31 minute read
UNLOCKING TRUE HUMAN POTENTIAL
An Interview with Ellyn Shook, Chief Leadership & Human Resources Officer, Accenture
EDITORS’ NOTE Ellyn Shook is responsible for helping the more than half a million people of Accenture succeed both professionally and personally. A member of Accenture’s Global Management Committee and Investment Committee, Shook is a strong advocate for inclusion and diversity and Accenture has been widely-recognized externally as an employer of choice and for its diversity efforts. A recognized thought leader and author on the topics of future of work and inclusion and diversity, Shook is a member of the World Economic Forum’s Global Shapers Community Foundation Board, the Women’s Leadership Board of the Women and Public Policy program at Harvard’s Kennedy School, and the steering committee of Paradigm for Parity. She also serves on the HR Policy Association’s Board of Directors and is an active member of the HR50 division of World50. Shook holds a BS degree from Purdue University. COMPANY BRIEF Accenture (accenture.com) is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, it offers Strategy and Consulting, Interactive, Technology and Operations services – all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. Accenture’s 537,000 people deliver on the promise of technology and human ingenuity every day, serving clients in more than 120 countries. Accenture embraces the power of change to create value and shared success for clients, people, shareholders, partners and communities.
With the impact of the COVID-19 pandemic, along with the pace of change accelerating, how is the role of the CHRO evolving?
The pandemic immediately caused deep disruption of talent markets around the world, disproportionately impacting women and under-represented populations of people. It also massively accelerated the pace of change – digital transformations that previously took years happened in months, which created a chasm between two types of companies: the leaders and laggards. Additionally, the compounding physical and mental health, financial and societal crises required employers to see their people not just as employees, but as whole human beings – perhaps in ways they never had before. As a result of these changes, the CHRO’s role also changed dramatically. For those experiencing massive employment disruption – either historic unemployment or in some cases the inability to hire fast enough – modern CHROs need to balance obligations to their organization, their people and society more broadly. They must treat people with the utmost respect and consider both the short and long-term needs of their workforce along with the vibrancy of their talent brand. They also need to collaborate in new and different ways, often across industries and even with competitors, to find new opportunities for their people or to fill roles in surging industries.
Those companies that are accelerating their digital transformations also need to identify new capabilities, operating models and leadership characteristics. Many organizations look to their CHRO to orchestrate this transformation through leadership, talent and cultural lenses.
Those who understand and focus on human needs are best positioned to emerge faster with stronger talent brands and employee value propositions. We refer to this in our research as leaving people “net better off,” which is also good for business. Modern CHROs play a critical role in accelerating transformation and caring for their people, ultimately positioning their
company to be true winners in the race for talent and for market leadership.
Will you expand on the concept of leaving people “net better off,” and what actions CHROs and their peers in the C-suite should be focused on?
This past year David Rodriguez, CHRO of Marriott, and I co-authored research on this topic, and a clear message to the C-suite emerged. As the pandemic passes, people will again have a choice in who to work for – we are seeing signs of this with talent shortages Ellyn Shook in many sectors. Savvy leaders recognize that building trust and helping their people become what we call “net better off” will win in the future. Our research found six key human dimensions that contribute most to leaving people “net better off” at work, and unlocking over two-thirds of an individual’s potential. There are the obvious ones: providing a job and a paycheck, and meeting their physical needs, which have been amplified throughout the pandemic. But many companies stop there. It’s the other three dimensions that matter most to help people fulfill their potential: providing a sense of purpose, meeting their relational needs and sense of connection to others, and supporting their emotional and mental well-being. When leaders fail to look across all six dimensions, they leave opportunity on the table. When organizations leave their people “net better off,” our modeling shows they also see a boost in financial performance, even in challenging economic times. Again, taking good care of people is good business.
Taking care of people also implies an inclusive workplace. How engrained is diversity and inclusion in Accenture’s culture and values?
At Accenture, the tone is set at the top. The activations and ideas across any company need to start with true business commitment. Our CEO and our Board of Directors set the tone for our inclusion and diversity approach which is grounded in two fundamental beliefs. First, that equality, inclusion and diversity make us smarter and more innovative. Second is our shared success mindset – embracing change that benefits all our stakeholders: our people, clients, shareholders, partners and communities.
