Women Corporate Directors Foundation and Pearl Meyer Release New Report on Board Directors’ Oversight of DE&I
New York, NY – November 16, 2021 – Board directors are more involved with DE&I than ever before and they are expanding the breadth and depth of the metrics they use to track progress, according to a new report, Directors, Prepare for More: Tracking, Reporting, and Incentivizing DE&I, from the Women Corporate Directors Foundation (WCD) and Pearl Meyer, an executive compensation consultancy.
“WCD members who serve as corporate directors for public and large private companies globally, are strong advocates for board diversity and they uphold leading governance practices including those necessary to promote further diversity on boards and in the workplace,” said Susan C. Keating, CEO, Women Corporate Directors Foundation. “This report is based on a survey of 157 WCD members, who shared data and insights into current DE&I practices and emerging trends in the boardroom.”
Organizations are increasingly tracking activity-based measures, such as those related to hiring and promotions, including new hiring diversity (75%) and diversity in leadership promotion (56%). The report shows organizations are still building frameworks for tracking non-activity-based metrics, such as inclusion and the potential for bias in wage distribution and performance measurement. For example, 54% of directors indicated they have assessed pay equity, 40% have examined the pay gap, and 30% have considered performance rating bias. Despite the expansion of DE&I measurement, only 46% of organizations stated they are setting DE&I goals.
The organizations surveyed are holding leaders accountable by incorporating DE&I factors in their annual incentive plans (39%), and 41% indicate they are likely or very likely to incorporate DE&I into incentive plans moving forward. For organizations where DE&I metrics have not been added, the main reason cited (36.7%) was that it is considered a baseline expectation for executives and further reinforcement is not necessary.
“The organizations that are making progress are the ones where the leadership team is invested in creating change,” said Beth Florin, Managing Director at Pearl Meyer. “Companies are evaluating whether the actions they’re taking today are in alignment with their strategic objectives from a DE&I perspective, and they are setting up robust benchmarks to make sure they are hitting those goals.”
It is clear that the state of DE&I in corporations is evolving, and directors and companies are becoming more sophisticated in how they approach its tracking, goal setting and communication. This heightened level of activity is being driven by an increasing demand from investors, employees, regulators and consumers to address equity at all levels of an organization. However, achieving an advanced state of leadership equity is a long-range endeavor. The boards that take a methodical approach to setting diversity, equity and inclusion milestones and meeting long-term goals will be the most successful.
Six interrelated steps that can lead to an improved DE&I environment:
As boards seek to ensure their organizations reflect a diverse, equitable and inclusive workplace and workforce, there are six important steps that can be taken to advance progress and lead to an improved DE&I environment.
- Understand the current state
- Build a diverse pipeline
- Develop future leaders
- Engage a diverse workforce
- Retain a diverse workforce
- Create accountability
We invite you to download the report
This is WCD’s latest report on corporate governance issues facing board members today. WCD also recently released a report with Castellan on Resilience Management. Earlier this year, WCD released a pulse survey on current Environmental, Social and Governance (ESG) initiatives among corporate boards, which can be viewed here. WCD regularly cultivates research to address the latest trends in business and governance, including an annual thought leadership report – the 2020 report, which was co-authored by WCD and Pearl Meyer, can be viewed here. If you need any additional information, visit womencorporatedirectors.org.
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About Women Corporate Directors Education and Development Foundation, Inc.
The Women Corporate Directors Education and Development Foundation, Inc. (WCD) is a global membership organization and community of women corporate directors. A 501(c)(3) not-for-profit organization, the WCD Foundation has multiple chapters around the world and our members serve on numerous boards of publicly traded companies, large private companies, and family-run businesses globally. For more information visit www.womencorporatedirectors.org or follow us on Twitter @WomenCorpDirs or on Linked-In.
About Pearl Meyer
Pearl Meyer is the leading advisor to boards and senior management on the alignment of executive compensation with business and leadership strategy, making pay programs a powerful catalyst for value creation and competitive advantage. Pearl Meyer’s global clients stand at the forefront of their industries and range from emerging high-growth, not-for-profit, and private companies to the Fortune 500 and FTSE 350. The firm has offices in Atlanta, Boston, Charlotte, Chicago, Houston, London, Los Angeles, New York, Rochester, and San Jose. To learn more about Pearl Meyer visit www.pearlmeyer.com.
About WCD’s Global Lead Sponsor KPMG LLP
KPMG LLP is the U.S. firm of the KPMG global organization of independent professional services firms providing Audit, Tax and Advisory services. The KPMG global organization operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients. To learn more about KPMG visit www.kpmg.us.