Hey, Compliance Warriors!
In recent months, we have seen swaths of high-profile executives stepping down from their posts for various reasons. Some are trying to champion being replaced by diversity hires, like Alexis Ohanian, former Reddit CEO. At the same time, others have stepped down because they are being accused of insensitivity or bias.
Both sides of the coin bring up an issue that we all need to heed. How much diversity is our business bringing to the table? Posted on our site recently was an article talking about the benefits of diversity and what it can mean to any business. Here, we’ll talk about management and leadership, specifically.
To side-step for just a moment, California just passed a law to address this very situation. The bill titled AB-979 addresses leadership in organizations by saying that any board of directors with 4-9 people on the board must have a minimum of 2 directors from underrepresented communities on them. Additionally, a board with 9+ would need to hire three directors onto the board. If these conditions are not met by the end of 2021, fines of $100,000 for first violations and $300,000 for further infractions will be enforced.
This law is a massive turnabout when we think of the a-typical board of directors. But is forced diversity the way to go about effective change? Will workplaces flourish with leadership foisted from their position to be replaced with, a most likely, outside hire? Because of the time constraints put on companies having one year to make a massive shift in leadership, will they have the talent pool in-house to secure these dynamic changes properly?
Back to our main point, outside of this law in California, we have 49 other states that are not beholden to this rule. Yet we see the need for diversity in our company structure. Placing new blood in leadership roles can be hugely beneficial as we race into an era of mandatory inclusivity. We save ourselves from the headache of scrambling for diverse talent when we have already prepared our business ahead of time by securing talented individuals to form our leadership.
This type of proactive thinking and management will benefit any company willing to adopt it. Companies like Johnson & Johnson, EY, Coca-Cola, and so many others have been active in attaining and retaining diverse talent. They understand the impact that different viewpoints can have on a company.
Take the idea of Coke Zero & Diet Coke as an example. Both are zero-sugar and zero-calorie drinks. Both taste a little different but are still Coke at their core. The main difference is that Coke Zero is specifically marketed to men, while Diet Coke is marketed to women.
This idea did not appear in a room full of people who are clones of each other. This is diversity and diversity marketing at its finest, and the perfect example of why acting now to facilitate diversity in management and leadership roles in our organizations is crucial. You never know who is going to step up and voice the next big idea for your company until you give them an opportunity to do so.