People, culture and inclusion and diversity are topics at every board meeting. We are very intentional about creating a culture of equality that’s underpinned by four cultural building blocks – our beliefs, behaviors, how we develop people and how we do business. Having a strong cultural grounding is so important because it helps organizations move beyond episodic reactions to creating sustainable and equitable change.
In a talent-led business like ours, this translates into the commitment we make to our people to help them be successful, both professionally and personally. At the heart of this is a fundamental belief that we treat our people as human beings, not just employees, so they can bring their authentic self to work – and to their entire life – every day. That is how you unlock true human potential.
How important is it to have diverse perspectives and experiences at the table when addressing client needs?
Our commitment also extends beyond the walls of Accenture to create what we call 360-degree value. We aim to not only deliver the financial business case, but also to partner with our clients to make greater progress on inclusion and diversity through diverse teams, help them achieve their sustainability goals, and enable them to reskill and create meaningful experiences for their people. A great example is our client Best Buy. As part of our collaboration, we are helping them not only accelerate technology innovation – they are already a leader – but also diverse talent. The company has an ambitious goal to hire 1,000 employees onto its digital and technology team over the next two years, and it has committed that 30 percent of these employees will be diverse – specifically Black, Latinx, Indigenous and women. Accenture will help recruit, train and hire this new talent.
Our research shows that equality helps to drive innovation. A person’s innovation mindset – their willingness and ability to innovate – is six times greater in organizations that foster a more equal culture. Our clients expect that we’ll bring this innovation to the work we do with them, and we all recognize we will make greater progress together than we will alone.
This also comes to life in how we collaborate with our partners to create lasting impact in our communities. For example, we recently named our 2021 Outside Counsel Diversity Award winners. For the past few years, we had recognized the general contributions of outside counsel firms. To help spark meaningful change in the industry, the awards now honor select legal service partners who go above and beyond to create a culture of equality in their workplaces and communities.
Ultimately, the world is watching – from employees and customers to partners, community members and investors – and expectations are growing. It’s not just about creating value; it’s about creating value while leading with values. Leaders are taking a hard look in the mirror and realizing that, while the journey toward equality is complex and making enduring progress can be difficult, the true risk is not to do something, but to do nothing.
Will you elaborate on some of the actions Accenture is taking to achieve progress and reach a diverse talent pool?
We have found that, as with any other business effort, the first step toward creating a more inclusive and diverse workforce is almost an obvious one: setting goals. Transparency builds trust, and publishing our goals and our progress not only holds us to a higher level of accountability, it can also accelerate the pace of change.
In 2017, we published our goal to become a gender-balanced workforce by 2025, which we are on track to achieve; we are at over 46 percent women today. And, while we had set representation goals for a number of years, in 2020 we created our own methodology for race and ethnicity representation goals in the U.S., U.K. and South Africa. This additional rigor gave us the confidence to be even more aspirational and to share these goals publicly. We combine this with complementary actions that foster a company culture of equality – one that truly supports the people that the goals represent.
To expand our access to a diverse talent pool, we adopted a skills-based approach and looked beyond four-year degree requirements. Currently, 48 percent of our roles in the U.S. no longer have this degree requirement. Considering our representation goals and census data, we were able to target select metro areas where we could accelerate progress and make a difference in those communities.
Once goals are in place, leaders must be held accountable for reaching them. We created what we call a “shared success scorecard,” which measures our top 500 leaders across five key dimensions: sales, revenue and profitability, as well as key talent retention and progress on inclusion and diversity goals. Putting people metrics on par with financial metrics is a game changer.
What other advice do you have for organizations to accelerate their progress in addition to setting goals?
Goals and numbers tell only part of the story. Leaders need to listen and understand how their people are feeling. After the murder of Philando Castile in 2016, we brought the topic of race into the workplace with our first Building Bridges conversation, allowing us to have courageous discussions with each other. This became our formula for convening conversations.
