May 16, 2024

DiversIQ: Past, Present and Future

Dan

Hey there. Welcome to People Count, a DiversIQ podcast where we talk about workforce diversity and human capital management from a data lens. DiversIQ is the leading provider of human capital and DEI data for the largest public publicly traded companies in the world. We provide the most comprehensive dataset focused on DEI, human capital, and other social factors affecting the materiality of company culture, employee retention, and inclusion. I’m Dan Berlingeri, and today I’m joined by Josh Ramer, the CEO and cofounder of DiversIQ. Hey, Josh. How are you doing?

Josh Ramer

I’m good, Dan. Happy Friday.

Dan

Happy Friday. Happy Friday. Today, for those who haven’t heard our last podcast, tell us a little bit about yourself. Who is Josh Ramer, and what’s DiversIQ?

Josh Ramer

Yeah. I, started my career on Wall Street. I was, worked at some major investment banks for about 8 years, and I got really burned out working 90 or a 100 hour weeks and every weekend and ended up starting my own benchmarking firm covering, retail and restaurant performance, and I sold it to a a research firm called Emarketer back in 2013, and Emarketer was a firm that, gathered a lot of disparate information about, brands and marketers about advertising and marketing and helped brands and marketers understand where people where consumers are spending their time and their money and how to reach them in the digital ecosystem, and so I worked on building products there for about 8 years, and after I left there in in late 2020, I I reached out to my to to my cofounder, Hilary, who was the head of research there for, like, 20 years.

Josh Ramer

We had always talked about starting a company one day together. We always and we loved what we were doing and the challenges of taking all this disparate, unstructured information and helping turn it into tools and actionable insights that people could use to make better decisions, and I had been researching diversity in human capital data in the summer of 2020, which which was the perfect time because this was right after George Floyd, and this was when all of these different stakeholders were were demanding that companies do more, and there’s a lot of reaction, and there was all this information out there, but a lot of people didn’t didn’t have the information they needed. They didn’t have quality information.

They didn’t know what it meant. They didn’t know how to use it, and so we just had this idea that what if we took that same model, right, gathering all this disparate information, vetting it to make sure it’s from a trusted source, normalizing it, and then delivering it to people that needed to make decisions so that they can know that they have trusted timely, granular information they needed around different issues. So whether it was an HR manager or DEI leader or or a executive or a job seeker or a vendor looking to do business with a company or an investor. You know, so that was our hypothesis, and we didn’t really know about who we were going to be building for or what they were actually doing. But so that’s so that’s how we we started, DiversIQ in early 2021.

Dan

Fantastic. Fantastic. So you started with that intention. I mean, what was early stage like for you and Hillary? I mean, were some of those earlier conversations like? Did you see any consistencies in the feedback?

Josh Ramer

So we started by throwing a lot of stuff against the wall. We started a a newsletter where we just started pulling some data together and talking about trends and insights, and you know, we we were using survey data around, sentiment. This was one, so a lot of people were working from home, and they were talking about what that looks like and how companies were handling the situation. We were looking at, data that was put out from trusted third parties like like big consulting firms that were putting out white papers on what they were seeing in terms of the boardroom and trends in governance and trends in board diversity. We were looking at a lot of what kind of what companies were seeing.

It was very reactionary in terms of diversity and inclusion and in terms of what they were disclosing about their workforces. But we we basically just we would we would pick a topic and write something about it and then see the reaction and start talk but but we did start talking to people pretty early, and we had you know, we we were reading a lot about big investors and how they wanted better information to engage with companies and get them to be better and then also to evaluate companies on who was doing well and who wasn’t, and we just kept hearing consistently that we’re not like, there’s not a lot of data out there, and what’s out there is is not granular enough.

It’s kind of a black box in terms of where is it coming from, how often is it being updated, how is it calculated, and so we really we just kept hearing that that it’s like data quality, timeliness, transparency. So that’s you know, that was really consistent from from both large investors and kinda large professional services firms and the companies themselves that were like, what’s everyone else doing, and what’s who’s doing well, and what what do we do? Yeah.

Dan

Yeah. So it sounds like those are some of, like, the main problems you were trying to solve for, maybe not all of the ones that you set out to solve. Was there anything that surprised you that you discovered in the space?

