DEI – what’s in a name, or underneath it?

EDI activism (Image: Quinn Dombrowski, CC BY-SA 2.0, via Wikimedia Commons)

Just about every organisation I know has some sort of policy now about DEI, the “diversity stuff” as the old-timers might say. Some with scorn intended.

In September, the Financial Times told of a filmmaker, influencer and “anti-woke” activist, Robby Starbuck, who is pressing companies in the United States to abandon such practices. The article then notes that “Ford, Lowe’s, Harley-Davidson and tractor maker Deere & Co are among the companies to announce they would end some diversity work after being targeted by Starbuck for consumer boycotts.” America’s largest retailer, Walmart, followed suit in November. Legislatures in some US states have taken action to ban such policies at public universities.

And there’s more in the past few weeks:

• Boeing’s Max plea deal rejected by court over DEI provision

• Three things to know about corporate DEI rollbacks

• ‘Crazy ideology’: US companies drop diversity efforts as conservative pressure mounts

• New ‘anti-woke’ ETF makes Starbucks its first target

Has a well-meaning effort been politicised to the extent that it has lost its original intent?

I’m wary of anything that smacks of a TLA, that is, a three-letter acronym. On the practical side, such mechanisms try to turn something deeply human into a machine that can be monitored by another machine that resides somewhere in the data centre of a machine-like investment firm or credit rating agency. On the philosophical side, these expressions seek, ontologically, to take ambiguous, complex concepts and flatten them, epistemologically, into digestible, discrete constructs. In both senses, they suck the life out of the language with which we seek to find meaning.

So, to DEI. Let’s examine the elements of this TLA in reverse order:

Inclusion

Why that term, when more normal speech might say inclusiveness or inclusivity? Those are longer words, so maybe it’s for reasons of brevity. But words have connotations as well as denotations. All three options can be forced to denote something in a dictionary or the databases used by rating agencies. But in ordinary use, connotations matter:

• Openness: Opening up to strangers and their strange practices, for example, can bring accidental insights; or more actively, bringing into the room someone you have actively excluded lets you hear ideas you’ve previously shunned.

• Flaw: But inclusion carries a distant and different connotation: the grit found in a diamond that diminishes its value but also distinguishes that natural stone from the artificial ones we can now engineer.

Inclusion seems to mean either, depending on the listening political stance.

Equity

… or is it equality? When these terms first started being used in earnest – and the proponents of DEI policies are nothing if not earnest – those on the left of the political spectrum seemed to favour equality. Those on the right chose equity. Charities adopted the former, listed companies the latter. But both terms are chameleon-like: Their meaning changes with the context.

• Equality: Equal opportunities are quite distinct from equal outcomes. This is the dichotomy that John Rawls sought to overcome in his political philosophy of fairness (Rawls, 1971, 1999). Distribution of the goods of a society might be balanced between the needs of the least well off and the rewards those better off might deserve.

• Equity: Rawls was seeking one version of equity, something that feels “fair”. It can be achieved if, in setting the rules of a society (and perhaps a company; in French, a société), you don’t know where on the spectrum of roles you sit. But equity has quite a different connotation, especially in the world of corporations. Equity implies ownership of some sort and bearing the residual risk. Both confer priority in decision-making, the reward for having skin in the game.

“E” seems to mean both (or all, if you consider that both terms have multiple meanings).

Diversity

How, I wonder, can anyone hold a meaning of diversity that does not include inclusiveness (or even inclusion)? Separating the two is a sign of the flattening of concepts, and in ways that the usual denotations of diversity already do – and do too much and too often. In many organisations, diversity is measured in categories of distinct, outwardly apparent characteristics: sex, race, religion, nationality. Subtler categories are used in the more expensive databases. For example, one such service can tell you how many directors of a company have an MBA from Harvard Business School. But what is the point of such diversity?

• Inputs: In large population studies, we often find, statistically, that men and women behave differently, have different attitudes, desires and needs. Ditto for race, ethnicity, language, religious persuasion, the cultural shift that can come with an MBA degree. They are proxies for something else, something that can make a difference to the organisation. That is …

• Outputs: In bringing different perspectives together any decision-making group – such as a board of directors – we can overcome the limitations of the perception of any individual. We all have blind spots. Some are physical: eyesight, peripheral vision. Others – and more importantly – are mindsets, the heuristics we develop that help us judge something quickly but embed with them certain biases (Tversky & Kahneman, 1974). We see what we expect to see.

The reason why diversity is important in organisations is because it helps us to see differently (Nordberg, 2023), to account to each other, through long relationships that build mutual trust (O'Neill, 2002), to challenge each other without breaking the bonds that hold the group, the organisation, the board together (Forbes & Milliken, 1999). The characteristics we plug into databases are merely proxies for the things that matter.

Call it what you will …

DEI (which chimes with Opus Dei), or IDE (the Ides of March?), or EDI (electronic data interchange, a novelty in the pre-internet 1990s), or even DIE (what we hope not to do), what we seek is fairness and a rounded view of the issue – whatever it is – and its consequences. Proxy metrics may be significant for populations, but they are unlikely to be equally effective for a small group. Statistics help us generalise from large samples. But they don’t let us particularise to the individual, group, or organisation. DEI metrics may help an investment portfolio manager judge global asset allocation, but their value for any one company’s board is limited.

And a note: One organisation I know has adopted DEI because the board felt it had to. But it added something: a “B”, for belonging. It’s a constant reminder – to the board, staff, and customers – that there is more to that organisation than just a three-letter acronym. Something deeper, underneath.

Forbes, D. P., & Milliken, F. J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24(3), 489-505. doi:10.5465/AMR.1999.2202133

Nordberg, D. (2023). A pragmatist case for thoughtfulness and experimentation in corporate governance. In T. Talaulicar (Ed.), Research Handbook on Corporate Governance and Ethics (pp. 310-327). Cheltenham, Glos.: Edward Elgar.

O'Neill, O. (2002). A Question of Trust: The BBC Reith Lectures 2002. Cambridge: Cambridge University Press.

Rawls, J. (1971). A Theory of Justice. Cambridge, MA: Harvard University Press.

Rawls, J. (1999). A Theory of Justice (Revised ed.). Cambridge, MA: Belknap Press.

Tversky, A., & Kahneman, D. (1974). Judgment under Uncertainty: Heuristics and Biases. Science, 185(4157), 1124-1131. doi:10.1126/science.185.4157.1124