Without open dialogue, the risk of creating an atmosphere of “divisive diversity” is very real – which happens when you focus on the numbers without real cultural change. When you foster an environment where real ideas and perspectives can be shared, it’s through that exchange when inclusion happens. Being able to face uncomfortable truths, and discuss critical topics openly, make up the hard work that matters most.
Organizations also need to be laser-focused on creating a culture that supports sustainable change. They should ask themselves some key questions, including: Are we actively listening to our people and holding open conversations about equality? Can people see others like themselves in our workplace? Once people join us, are our development and advancement paths helping them succeed?•
The Beauty of Belonging
An Interview with Jane Hertzmark Hudis, Executive Group President, The Estée Lauder Companies
EDITORS’ NOTE As Executive Group President, Jane Hertzmark Hudis is responsible for leading the company’s Estée Lauder, La Mer, Bobbi Brown, AERIN, Origins, Aveda, Bumble and bumble and Dr.Jart+ brands globally. She serves on the Executive Leadership Team, is an Executive Officer of the company, serves on the Investment Development Committee, and reports directly to Fabrizio Freda, President and Chief Executive Officer. A passionate advocate of leadership development and inclusion and diversity throughout her career, Hertzmark Hudis cofounded ELC’s Women’s Leadership Network in 2017 to inspire and engage women across the organization, helping them become exceptional leaders and mentors. Her expertise has been widely-recognized by many best-in-class organizations. She serves as a Director on the Board of the Fashion Institute of Technology (FIT) Foundation and is an honorary member of FIT’s Executive Committee of the Cosmetics and Fragrance Marketing and Management Graduate Program. She also serves on the Advisory Board of the Breast Cancer Research Foundation. She has been recognized with numerous industry honors, including the FIT Vanguard Award in 2018, the Outstanding Mother Award from the National Mother’s Day Committee and Save the Children in 2017, the WWD Beauty Inc. Beauty Newsmaker Award in 2016, the HELP Hero Business Leadership Award from HELP USA in 2010, as well as the Cosmetic Executive Women (CEW) Achiever Award in 2008. Hertzmark Hudis received her BA degree from Vassar College and her MBA from Columbia University. COMPANY BRIEF The Estée Lauder Companies (elcompanies.com) is one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. The company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, Tommy Hilfiger, M·A·C, La Mer, Bobbi Brown, Donna Karan New York, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin Paris, TOM FORD BEAUTY, Smashbox, Ermenegildo Zegna, AERIN, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, BECCA, Too Faced and Dr.Jart+, and the DECIEM family of brands, including The Ordinary and NIOD.
Will you provide an overview of your role and key areas of focus?
As Executive Group President for The Estée Lauder Companies (ELC), I oversee Estée Lauder, La Mer, Bobbi Brown, AERIN, Origins, Aveda, Bumble and bumble and Dr.Jart+. My brand portfolio reflects several of the highest-growth areas of the company, including skincare and driving success across China and APAC, and with Chinese consumers around the world. In addition to my brand and enterprise responsibilities, I’m known for being a powerful brand builder. A cornerstone of my role is being a keeper of brand equity, being a creative, a storyteller and a marketer, while also staying completely in tune with what our consumer wants and needs.
I am also the founder and executive sponsor of The Estée Lauder Companies’ Women’s Leadership Network which today is our company’s largest employee resource group with more than 2,000 members globally.
How do you describe The Estée Lauder Companies’ culture and how critical is culture to the success of the company?
This year we are celebrating our 75th year as a company and I believe that a fundamental reason why we have seen decades of global growth and success is because we’ve stayed true to the values that define our special culture. Our culture is often described as being
a high-performance public company deeply rooted in family values. As a values-driven organization, we ground ourselves in respect for the individual, uncompromising ethics and integrity, generosity of spirit and fearless persistence. As we’ve grown into the global house of prestige beauty, with a portfolio of beloved brands, some things have remained constant: a drive to always bring the best to every aspect of the business; an unwavering commitment to quality; a continued focus on social impact and sustainability; and a culture of belonging that creJane Hertzmark Hudis ates a sense of family. We also manage our business for the long-term which allows our company to be guided by the principle of patient capital, and this has been true since our founding.