Josh Ramer

Yeah. I guess, first of all, we talked to some of the largest investors in the world, like 1,000,000,000,000 dollars asset vendors, and they they were both getting a lot of this data from from vendors, and they were also trying to do a lot of this in house, and they just said it’s just like, how are you doing this? It’s so hard, and we we we started doing it at a very small scale just to see, like, how could we do it? How would we set up systems and processes to scale. But all this information is so unstructured. It’s from all these giant PDFs and a database over the hearing. The company is saying this on a on a earnings transcript, and it’s not commoditized structured information that’s that has to be reported.

It’s all voluntary reported. They describe it differently. It’s reported all over the place. So they’re like, how are you doing this, and so we were just surprised by these really well funded, large companies that have been doing this for a long time that were struggling with with trying to do it themselves, and then I was surprised by by on the other hand, like, we we’ve been covering board diversity since we first started just because we were like, well, we have to, it’s kind of table stakes. We’re like, well, we can’t compete with some of the other large vendors that are that are doing this. But we we’ve been surprised by how well we’ve done it going against those vendors directly when we hear that our data quality, the timeliness, the the kinda insight into our methodology and how much effort we’re putting into validating, for instance, how people self identify with with race, or even how frequently we’re incorporating new information with changes, especially during proxy season.

Because we heard from several, at the time, prospects and now clients that they went into an engagement, and they said to the company, well, we want you to get more diverse on your board. Here’s what we’re seeing. Here’s where we want to get you to get to, or or here’s your policy now, and we we think you should implement this policy, and the company would say, well, your data is stale because that’s not even accurate today, and so. Yikes. Really like, that was one of the first things that we had success with was really people that wanted to engage get companies to change and then wanted to actually have kind of real time data.

You know, another example is a very large company that’s been in the space and doing this for a long time, was pushing S&P 100 companies to to publish their EEO-1 data, which is their intersectional workforce data they report, anonymously to the government, and at the time, when they started writing these letters, I think there were, like, 25 of or 20 or 25 of the S&P 100 had made it public, and they said, listen. We’re having success. They’re responsive, and they’re saying they’re going to do it, but we don’t know when they actually publish it because one of them will will put out a press release and say, hey. We made our data public, and one of them will, like, bury it on a corporate governance page with a little small link.

So giving them kinda, like, real time, insights into what’s going on and you know, how their efforts are paying off, or or one of our clients, pushed a company, METTLER, Toledo, this this proxy season to be more transparent and to publish their EEO-1, and like, we caught it, and we’re like, “Hey. Just so just so you know, your efforts are paying off. They actually published it”. The big challenges are this is really resource intensive. It’s really hard to know…is it is it good information, and how do we extract that information and turn it into something that we can deliver to people that they can actually use. 

Dan

I’d love to hear a little bit more about this version two of DiversIQ. I know that we’ve been on the precipice here for a while of launching and announcing it. Why the revamp? What what spurred that?

Josh Ramer

Yeah. I would say this is kind of version 3 because version one was like I built it myself, and though I have some technical skills, I am not a developer at all. So, like, our first prototype, I built it. My own MySQL database that was hosted on a very cheap cloud host, and version two is an enterprise grade system. Version one started with with coverage of a 100 companies with a limited amount of data. So one big change is that we have a lot more coverage.

We have over over 1,600 companies, a lot more data. There’s a platform for people to log into now, there’s a lot behind the scenes that our clients won’t see, but platform framework is going to allow us to be a lot more flexible and scalable and to make changes really quickly and to add new features and tools much more quickly in reaction to our client needs. So this new platform has a a couple of things which are in response to what our clients want. One is company profile. So going to company profile and seeing kind of a deep dive on one company, seeing visualizations to help you see trends and what’s going on in one company.

Kind of build your own report where instead of us curating dashboards or you downloading a giant raw data feed, you can really say, well, I want to run this report, and I want to see show me all the companies that have a black woman as the CEO, or I want to see companies that are you know, have have a big improvement in this area. So that’s kinda where we’re going with kinda custom reports and asking questions of the data, and then the third thing that that we’re starting to roll out is is kinda, custom portfolios or custom filters where you can say, like, hey. This is my portfolio or these are the companies I care about. I want to add this as kind of a custom filter on every page. Absolutely. Yeah. it’s features and tools, and it’s just making it much easier to use and more powerful. That’s that’s kinda what we’re excited about with versions two or three as I said.

