions that an employer helps foster a community of belonging and care at work;
• Belonging - refers to how an employee feels in the workplace. Ideally, by meeting the other three touchpoints, your workers will feel that they are safe physically and psychologically at work and are comfortable expressing their opinions.

Including belonging in your DEIB policy may take some reworking, but you don’t need to waste a lot of time for no reason when doing so. Instead, refer to the Equal Employment Opportunity Commission's (EEOC) guidelines to learn more about discrimination based on age, gender, race, and disability. Understanding the EEOC’s policies will keep you out of legal trouble and form a solid foundation for ethical policy writing.

When drafting your DEIB policy, be sure to gather feedback from internal and external stakeholders. Your employees and customers should have a say in how the business runs. This improves brand loyalty and helps you address potential issues before they arise.

You should also take DEIB considerations into account when creating major company overhauls, such as when you are planning for succession. You can use visual aids to provide an overview of how your organization may change when someone is promoted. This is also a great way to literally see the demographic makeup of your company. It can also help you avoid tokenizing employees – fostering a culture of belonging at your workplace not only means hiring superior employees but also ensuring everyone has access to career development and new opportunities to help them move up. You should also only look at promoting employees if they want leadership opportunities and are eager to take on additional responsibilities, not because you want your organization to look good on paper.

Employee Well-being

Treating your employees fairly is a big part of attracting and retaining top talent. As an employer, it’s your job to ensure that staff feel cared for, safe, and secure in their roles. This means that you must address employee wellbeing as part of your ethical workplace transformation. Beyond that, DEI programs should serve as a check on wellness.

Get the ball rolling by ensuring that all staff can get the rest and recovery they need. Overworking undermines your employee's health and may make them more prone to mistakes. This can spell disaster if you work in a risk-averse industry like healthcare or cybersecurity as mistakes at work can lead to litigation and damage your brand reputation.

Excessive work stress can create problems for a healthy work-life balance. Poor work-life balance can cause stress, which worsens your health, and can “put you at risk for substance misuse,” the Mayo Clinic reported.

Backlash Against DEI

According to an article by Axios online, corporate DEI programs have long been criticized as “window dressing.” Recently, states like Florida and Texas have limited the practice. In the past few weeks, we have been exposed to what some say is the reason the ousted Harvard President, Claudine Gray, was forced to resign because of her commitment to DEI.

The Supreme Court last year overturned the use of affirmative action in universities and has drawn attention to corporate diversity efforts.

• Businesses are trying to avoid any programs that could draw legal scrutiny — any kinds of goals around hiring particular demographic groups are increasingly frowned upon.
• "Anything that smacks of a quota" is out, said Diana Scott, Human Capital Center Leader at The Conference Board.

At the same time, many business leaders say they're still committed to diversity. In a survey of chief human resource officers recently conducted by The Conference Board, zero respondents said they were planning on scaling back DEI in 2024.

The Times They are a-Changin (Bob Dylan)

This means that the way DEI happens inside companies is changing.

• Some firms, like Blackstone, are focusing on hiring for socioeconomic diversity, and on changing job requirements to find more diverse talent without targeting a specific race or ethnicity, Fortune recently reported.
• And businesses are pulling back from the DEI term. The focus is moving away from "those three words" towards efforts around "wellbeing and inclusion," said Scott from The Conference Board.
• "Companies are really starting to look at other ways to do the work without saying that they're doing the work," said Cinnamon Clark, cofounder of Goodwork Sustainability, a DEI consulting firm.
• Businesses will likely be talking more about "employee experience" or "wellness," which falls under the inclusion bucket, said Clark.

One recent study found that companies with DEI teams make more diverse hires and have higher levels of employee morale. Cutbacks in DEI could lead to a decline in diversity in organizations. 

The negative publicity against DEI programs raises questions about their value. It will be interesting to see if university business programs scale back their coverage of DEI and whether it impacts diversity efforts within firms. For sure, 2024 should be an interesting year in that regard.

Posted by Steven Mintz, aka Ethics Sage, on January 9, 2024. You can sign up for his newsletter and learn more about his activities at: https://www.stevenmintzethics.com/. Follow him on LinkedIn at: https://www.linkedin.com/in/steven-mintz-aka-ethics-sage-98268126/recent-activity/all/.