How critical is it for The Estée Lauder Companies to continue to innovate and where is innovation taking place in the company?
At the heart of The Estée Lauder Companies is our passion for creativity and innovation. Every day, we help millions of consumers express their individual beauty with superior quality products. Innovation has and will continue to be essential to our growth and long-term success. By staying ahead of trends and carefully nurturing emerging trends, we create multiple engines of innovation to fuel our brands so that we can meet the discerning needs of our consumers around the world. We also invest in innovation across many different verticals including technology, R&D, digital, design, analytics and data.
In the area of product innovation, we often look at our portfolio of “hero products.” Our “heroes” are products that consumers love, driving high repeat and repurchase rates because of their incomparable quality and demonstrable performance. Every brand in our company has heroes. Our most iconic heroes include Estée Lauder’s Advanced Night Repair and Revitalizing Supreme+ franchise and La Mer’s Crème de La Mer and The Treatment Lotion. Hero products such as these are the cornerstone of luxury and drive recruitment and, most importantly, brand loyalty. We continuously evaluate and invest behind our heroes to make them even more desirable with different benefits, applications and other newness. In our most recently reported quarter (FY21 Q3), skincare was nearly 30 percent larger than it was two years ago, owing much in part to the innovation in our powerful hero franchises.
How important is it for The Estée Lauder Companies to build a diverse and inclusive workforce in order to bring diverse perspectives and experiences to the table when making business decisions?
Today we have 48,000 employees across 40 countries, and we have consumers in more than 150 countries and territories. Celebrating and embracing the beauty of belonging is how we do business. Our strengths lie in the diversity of our employees’ backgrounds and individual perspectives and we know that celebrating and empowering each person’s uniqueness leads to breakthroughs. This is the reason that inclusion, diversity and equity are a driving force behind our signature creativity and innovation. We lead our business and our teams with empathy and a desire to learn from one another.
Will you discuss the ways that The Estée Lauder Companies is supporting women inside and outside of the company?
Standing on the shoulders of our female founder, Mrs. Estée Lauder, and today with 84 percent women making up our workforce, we have a leadership role to play in “walking the walk” and continuing the advancement of women. Women hold 55 percent of vice president positions and above at ELC, and on my own leadership team I’m especially proud that 12 out of the 16 leaders are women. Helping women rise in their careers is something I’ve long been deeply passionate about and aligns with the values of our company. A great example is our Open Doors program, which gives women with strong growth potential exposure to our most senior leaders, including our President and CEO. We also support women at all stages of their lives at the company, offering a range of benefits including tuition reimbursement for junior talent, parental leave benefits and flexibility for new parents, and a host of learning and development opportunities to nurture professional interests and aspirations.
This year we also announced our strategy on women’s equity. We committed publicly to achieving gender pay equity by 2023; reaching representation parity for Black women at all levels in the U.S. by 2025; expanding business-based flexibility, and more. We also launched a Women’s Initiatives Taskforce, introduced flexible work principles, and partnered with Howard University on a new program titled, “She’s Howard: Own Your Power” which kicked off during Women’s History Month in March. The program engages self-identifying female graduates with virtual networking events, a lecture series and seminars on topics such as balancing personal and professional responsibilities, navigating the challenges Black women face in the workplace, and skills for approaching salary negotiations.
There are so many glass ceilings that still need to be shattered, even in beauty which has historically been male-dominated at the leadership level. We can all play a role – regardless of level, gender or profession – in lifting women up and supporting them with the opportunities and resources they need to succeed.
You are a huge advocate for advancing women in the workplace and co-founded The Estée Lauder Companies’ Women’s Leadership Network in 2017. What was the vision for creating the Women’s Leadership Network and how do you define its mission?
As leaders in this industry, it is incumbent upon us to help the next generation of female leaders find their pathways to success. If we want to see this industry thrive, then we have to be part of its future. An impactful way to do that is to be an inspirational guide, a sounding board, and a trustworthy partner to aspiring talent – especially women. In 2017, I founded the Women’s Leadership Network (WLN) to help women build their careers at the company. Inspired by our female founder Mrs. Estée Lauder, my vision was to make ELC the best place for women to build their careers and to make our company the premiere home for female talent. In my position, I feel a personal sense of responsibility to give back to our organization, and for me there is no better way to do this than by helping to bring women up the ladder alongside me.