Dan

I love it. Love it, and that sounds like that’s directly answering a lot of that nimbleness that you talked about where some larger data vendors might not be able to be as nimble on their feet, but it sounds like that’s come directly out of customer feedback that that you’re implementing a lot of those changes in real time, which is great.

Josh Ramer

Yeah, and it’s not just in response to feedback. It’s actually in response to requests that we serve up regularly. A client will say can you do this? I can’t do it in the platform, or even, like we’ll say if you need something done, just come to us, and we’ve learned a lot about what they need to be able to do. So V2 is a lot more, do it yourself. We’re still we still have a long way to go, but, hopefully, it’s a lot less them asking one, and they’ll be able to do it themselves, and so it’s both what they need to be able to do and what’s under the hood having the information they need.

Those are two the two pieces of the puzzle. But, also, a lot of different types of clients. You know, I mentioned people that are doing engagement and stewardship and proxy voting, and then there’s also people that are advising large companies or companies that are benchmarking themselves, and they want to just understand how do I compare to my peers and who’s doing well and how do I do better, and then there’s other companies that are saying I want to understand my portfolio and how it compares to an index, and I want to figure out what what’s on my watch list and what’s on my what should I avoid. So it’s risks and opportunities. So it’s really also helping different types of people do different things with the same same information.

Dan

Lot of aspirations there and a lot of great use cases. I mean, what’s next for DiversIQ? What’s next for the platform, for the research? What are you excited about?

Josh Ramer

Yeah. I would say where we are today is we’re helping people who know what they need, and they they they know what they want to do with it. So people will say either I have gaps or I’m not getting what I need, and then then you know, when we get them the information, they’re like, okay. I’m going to plug it into my process. I’m going to plug it in so that I can do this better. I’m going to stop doing any of this manually internally because you can do it for me. You’re saving me a lot of time and effort, or you’re giving me information which which I didn’t have, which is going to help me do more, and where we where we want to go is for those people that are like, I love this.

I want to use it, but what do I do with it, or I need you to help me understand what it means so that I can I can apply it? So It it could be somebody who’s like, I want to be doing engagement on this topic. I don’t know what to focus on. I don’t know which companies to engage with, and I don’t know how to push with a good argument for why they should do it, or I want to build a product.  I I want to allow my customers to build portfolios, customized portfolios based on their values or or what they care about, but I also want those those portfolios to be tied to to performance.

So it’s really turning the data into insights and signals and really helping different types of people understand, not just like, hey. We have all this data, but here’s here’s what matters. Here’s what it means, and so it could be combining all this data and putting some sort of score ratings. So at least you can see who’s doing well or not in certain areas. Like so we started with a transparency score, which is really just the percentage of metrics that a company is reporting overall and in different areas, and just so who’s who’s transparent and who’s not, and then who’s getting better over time and what are expectations with transparency.

But in the same sense, like, who’s doing really like, who has great benefits and how can we benchmark benefits, and then how does how do benefits actually matter and what matters? So it’s a little bit, like, bottom up, right, where we need a lot more data to start doing our own analysis. But there’s a lot there’s been a lot of academic research tying things like, Glassdoor ratings or whether a company shows up on a on Glassdoor’s best places to work list or the Fortune 100 best companies to work for list, showing that those companies outperform, and that’s that’s great. Like, it’s you can use that information to build portfolios and make decisions. Although at a certain point, everyone has that same information.

But what we’re trying to do is say, like, okay. Let’s look at the Fortune 100 best companies to work for. The new list came out a few weeks ago, and I think it was the 27th or 28th annual list they’ve published, and there’s there’s been several academic papers showing at any over any time period, those companies outperform only almost any index, and Jeffrey’s has just put out a piece kind of doing even deeper analysis and showing it holds true for the latest crop of the list and you know, it’s interesting analysis. But what we want to know is, like, what is it about those companies that Right, and the companies that people want to work for, and you know, it could be self reinforcing where if a company’s on that list once, people want to work work there and it it helps them.

But also kind of like our meta analysis. I think we look at, 8 or 9 different, thing what we call external recognition. So as a company participating in the Bloomberg Gender Equality Index, or what’s their human rights campaign corporate equality index score, or I are are they on the what’s their rank on this best 4 list? Are they included on this list, and so kind of the overlap between those things, or can we kind of tease out all these companies have these things in common, or the companies on this list, these seem to be the factors that that help them be the companies that they want to work for, and so then we can say, like, okay.

