Economically Disadvantaged Woman-Owned, Veteran-Owned Small Business

Welcome to the CLEAResources ComplianceCommando™ Blog! Today we address the critical terms and vocabulary for corporations to know in order to address social equity issues. There has been a steady crescendo of voices calling out social justice and equity issues for a few years now, leading to a more robust and long-overdue dialogue about the work that needs to be done to attain “Liberty and Justice for All.” What does this mean for businesses and corporate compliance and ethics? What role should businesses play in advancing social issues, if any?

The concept of companies advancing social issues is not new. In the first quarter of the 1900s, a prominent banker created the Cleveland Foundation which was formed to fund various community and social issues. In the middle of the century, business owners such as Robert Wood Johnson (Johnson & Johnson) and Milton Hershey (Hershey Company) made corporate donations to support various social issues and causes. In the 21st century, social media has thrust companies into a position of needing to have an almost instantaneous response to social issues as pressure can rise quickly from consumers in the form of viral posts, demands, and boycotts. 

Even if your company is still sorting out what actions to take or changes to make, the critical first step is vocabulary – understanding the critical vocabulary that frames the issues. 

Let’s start with “DEI.” The distinction between diversity, equity, and inclusion (DEI) is often not recognized or understood, and many assume they are interchangeable terms. However, they are distinct terms that work together to lead to the desired goal. It is critical to know the definitions and implications of each term to address the totality of the challenge of social justice. 

The Creative Strategies for Change (CSC) defines these terms in a convenient way. “Diversity” is defined as the differences within a group, and the level at which those differences are represented. Simply accomplishing diversity in the workplace is not enough, however, if those diverse voices are treated differently or have no voice. 

“Equity” can be thought of as promoting an environment that does not involve inequality or polarity. An equitable workplace does not mean everything is “equal” for each employee, rather it means that the playing field is level and fair. “Inclusion” then describes the principle that people of all characteristics and differences should be given equal opportunities and have a voice. A diverse workplace that does not offer equal opportunities to certain subgroups, and does not offer them the same “seat at the table” as others who are not considered diverse in that workforce, cannot achieve social equity in the workplace. 

Boards, management, human resources and compliance and ethics professionals must understand these terms to effect change, but it is equally essential to know how a lack of DEI presents itself in a workplace. Racism and bias are just two examples of threats to effective corporate DEI efforts. It is the job of leadership in a business to ensure that policies are clear, processes are scrutinized, and all employees are trained on how to make a workplace diverse, fair, and inclusive for everyone. It’s also the responsibility of management to encourage and facilitate diversity by developing policies and processes that promote diversity, equity, and inclusion. They should also consistently monitor DEI in the total work environment by auditing compliance with policies, the effectiveness of policies, and encouraging a speak up culture to ensure they learn about areas for improvement. I am reminded of an old military saying, “you don’t get what you expect, you get what you inspect.” Those who do not comply with corporate expectations must be held accountable in order for DEI initiatives to effect change.

Assessing the need for adjustments to a corporate DEI compliance framework should be a frequently recurring compliance task. It is risky to wait for public shame or a charge of discrimination; the goal is to continuously educate on how to improve DEI. The first step towards promoting social equity as a corporate core value and implementing DEI initiatives is understanding these key terms.