Today, with local chapters in North America, London, Paris, Latin America and AsiaPacific, WLN has thousands of members globally and is led by a powerful mission to support and engage all women across the company to reach their full potential to emerge as true leaders both professionally and personally.
How are you engaging The Estée Lauder Companies’ workforce in the Women’s Leadership Network?
We have a variety of programs and events that span WLN’s four key pillars: Business Alignment, Professional Development, Philanthropy and Mentorship/Sponsorship. We’ve invited a number of powerhouse women, including current and former CEOs of major organizations, to join our speaker series to inspire our rising stars with their career advice and how they made it to the top. Our local chapters also spearhead many initiatives to drive WLN engagement across our teams. For example, our Paris chapter recently launched a mentoring match app where leaders are paired up with employees based on common interests and career aspirations. We’ve also launched two sub-groups of WLN, Women in Supply Chain and Women in Technology, to support and engage women in STEM, as 66 percent of STEM positions at our company are held by women.
What advice do you offer to young women beginning their careers during this challenging and uncertain time?
The most important piece of advice I can give is to find an industry or craft that you are passionate about. If you love what you do, you will succeed. If you’re just starting out, but directionally you know what you want to do, take any job just to get your foot in the door. It’s about getting started. Once you’re in the industry or company you’re passionate about, your trajectory of growing and developing begins. Stay open to career ideas and say yes to opportunities that come your way, especially early on. Any entry-level job in an industry you love will lead you to new experiences and can shape a career path you may never have imagined.•
Culture and Values
An Interview with Brad S. Karp, Chairman; Dave Curran, Chief Sustainability and Environmental, Social and Governance (ESG) Officer; and Danyale Price, Chief Inclusion Officer, Paul, Weiss, Rifkind, Wharton & Garrison
EDITORS’ NOTE Chairman of the firm since 2008, Brad Karp is one of the country’s leading lawyers and corporate advisers. He has extensive experience successfully defending financial institutions and other companies in “bet the company” litigations and regulatory matters.
Dave Curran has more than 30 years of experience in legal, technology, compliance, risk and ethics roles. He was previously Senior Vice President and Chief Business Officer at FiscalNote, a legal AI/technology company, and held senior business and legal leadership roles with Thomson Reuters, IntraLinks, Integrity Interactive, Havas, Vertis and Campbell Soup Company. He serves as co-chair of the New York State Bar Association’s ESG Committee.
Danyale Price is the Chief Inclusion Officer at Paul, Weiss. She is responsible for continuing to develop and promote all diversity and inclusion practices across the firm, while ensuring that these principles and values are reflected in its client work, policies and daily interactions. FIRM BRIEF Paul, Weiss, Rifkind, Wharton & Garrison (paulweiss.com) is a firm of more than 1,000 lawyers with diverse backgrounds, personalities, ideas and interests who collaboratively provide innovative solutions to their clients’ most critical and complex legal and business challenges. Paul, Weiss represents the world’s largest public and privately-held corporations and investors, as well as clients in need of pro bono assistance.
Paul, Weiss has long been a leading law firm, both in its work for clients and in its leadership on diversity, equity and inclusion (DE&I) in the legal profession. What have been the keys to Paul, Weiss’ success in both?
Karp: It comes down to our professional culture and values. We have a remarkably strong collegial and collaborative culture and we share a commitment to diversity and inclusion, public engagement, pro bono and professionalism, rooted in our firm’s DNA for more than a century. Our dedication to our clients, which include the world’s most significant companies, is another key to our success. We strive every day to exceed our clients’ expectations, solving their most complicated, threatening problems efficiently and delivering a compelling value proposition, and we strive to build lasting professional and personal bonds with our clients. We have been disciplined in our growth, investing in five core, market-leading practices: public M&A, private equity, litigation, white-collar regulatory defense and restructuring.
When you combine our values-based culture and our unsurpassed talent, deep commitment to our clients and our strategic focus, that’s a powerful and compelling foundation for success.
