DEI as Fiduciary Duty
By Margo Georgiadis

In 15 years as a board director, I’ve never seen a year more challenging than the one we’ve just shared. We’ve navigated intense disruption, economic downturn, social upheaval and deep personal loss. We’ve been connected by tragedies and deeply vital movements for racial justice. And we’ve brought our whole selves to work in a way we’ve never had to or been able to before. 

More than ever, we’ve been moved to think about the values that hold our society together: compassion, empathy and respect. We’ve had to engage in difficult and uncomfortable conversations around ingrained biases and systemic oppression.

Out of the disruption, we have found a new humanity in our lives and work. It has focused us as leaders on the importance of more proactive steps to strengthen our commitment to advancing diversity, equity and inclusion (DEI). COVID-19 has had a disproportionate impact on women and communities of color who have dropped out of the workforce at staggering rates. It’s up to all of us to reverse that trend.

As board members, our role is to advise, oversee and offer expertise where we can, which is particularly critical to progress on DEI. Diversity is not a “soft science,” and it can’t be secondary to other goals. As Catalyst, an organization where I sit on the board, has noted, businesses that prioritize DEI recruit and retain stronger talent, unlock greater innovation and bolster financial performance.

DEI, in other words, is part of our fiduciary duty to help our companies succeed, meet their goals and deliver for customers and stakeholders. We can start by looking at three areas that are natural for boards: measurement, strategic counsel and accountability.

As the old business maxim goes, “What gets measured gets managed.” That means we should do whatever we can to encourage company leadership to turn their aspirations into concrete, measurable targets.

As a CEO, I saw how important it is to commit to having standards and measuring results. Last year, Ancestry became a founding signatory to Catalyst’s Gender and Diversity KPI Alliance (GDKA), which will help organizations measure gender and ethnic diversity through a set of key performance indicators. The GDKA brings together corporations, DEI advocates, academics and trade organizations to focus specifically on measurement and to show that DEI leadership starts from the top.

We’ve seen a similar commitment at McDonald’s, where the board recently endorsed leadership’s decision to set clear goals to increase diversity across the company, especially in senior roles. By the end of 2025, the company aims to increase representation of historically underrepresented groups in senior leadership roles to 35% (from 29% in 2020). Similarly, the goal is to increase the number of women in senior leadership positions to 45% (from 37%), with an overarching goal of achieving gender parity by the end of 2030. The company has also implemented a Global Inclusion Index, modeled after best practices from partners like Catalyst, to measure progress.

Setting measurable targets is just the first step. To reach them, businesses need a clear strategy to change the ways processes work and decisions are made. It’s our job to advise company leadership about the practices we’ve seen work best.

I am a member of the All Raise Board Xcelerate advisory committee. All Raise is dedicated to diversity in funders and founders across the tech industry, and to helping tech companies increase board diversity. Our approach breaks through two major historical barriers to progress for CEOs, founders and investors — time and networks. We have reshaped the process for board recruiting so that companies find and recruit highly qualified board candidates from traditionally underrepresented groups far more efficiently. Our approach makes it easier for companies to set clear goals on board diversity and then quickly take the steps needed to achieve them.

Another good example of creating systemic change is how McDonald’s is implementing global brand standards that will require all restaurants globally — both owned and franchised — to meet predefined criteria focused on harassment, discrimination and retaliation prevention, workplace violence prevention, restaurant employee feedback, and health and safety.

Finally, to ensure that steps like these lead to meaningful results, it’s crucial that directors help hold the company and its leadership accountable for progress.

At McDonald’s, that has meant adding annual targets designed to meet its five-year goals to annual compensation incentive metrics for executive vice presidents and above, including the CEO. The board endorsed these targets, receives regular progress updates and will help hold the leadership team accountable.

The steps that McDonald’s and the more than 60 companies that have signed on to GDKA are taking will help foster more diverse, inclusive and equitable workplaces. In the face of great disruption, all companies have been forced to think creatively about how to maintain talent and engagement. We now have an opportunity to ensure that this new humanity is not just a feature of the pandemic but an essential part of the future.

There is still a long journey ahead. As directors, we have never had a more important chance to help businesses build a better, more just world. In this time of great change, we should seize that opportunity.

Margo Georgiadis serves on multiple public and private company boards, including McDonald’s, Applovin, Rodan and Fields, Handshake, Workboard and Neeva. She also serves on the boards of Catalyst and the Committee of 200. She was recognized as a Director to Watch in 2015.

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