Those those things seem to really matter and start to run analysis and start to say, well, these are the companies that are doing really well, but those are probably, like, you already know because they’re on their list. More importantly, who’s going to get on that list? Who’s gone from just Right. Rich to great or who’s who has a great culture and is all is is in the top 10, and it seems to be something’s happening where they’re falling off, and so. Right. Our goal is to get to a place where we can we can help our clients identify risks and opportunities ahead of ahead of their peers or do it more quickly or or just help them use this information in a way that they can run their own analysis, right, and like, figure out their own, and so depending on what somebody wants to do, we have the information and we have the tools they need.

But we we can deliver the information to them so they can do it, or we have the tools so that we can help them start to understand this and really start to figure out what matters, how do we use this to grow our business, get better with our KPIs help our clients do what they want to do.

Dan

Or end up in a Fortune 500 list.

Josh Ramer

Right. You know, every every company is trying to get on that list, and So they don’t it’s not like the the Google search where you can kinda, like, tease out the algorithm and game it. And we’re not looking at pay to play lists where if you spend enough money with fortune, you’re going to get on that list. It really is based on the employees and other other companies saying this is the company that people or you know, recruiters one whatever. These these are the companies that people want to work for. So it’s like we want to include employee reviews and ratings.

We want to include Employee survey data. We want to include how how other companies are are seen by their peers. We want to include policies and what company data. We want to include maybe supplementary data, which can help us round out.  But at the end of the day, everyone’s trying to understand what does great look like and How do you do it and how do you do it effectively and efficiently. So, like, what does that cost? So how do we do it, and how do we do it so that we’re not, you know how do we retain our clients? We don’t have a lot of turnovers. We one to spend on recruiting new people and training them.

How do we make sure our, manufacturing facilities and warehouses are more safe and that we have we treat our people well so they don’t miss time and get injured and have illnesses. There could be a lot of different ways to look at it, and some of it is tied to financial performance, and some of it is just you know, a competitive advantage that is somewhere people want to work for or they treat their people well or they’re seen as Good practice. Good culture.

Dan

Yeah. Yeah. Thank you for this overview and for sharing the future road map of DiversIQ.  What are some of your core values that you feel through every rendition of this platform has stayed true to your core? Yeah. I would say, like, one, we’re the anti-black box.

Josh Ramer

We have transparency into everything we do. We only include information that that the company that is publicly available. We’re not, doing, you know including any sort of proprietary metrics. 

We are not soliciting information that’s not available publicly. So it’s really about the companies that are being transparent and then transparency into our data so that everyone knows you know, and it’s not we’re not just collecting data. It’s it’s resource-intensive because this stuff is hard to understand. Companies use different language. There’re different methodologies, and so when a company says we have, 30 percent of our leaders are people of color, one company may mean, like, their C-suite, their top 10 people, and one company may mean, like, manager level and above. 

Whichever number looks better given the year. Yeah. So we’re we’re doing a lot of modeling.

So we’re we’re pouring over all this reporting. We’re gathering the information. We’re seeing this is what they’re reporting or not, and then we’re clarifying a lot of the information directly with the company to say, what does this mean so that we can describe it. So when somebody looks at this data point, they know, yeah, this company has 30 percent people of color in their C-suite. This color company that says leadership is actually 30 percent of the manager level and above, which is it’s great, but it’s like 30 percent of workforce is at the manager level and above. So it’s giving them it’s a lot of helping them to save the time of having to go find that themselves and giving them the comfort that what we’re doing is is the way they would go about doing it.

Right? It’s the same thing when we say this is the board makeup of this company. It’s not just like, hey. This company’s board is 30 percent racially and ethnically diverse, and they have two black members and one Hispanic members. It’s actually, here’s the link to the validation of how we’re confident that that’s how these people seem to identify, and so it’s that you know, it’s and it’s oh, and this information was updated two days ago, and so you know that it’s really timely.

Dan

So it sounds like I’m hearing transparency, reliability, and timeliness.

Josh Ramer

Yeah, and granularity. You know, a lot of we’re competing against vendors that cover tens of thousands of of securities, and they have a lot of resources, and they can do a huge amount of you know, they’re covering a lot more. We’re we’re very focused diversity and human capital. Yeah. We’re not automating and we’re not using AI to say this is the data and here’s what it means. We’re doing that all and it you know, we we have analysts that are ensuring, completeness, accuracy, and timeliness of all this information, and we’re giving you insight into exactly what we’ve done and allowing you to see exactly where it came from.

