Why we must learn to read the fine print on arguments against DEI

Since the collapse of Silicon Valley Bank — the bank of choice for the venture capital and private equity crowd and the second-largest bank failure in US history — many pundits have speculated about its demise.

As with all major events, a multitude of factors played a part in SVB’s downfall, such as the failure to account for rising interest rates; the drying up of venture capital, which forced startups to draw down funds held by the bank; uninsured depositors; and a lack of regulatory oversight.

What didn’t contribute to its demise is the “45% women, one Black, one LGBTQ+ and two Veterans”, who sat on the board and oversaw the bank’s operations, but it seems that The Wall Street Journal columnist Andy Kessler missed the memo.

“Was there regulatory failure? Perhaps. SVB was regulated like a bank but looked more like a money-market fund”, he wrote in March.

“Then there’s this: In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘one Black,’ ‘one LGBTQ+’ and ‘two Veterans.’ I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”

Unsurprisingly, the pile-on was swift, and journalists and leaders alike have called out Kessler. While some of his points are warranted, Kessler’s commentary has opened the gateway to address and analyse the mindset underpinning this thinking — especially at a time when so many companies are investing in diversity, equity and inclusion policies (DEI).

Resistance to change

No matter the policy or topic, there will always be people who feel threatened by change. Until recently, the fact that white men dominated the world was not in question. But as society moves on and culture changes, more organisations realise that focusing on DEI is ethical and makes good business sense.

Kessler’s commentary indicates his resistance to change, and the fact it was published in such a prominent newspaper shows, unfortunately, that there is still an audience for this.

People uncomfortable with change are looking for an excuse to justify why the old guard is still the best way forward, and Kessler has provided them with an argument: that the pendulum has swung too far the other way when it comes to DEI.

As this backlash against diversity grows, all sorts of failures, no matter how illogical, will be attributed to companies protesting diversity efforts over so-called “best person for the job” rhetoric.

The merit argument, while worthy, makes sense only in an ideal world: a world where diversity and inclusion are just a normal part of everyday life, as unnoticed as the office carpet. It is a world where social structures, constructed off the back of colonialist and patriarchal principles, no longer apply and where everyone, regardless of race, gender, sexuality or ability, is considered only based on their experience and talent.

Unfortunately, we do not exist in this world, so we have DEI frameworks. Talent may be equally distributed, but opportunity is not. You level out this playing field by interrogating how the current “best person for the job” got his (let’s face it — it’s usually a white man) position.

Misconstrued facts

Despite no evidence supporting the correlation between DEI and lack of business performance (particularly in the case of SVB) — research supports just the opposite — the fact Keller even raises this possibility shows tunnel vision or, at worst, a deliberate attempt to misrepresent information.

During the financial crisis of 2008, the approximately 24 financial institutions that either collapsed, got acquired, or bailed out were almost exclusively led by white, middle-class men aged 50 or older. Yet no one commented that a lack of diversity was the problem.

As researchers Robin Ely and David Thomas eloquently explain in this Harvard Business Review piece, it’s unrealistic for a business to take the “add diversity and stir” approach and expect immediate results (this usually means shareholder earnings).

The commitment to increasing diversity must be based on a genuine desire to see a change in the workplace and an understanding that tapping underrepresented people’s identity-related knowledge and experiences as resources for learning will enhance every aspect of the organisation — and not just its profits.

Diversity as the norm

I cannot wait for the time when diversity is no longer an add-on consideration to the day-to-day running of a business but a simple fact of life. Airtasker founder Tim Fung and former CEO of David Jones Paul Zahra are both vocal proponents of the importance of embodying diversity within an organisation’s core ethos.

Executives must actively consider what diversity and inclusion mean to their business and why it is essential. Most companies, no matter the sector, cater to everyone, and making decisions at the top without consulting with a wide variety of people has proven detrimental.

As Ely and Thomas point out: “leaders must acknowledge that increasing demographic diversity does not, by itself, increase effectiveness; what matters is how an organisation harnesses diversity and whether it’s willing to reshape its power structure.”

Broadening our notion of success is also paramount. Success isn’t just about maximising shareholder returns but about learning, creativity, flexibility, and human dignity.

So when people like Kessler misconstrue the value of diversity in the workplace and deliberately ignore facts, we must look beyond the words and consider the fine print: why is he saying this? Who is the person writing or speaking, and where do they come from? And what do they stand to gain from pedalling their view?

As a society, as organisations and as individuals, we must strive to bring people who are disengaged, misinformed and are serving as blockers on the journey to understanding why DEI is beneficial. This can be done through dedicated programs — like allyship training — which foster a psychologically safe environment to accelerate understanding, acceptance and engagement with diversity.

Intentional action is needed to engage everyone if we are to accelerate progress. Organisations can’t afford to be complacent, otherwise the time, money and resources they’re spending on DEI are continually being wasted and undermined.

Sarah Liu is the founder and managing director of The Dream Collective.