Protiviti Executive VP: DEI must be viewed as a core component of a company’s ESG strategy
IN BRIEF
- DEI can be viewed as part of a company’s core ESG strategy, as an enabler of objectives related to all three pillars—environmental, social and governance.
- In the future of ESG reporting, I believe there will be specific standards set. This will help us set specifications and indexes that consider macroeconomic factors and industry best practices, and companies can then work to achieve and surpass these standards.
- There are many studies that link diversity to profitability and financial health, but I urge us to instead look toward inclusion and belonging as the goal to creating a sustainable business model to help companies thrive over the next 10 years and well beyond.
Susan Haseley is a Protiviti Executive Vice President and global leader of the firm’s Diversity, Equity and Inclusion initiative. Haseley has more than 30 years of experience in providing risk and technology consulting and internal audit services. Haseley has been with the firm since its inception in 2002. She sat down with Joe Kornik, Editor-in-Chief of VISION by Protiviti to discuss why DEI is such an integral part of ESG today and how it will evolve over the next decade and beyond.
Kornik: Can you talk to us a little bit about your role as global leader of the firm’s Diversity, Equity and Inclusion initiative? What does that entail and how do you make an impact day-to-day?
Haseley: As the Executive Vice President for Diversity, Equity and Inclusion, I am charged with developing and executing company-wide DEI initiatives through strategic planning processes, leadership collaboration and community partnerships. As a champion of this important initiative, I ensure Protiviti has a strong focus on diversity recruiting to attract diverse talent, including targeted recruiting via diverse professional associations, colleges and digital platforms. I’m also focused on retaining and developing talent and maintaining employee engagement by creating meaningful connections such as our employee network groups to serve employees interested in various initiatives and issues regarding communities, such as women, parents, military veterans, multi-cultural, mental wellness and LGBTQ+. As a DEI leader, my ultimate goal is for DEI to exist not as a dedicated business function, but for Protiviti to have all of the aspects of diversity, equity, inclusion and belonging deeply embedded into our organizational culture.
Kornik: Why is DEI so important as an aspect of ESG? And how do you see its impact evolving over the next decade?
Haseley: ESG is increasingly becoming an important framework to consider the environmental, social and governance aspects of a business, right alongside financial indicators. The key stakeholders for ESG include employees, consumers, vendors, asset managers and investors. ESG measures the organization’s impact on society and the environment, corporate behavior, and the handling of external challenges and opportunities related to sustainability. DEI must be viewed as part of a company’s core ESG strategy as an enabler of objectives related to all three. The ways in which DEI and ESG strategies and structures interact and collaborate in the future bears consideration. DEI contributes to the social aspect of a company, the S in ESG, based on how a company manages its relationships internally and externally. Internally, a company can examine its workforce, including the recruitment, retention and advancement of diverse employees. It can also examine the workplace, including the culture, engagement and ecosystem. Externally, a company may consider the marketplace, including community engagement, brand exposure, reputation, and even its clients’ core values.
Kornik: That’s interesting. I see DEI in the social aspects of ESG, but I am interested in its applicability to the environmental and governance aspects as well. Can you tell me more about that?
Haseley: In relation to environmental and governance aspects, strong strategies and objectives must embrace diverse communities and the voices within them. Various environmental issues affect diverse communities in a range of ways, and diverse perspectives are necessary to understand how to apply innovative strategies that impact local communities. For example, we have seen a number of environmental crises in recent years and there’s little doubt the response would benefit greatly from in-depth experience and first-hand knowledge that may not be able obtainable without diverse voices having a seat at the table. The same applies in the governance realm, as governance encompasses executive decision-making, governing bodies and leadership styles, along with audits, internal controls, business ethics and shareholder rights. The tie between DEI and governance is understood most clearly if you consider ethical leadership behavior and equity table stakes for any company’s governing body. Employees—as well as all other stakeholders—need to know their voices are heard on a variety of workplace issues. In fact, research suggests boardroom diversity improves ESG performance, as gender-diverse boards outperform non-diverse boards.
In relation to environmental and governance aspects, strong strategies and objectives must embrace diverse communities and the voices within them. Various environmental issues affect diverse communities in a range of ways, and diverse perspectives are necessary to understand how to apply innovative strategies that impact local communities.
Kornik: Right. Speaking of governance, a big part of the future of ESG is reporting. What do you think will be most critical when it comes to effective DEI reporting in the future?
Haseley: When we talk about ESG reporting, it’s vital to consider metrics that are informed through strategic data analysis. Data and analytics are certainly an integrated enabler that serves as a structural support to the DEI model and is critical to driving Protiviti’s value of Inclusion. As it currently stands, we set metrics much in the same way we set “SMART” goals by ensuring they are Specific, Measurable, Attainable, Relevant, and Time-bound. In the future of ESG reporting, however, I believe there will be specific standards set. This will help us set specifications and indexes that consider macroeconomic factors and industry best practices, and companies can then work to achieve and surpass these standards. To support the integration of DEI into ESG reporting, it is vital to know what data points to monitor to show both progress and impact. It’s just as much a science as it is an art form to ensure your DEI reporting tells the story of your people, more so than just the numbers or statistics. We worked to outline Protiviti’s DEI Journey this year and will continue to examine how these narratives fit into ESG reporting in the future. We will continue to innovate our storytelling to helps demonstrate how Protiviti’s value of Inclusion is measured and lived through our diverse workforce.
Kornik: Overall, what do you see as DEI’s strategic importance, especially among the C-suite and directors? Do you think business leaders fully realize its potential today and in the future?
Haseley: At an executive level, diversity, equity and inclusion are often topics for discussion, as we know that more diversity in the C-suite and boardroom equates to better business outcomes. Research shows companies with diverse executive teams tend to have above average profitability, and inclusive companies are more likely to be innovation leaders and change-ready. And a report by Harvard Business Review found that organizations with two-dimensional diversity are 45% more likely to capture a larger portion of the market and 70% more likely to enter a new market. Information like this makes its way into our conversations, though we are all continuing to realize its full potential as we continue to grow, change and evolve as an organization. Because as we know, diversity alone does not drive these strategic business improvements. Rather, it is through building an inclusive culture, empowering empathetic leaders, and creating a sense of belonging that we can drive innovation and key business results.
Kornik: That’s interesting. I think both ESG and DEI are shifting from moral imperatives or “nice to haves” to more strategic business imperatives. And still, there are many who ask for “the business case for DEI.” Can you talk about that shift?
Haseley: It’s interesting you mention that, as more recently I’ve been reading about how companies need to “get beyond the business case for diversity.” Just as you wouldn’t ask for the business case for innovation as being “good for business,” we are steering away from trying to provide proof that diversity causes improved business performance. There are many studies that link diversity to profitability and financial health, but I urge us to instead look toward inclusion and belonging as the goal to creating a sustainable business model to help companies thrive over the next 10 years and well beyond.
To support the integration of DEI into ESG reporting, it is vital to know what data points to monitor to show both progress and impact. It’s just as much a science as it is an art form to ensure your DEI reporting tells the story of your people, more so than just the numbers or statistics.