Dan

Fantastic. Fantastic. Very last thing. Anything that you’ve noticed this week that you want to highlight? The highlight or headline of the week for you?

Josh Ramer

Yeah. I saw that, Ken Paxton is that his name, the the attorney general of of Texas, met with, several companies who have been blacklisted from doing business with with the Texas state government because it’s felt that they’re discriminating against fossil fuel companies or they’re they’re, boycotting fossil fuel companies because they incorporate ESG factors into into their process or like, someone at their company said something about ESG. No. it’s mostly you know, a lot of the large, asset managers and advisors and investors have been either banned from doing business with several state government governments or there’s several state governments that have made it a felony to incorporate risk factors into your investments.

So I think I think New Hampshire was the one, and I don’t want to say New Hampshire if it’s not, and I’m going to no. I think I think you could, like, go to jail for 20 years if you’re found to have been incorporating nonfinancial factors into your decision making.

Dan

ESG, the other boogeyman.

Josh Ramer

JP Morgan recently put out their annual report, and Jamie Dimon’s letter to stakeholders, and there’s a whole section on community outreach and Diversity, equity, inclusion, and I’m just going to read the the paragraph that stands out one me. He said, “We believe that companies and banks in particular must earn the trust of the communities and countries in which they operate. We believe and we are unashamed about this. That it is our obligation to help lift up the communities and countries in which we do business. We believe that doing so enhances business and the general.”

“The approach is integral to what we do in great scale around the world and it works. We are quite clear that whether our efforts are inspired by the goodness of our hearts as philanthropy or venture type investing or good business, we try to measure the actual outcomes.” 

So that is the CEO of the largest or one of the largest banks in the world. You know, just reiterating his commitment and kind of repeating a lot of the things he’s been saying. Other And I think it’s, it’s interesting, and it’s very different from what we’ve been hearing or not hearing from a lot of other leaders who who don’t want to get involved in the fight. We’ve seen some companies that have tried to stand up and say things, and it’s hurt their business, and so I understand the, the fear.

The hesitation to do something like that, and oftentimes, it’s probably coming from legal departments, but also, we’ve seen companies that have done things, that they probably regret at this point and that has really hurt has really hurt their business. So I think he’s in a position, and they’re a company that’s in a position that can do that. I think Blackrock has been very open about it in the past, and have often included language like that, and this latest year, he refrained from talking about it. So there’s not a lot of, you know. I don’t think there’s a lot to gain for Jamie Dimon and JP Morgan there.

I guess he feels like it’s still a competitive differentiator for them, and it’s important that for their the communities, they do business in, their employees and their vendors that this is that he’s reaffirming that commitment. It offsets the risk that they’re going to lose the business of several state governments and underwriting municipal bonds and you know, managing retirement funds in those states. He’s he’s taking the long view.

Dan

Great. It was interesting. I’m wondering I’m wondering if he’s going to become the new poster child for, ESG funds. If they’re going to start to lift up his language and his voice.

Josh Ramer

He didn’t say he didn’t he didn’t say so much about ESG, and he did talk about outcomes and about measuring success, and I think he’s somebody who’s talked about we’re going to try things, and if they don’t work, we’re going to stop doing them, but he also was very against, Bitcoin and cryptocurrencies for a long time, whereas whereas others were embracing it because they they saw the riches, and the gold at the end of the rainbow, and you know, I know that they’ve you know, I think he’s less his comments are less threatening about crypto, but they still haven’t been as active. But, no, I think, he’s been and he’s also what what did he say…a full throated, red blooded capitalist.

Dan

Yeah. Surprising to hear this from him, him doubling down on this.

Josh Ramer

Yeah. So it’s rare to see a leader that is is reaffirming those values that that openly and honestly.

Dan

That’s great. That’s great. Josh, thank you for your time today. That’s just about the time we have. We really hope that you enjoyed today’s episode. If you like this content, there’s plenty more, and you can check that out on diversiq.com. That’s diversiq.com. We have blogs, articles, white papers, and webinars on topics like this, and if you join our newsletter at diverseiq.com/newsletter, we will send you all of those things directly once a week. Thank you so much for dialing in, and we’ll talk to you next week. Josh, anything to sign off?

Josh Ramer

No. That’s it, Dan. Thanks, and have a everyone have a great weekend.

Dan

Have a great weekend. Happy Friday.