Will you discuss how Paul, Weiss became a leader in the DE&I area, and how that continues today with renewed attention on this area, particularly on racial justice and equity?
Karp: The national movement this past year for racial justice and racial equity led us to redouble our efforts to make our firm more diverse, equitable and inclusive. Across the firm, our lawyers and operations staff have worked alongside our Chief Inclusion Officer, Danyale Price, to implement innovative initiatives around talent acquisition, talent management, training, development and engagement, and programs and policies that were developed in 2019 by a task force we created specifically to look into these issues. Danyale brings to her role two decades of experience as a diversity and inclusion professional. Her mission is to promote a diverse workforce and sustain an inclusive culture, and to ensure that these principles and values are reflected in our client work, policies and daily interactions. Increasingly, our clients are also looking to Danyale and her team for guidance on their diversity strategy and programming.
Our firm’s rich legacy of commitment to diversity provides a wonderful foundation for making measurable progress. We were the first major firm to hire a Black associate, William
Coleman, in 1949; the first major firm to hire a Black female associate, Pauli Murray, in 1956; and the first major firm to make a female partner, Carolyn Agger, in 1949. We’ve been a leader in this area for generations. Three of the most prominent Black lawyers in the United States – Ted Wells, former U.S. Attorney General Loretta Lynch, and former Secretary of Homeland Security Jeh Johnson – call Paul, Weiss their professional homes. Brad S. Karp Dave Curran Danyale Price Price: Ted, Loretta and Jeh, along with many of our partners of color, have all been wonderful examples of inclusive leaders and a source of inspiration within the firm. They have also spoken to many of our clients in the past year in various roundtables and fireside chats, as our clients have been wrestling with how to address the national movement for racial justice. Within our firm, we have also looked to our very strong Black Lawyers Network and other affinity networks for guidance. They have been helpful in offering specific recommendations to take our efforts to the next level. At their urging, we recently expanded the pool of recruits to additional Historically Black Colleges and Universities (HBCUs); overhauled our supplier diversity program; and increased opportunities for our lawyers to engage in grassroots pro bono racial justice efforts, among others. To counter the isolation many lawyers feel given the remote work situation, we identified several new ways to build greater connections and inclusivity, launching small mentorship-focused communities called Colleague Connect Circles. We have also had dialogues across the firm about racial trauma in Asian, Black, Latinx and LGBTQ+ communities, mitigating unconscious bias and allyship, and other issues of interest.
The firm launched one of the first dedicated Sustainability and Environmental, Social and Governance (ESG) Advisory practices at a law firm. Will you highlight the combination of DE&I expertise and ESG advice at the firm?
Karp: Our DE&I work and our Sustainability & ESG Advisory practice are an incredibly powerful combination that is unique in our profession. As a law firm, we can add enormous value in both areas. We launched our Sustainability & ESG Advisory practice in March 2020 to help our clients deal with the increasing importance of ESG issues. They wanted to know how they
could safely navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We recruited Dave Curran to launch the practice and he is a widelyacclaimed leader in the space who has more than 30 years of experience in legal, compliance, risk and ethics roles. Our timing was propitious; in the wake of a series of societal upheavals that accelerated the collision between ESG considerations and corporate governance, our work on the ESG front exploded. Today, virtually all of our clients are interested in taking action on the diversity and racial justice front.
A significant part of our work as lawyers on the ESG front is helping our clients mitigate potential risks as they do take action, ensuring that their public statements related to ESG goals and initiatives match their ability to track progress and meet expectations. At the same time, we can also help clients by providing insights on our own experience with evaluating our policies and procedures for addressing unconscious systemic bias and aligning our diversity commitments and statements with inclusive talent management initiatives. That’s where Danyale’s team comes in: turning a DE&I business strategy into substantive actions that create an environment where all members of the firm can do their best work and contribute to an inclusive work culture.
