EW_Winter22-23_LR

DIVERSITY EQUITY INCLUSION by Dominique Shelton Leipzig A process to build a diverse culture in months, not years Investors and exchanges are calling for board diversity, but few companies have a playbook for becoming diverse at the speed and scale that circumstances demand. As both a legal advisor to corporate leaders and nonprofit founder, I have created a set of guidelines and practices for how companies can engage meaningfully with these goals and get results. Board Diversity Increased in 2021, but Challenges Remain Statistics show the appointment of diverse board members is rising. Yet directors from non-white, underrepresented groups occupy 17% of board seats, up from 14%, according to ISS Corporate Solutions data. Women accounted for 27% of directors in 2021, up from 24% in 2020. Despite productivity, the US is behind Europe in gender and ethnic diversity on boards. Last year, women held 30.6% of boardroom positions across the E.U., with a high of 45% in France. According to the European Parliament news, binding quotas have had a strong role in this shift; France first introduced legal targets for women in 2011, and a 40% quota took effect in 2017. What is behind the push for board diversity? In the U.S., investors, proxy advisors, and public company exchanges are calling for progress on diversity now. This year, Nasdaq updated its Board Diversity Rule demanding transparency on diversity. By giving investors consistent measures of board diversity, these mandatory disclosures increase accountability of listed companies, improving conditions for recruiting diverse board candidates. Worldwide trends are pushing for diversity because it is good business. Business is global, and the globe is diverse. In the U.S., Gen Z are almost already majority diverse. The expectation is that diverse perspectives are a must and appealing to a diverse customer base can lead to success like Fenty Beauty, with its $1-billion-plus valuation. How can companies move quickly to ensure C-Suite and board diversity? While diversity is necessary to meet expectations, there are few clear guideposts on how to do this at speed and scale. During the pandemic, I co-founded an organization called NxtWork, devoted to diversifying the C-suite and boardrooms by tapping the capabilities of diverse women leaders already positioned to lead. In the aftermath of the murder of George Floyd, we asked what we could contribute to the discussion and realized it was our experience as executives leading diverse teams. Our approach recognizes and advances talent that already exists. Our founding members have led diverse teams in companies with a combined market cap of $4 trillion USD with the existing workforce. NxtWork recognizes and leverages that diverse women leaders, over their career growth, have drawn out the next generations of diverse talent through their example and mentorship. We realized a large part of the equation was our presence, leadership, and responsibility for P&L that moved the needle. We found a similarity to this part of our experience, despite coming from different disciplines. The business of creating and embracing diverse leadership culture has its nuances, which is why we have described a multistep process derived from our experiences. It can be summarized into three basic principles: Put a woman in charge of a part of the strategic plan critical to the enterprise and future success. In charge of a new vertical that someone doesn’t own already – this avoids running afoul of entrenched interests. Her untapped expertise could already be in your organization. If not, by all means, recruit from outside. Support that person in her new role. Make sure she has the resources to fuel the endeavor. Don’t let anything undermine the effort, like a separate, similar initiative run by someone else. Amplify her success and build on these results. Celebrate her advancement internally and in public; this success builds on itself. NxtWork members have seen mentees from diverse backgrounds flock to these women, which becomes the foundation for a new organizational culture. If you take the necessary steps, your organization can withstand stakeholder scrutiny. You can even welcome the scrutiny. DOMINIQUE SHELTON LEIPZIG is a partner in Mayer Brown’s Los Angeles office and a member of the Cybersecurity & Data Privacy practice. She serves as the lead for Global Data Innovation as well as Ad Tech Privacy & Data Management. She is also the co-founder and co-CEO of NxtWork (nxtwork.org), a non-profit dedicated to diversifying the C-suite and the boardroom. 48 enterprising Women

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