In the early 2000s, Maryann Bruce and other senior women executives at Wachovia bank formed an affinity group called the Women of Wachovia. Within three years, WOW went from having more than 100 women to far fewer as many left the bank.
The bank, now part of Wells Fargo, had hired women but did not know how to do things differently to retain them, said Ms Bruce, who now serves on corporate boards.
“There's a big difference between diversity and inclusion,” Ms Bruce said.
“Diversity is all about counting people; inclusion is about making people count.”
While US companies have made progress in adding more gender, ethnic and other types of diversity to their ranks in recent years, some of the same problems that WOW faced persist.
A Russell Reynolds Associates global survey last year, for example, of about 130 senior executives who had left their jobs showed the top reason women gave for leaving was that they felt undervalued.
Now increasingly, corporate directors, academics and other governance experts are calling for companies to focus more on retaining and nurturing the people they hire.
Among the components of diversity, equity and inclusion – DEI – they argue a focus on the latter two themes is crucial to make diversity more than just a box-ticking exercise and necessary to reap its benefits.
Much is at stake for companies. After years of academic debate, there is mounting evidence that companies that score high on DEI also perform better financially, the governance experts said.
The costs of failing to do enough are becoming clearer as well. Last month, Goldman Sachs paid $215 million to settle a gender discrimination case with female employees.
“Many companies took this on in a crisis management way, jumping on the bandwagon,” said Roberta Sydney, an independent director and entrepreneur, referring to the corporate diversity push in recent years. “That led to bursts of activities rather than a change-management culture.”
A long-time director who serves on three major company boards said more focus was being placed on equity – or fair treatment of employees to create a level playing field – and inclusion as some companies were finally embracing the idea that “you need D, E, I to work in tandem to truly get the advantages of having a diverse organisation”.
Companies have been adding diverse talent, especially to boards, in recent years as environment, social and governance (ESG) investing became popular and was mandated in places like California by law.
Gender and ethnic diversity issues have also risen to the forefront in the aftermath of the #MeToo movement.
John Rogers, chairman of asset management firm Ariel Investments and member of Nike and other boards, said diversity was imperative for corporate success.
If a company has a “1940s board, with all white males,” it’s a problem, he said.
“They're not thinking about creating a climate to be successful in today's world.”
Nike, for example, is among companies that understand its customers and employees care about ESG, Mr Rogers said.
“So if they don't stay cutting edge, you could lose market share,” he said.
Progress, however, has been slow, and some data suggests it has decelerated over the past year.
A Heidrick & Struggles report on the boards of Fortune 500 companies, for example, shows appointments of women and ethnic minorities decreased in 2022 compared with the previous year.
Pressure has eased from investors, too, amid a backlash against ESG in the US.
Projections for gender and racial parity in different corporate roles go out decades.
There has been debate in academia about whether diversity has any impact on the financial performance of a company, with some research showing only weak correlations and no study proving causation, according to experts.
A research paper published last month said that is because people have been doing it wrong: looking at diversity alone rather than DEI as a whole.
In the paper published by the European Corporate Governance Institute, researchers from the London Business School, Columbia University and the Federal Reserve Board created a qualitative DEI score based on employee survey responses to questions that captured how equitable and inclusive their workplace was, rather than basing it on just diversity numbers.
They found that higher DEI scores were correlated with better financial performance, while demographic diversity alone was not.
“Companies can 'hit the target, but miss the point' – improve diversity statistics without improving DEI,” the paper said.
One of the authors, Alex Edmans, a finance professor at the London Business School, said in an interview he is helping some investors consider questions to ask management to understand how the company approaches equity and inclusion.
These include asking for examples of suggestions by employees that were implemented or concrete steps taken to encourage inclusion.
The purpose is to understand whether companies are ticking the box or doing something more genuine, Mr Edmans said, adding: “It's much easier for companies to say, 'Hey, we've now got a woman on the board.'”
MATCH INFO
Barcelona 5 (Lenglet 2', Vidal 29', Messi 34', 75', Suarez 77')
Valladolid 1 (Kiko 15')
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
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The biog
Siblings: five brothers and one sister
Education: Bachelors in Political Science at the University of Minnesota
Interests: Swimming, tennis and the gym
Favourite place: UAE
Favourite packet food on the trip: pasta primavera
What he did to pass the time during the trip: listen to audio books
More from Neighbourhood Watch:
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The specs: Macan Turbo
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Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
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Available: Now
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
CREW
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MATCH INFO
Barcelona 4 (Suarez 27', Vidal 32', Dembele 35', Messi 78')
Sevilla 0
Red cards: Ronald Araujo, Ousmane Dembele (Barcelona)
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