Price: Clients know of our leadership on the DE&I area, and they come to us because we have deep institutional knowledge and experience of building DE&I programs. We leverage this perspective to help them enhance their efforts to develop sustainable and impactful initiatives; to learn from us how to build or enhance a culture of inclusion; and especially, how to track and measure DE&I progress. We also leverage our longstanding relationships and partnerships in the DE&I area; we can help clients by introducing them to outside consultants and organizations that we trust. For clients with DE&I strategies already in place, we look for ways to collaborate and partner, and how we can help each other.
How important is it for clients to think about their DE&I initiatives through the ESG lens?
Curran: It’s critically important. Today, 90 percent of the value of companies is intangible assets – its reputation and its human resources. The market is beginning to recognize that nonfinancial assets are as important and relevant as financial assets. This culture shift is happening at the board level as well, as directors are increasingly discussing issues such as diversity, equity and inclusion and other values-driven goals. Boards and executives recognize that there is a business imperative to getting ESG initiatives right. Our client, Carlyle, recently presented at one of our ESG roundtable events on its own study showing that diverse boards in their portfolio are outperforming non-diverse boards. Many other studies have confirmed the benefits of a diverse workforce and diverse leadership.
What are some of the similarities and distinctions in the client-facing work the firm is doing in ESG versus DE&I?
Curran: Achieving ESG goals, like achieving DE&I goals, requires matching aspiration to action by tethering your commitment to the entire engine of your organization, including the C-suite, legal, compliance, finance, public relations and more. But our ESG team doesn’t tell clients what their specific initiatives should be; instead, we’re focused on helping our clients identify their ESG goals and implement those initiatives in a way that meets their business objectives and reduces risk. We are very focused on the “G” for “governance” part of ESG, how governance relates to these initiatives, and how our clients document, monitor and disclose them.
That said, the number-one governance issue at companies today is board diversity. Some states have pushed to require representation of women and people of color on boards. The bigger push has come from the private sector, from investors, and in particular, Nasdaq. In December, Nasdaq proposed setting a “recommended objective” for its listed companies to have at least two diverse directors on their boards; if they did not meet that objective, they would need to explain their rationale for not doing so. That standardsetting is currently under SEC review.
Will you elaborate on your ESG advisory work on board diversity initiatives?
Curran: The new Nasdaq board diversity standard has prompted clients to reassess the way they find new board members. The way they have traditionally done that is via individual networks. Not surprisingly, this has resulted in 80 percent of boards being white and male. Finding qualified diverse or women board members for 3,300 Nasdaq-listed companies is no simple task. We help connect clients with resources and service providers who they might not be familiar with that can help them find and connect with diverse candidates. We also help companies “pressure test” new diversity-focused processes of board recruitment; advise them on how to document it; and determine what investments they need to make to develop a robust pipeline of diverse board talent. Additionally, we host roundtables that bring together leading ESG experts across industries for dialogue on evolving practices and solutions. We recently hosted a roundtable focused on the mechanics of bringing more diversity to boards.
Will you describe ways that Paul, Weiss is currently helping clients in their diversity efforts?
Price: We are currently piloting a program to leverage technology and innovation to provide our clients real-time information about the diversity of our matter teams. We’re doing this via online client knowledge management “portals.” We’ve already been using these portals to provide real-time billing, key case or transactional documents and corporate governance documents as well as other information. What we’re hoping is that, by accessing our portals, clients don’t have to survey us about our diversity metrics months or even a year later, because they will be able to see the diversity trends and understand in real time who the people are on their matter teams. This facilitates dialogue between our clients and our partners about diversity and inclusion. We’re trying to make it easy for clients to discuss our diverse talent management strategy and the array of talent available to them for their matters.
We have also designed similar technology for our partners through a matter management dashboard which visually signals whether matters are diversely staffed as compared to firm metrics. Matter management dashboards also link to our associates’ career development plans, so as associates track the work they’ve been doing to help them assess where they are in their development and where the gaps are, partners concurrently can access those dashboards as they consider staffing future matters.
Do you believe the new attention on DE&I will endure?
Karp: We believe that the racial justice movement not only will endure, but will also become even more imperative. Organizations should be prepared to address continuing and heightened stakeholder scrutiny. We’re already seeing a renewed and more intensive focus on diversity, racial equity and racial justice within the Biden administration, both in its policy statements and agency and regulatory appointments.•
