The Data Issue Inside of Companies:
Following a boom in the DEI industry after the murder of George Floyd, we are now witnessing an oversaturation in the market of inclusivity approaches that vary in effectiveness. Lily Zheng writes about this issue and more in their article on the DEI-Industrial Complex, or Performative DEI. Lily highlights the biggest issues as:
- Businesses are excited to invest in DEI practices that might not be the most effective
- DEI professionals continue to do that type of work to keep their careers
- Not all initiatives target explicit issues or outcomes, but are rather vaguely “good”
- Many DEI professionals and service companies today are generalists, when specialists may more effectively solve the real issues in the space
- Oftentimes, inputs are being tracked rather than outcomes – how many people attended a seminar versus did we hit our hiring/retention goal
- Company leaders tend to make decisions about DEI budgets without consulting DEI professionals
In a nutshell – DEI is not a very data-driven space at the moment, to its detriment. Practitioners and consultants that aren’t making data-based decisions, or tracking success with data, are not driving good results, and it’s unclear what best practice is in this new space.
The Data Issue Outside of Companies:
The data problem extends beyond the work that people are doing in their companies to build a more diverse and accepting workforce. The issue prevails at the highest possible level: the reporting of human capital data to the public.
Disclosing human capital data is a new enough process that there is no standard or best practice, and HCM disclosure is still very unregulated in the US.
To highlight just how new:
- At the start of 2020, only 5% of the S&P 500 publicly disclosed their EEO-1 data, the intersectional workforce representation data by gender, race/ethnicity, and job category that every company with at least 100 employees must report to the government.
- Today, 77% of the S&P 500 either make this data public or have committed to future disclosure.
A major driver of this change was pressure from investors through shareholder engagement and stewardship from the likes of the world’s largest asset managers (BlackRock and State Street), stewards of retirement funds (Illinois, NYC and NYS comptrollers’ offices), and nonprofits such as As You Sow.
Three years ago, the issue was almost complete lack of publicly available information. While lack of disclosure is still an issue, disaggregation and lack of standardized HCM and DEI data are now the primary issues for analysts, companies, and firms.
Asset managers, consultants, and DEI practitioners go to great lengths to research human capital management (HCM) data, or pay large data providers who don’t actually have great depth in their DEI data.
DiversIQ solves both issues.
We ensure the deepest, most up-to-date HCM data available for the DEI consultants and practitioners aiming to make their companies more diverse, and the asset managers investing in companies.
Benchmarking against peers for DEI practitioners and consultants:
We help DEI practitioners and consultants back up their actions and suggestions with data, track success in their DEI initiatives, and understand best practice. We also work with major consulting firms, and the corporations themselves in better understanding their performance relative to peers, and how to come to investor engagements prepared and “having done their homework.”
We offer tools such as our Human Capital Trends report, which takes a deep dive into what public companies are reporting on and compares them to peers in their industry, and also offer our own insight on what best practice and transparent reporting looks like at leading companies.
We also thought-partner with organizations all the time. We are trying to stay on the cutting edge of this ever changing landscape around regulations. We’ve already partnered with the RJIC to talk about the recent SCOTUS Ruling on affirmative action, and have been helping companies understand HCM-related issues and regulations such as the upcoming SEC ruling on HCM disclosures for public companies.
Full insight into DEI performance for asset managers:
Because DiversIQ specifically focuses on only DEI and human capital data, we put all of our effort into understanding, gathering, standardizing, and analyzing this information. We work with asset managers and help them with stewardship and engagement efforts, identifying proxy voting opportunities, portfolio construction, marketing and comms around DEI, and benchmarking DEI and human capital performance.
DiversIQ uses technology to discover data by monitoring sites for recent disclosures, financial statements, DEI/ESG reports, human rights policies, codes of conduct, interviews, and any other supplementary materials that might shed some light on a company’s HCM and DEI data. We snapshot and archive those disclosures in our library with a 10-year look back, and then our team of analysts manually checks each of those documents to extract, aggregate, normalize, and calculate our data set.
We offer full transparency of the source attribution of every data point down to the page, and in some cases where we calculate, we provide the methodology behind that as well. When it comes to BOD, NEOs, and Executives, we will go so far as to research podcasts, public record, parents obituaries, and organizational records.
DiversIQ offers the best HCM and DEI data available.
We are always striving to stay on the cutting edge of this ever-changing landscape around regulations. We are currently working on expanding coverage internationally and broader in the US and going deeper into more qualitative metrics like HCM and DEI policies, benefits, and goals.
If you have a research request for us, something you want to know more about, or any feedback on our content, please let us know!