Reinstating the importance of diversity, equity and inclusion

Companies that stress on DEI are more likely to be considered as "industry-leading” with talent that is of "high-calibre”.

MANY companies in Malaysia today are beginning to see the benefits of integrating diversity, equality and inclusion (DEI) within their workforce.

These three distinct yet closely related elements help to create a working space that perpetuates respect and fairness, by promoting equal access, opportunity, employment and team spirit among all levels of employees.

Those who are underrepresented within a company would have more access to contribute and be rewarded for their efforts.

By nurturing an inclusive workplace culture, companies will have more ideas and fresh perspectives that help to foster closer relationships within employees that ultimately results in a stronger organisation.

This is not merely an altruistic notion, but backed by statistical evidence: A study by Linkedin showed that companies that maintained a DEI team are 22% more likely to be considered as “industry-leading” with talent that is of “high-calibre”.

These companies are also 12% more likely to be seen as an “inclusive workplace for people of diverse backgrounds.”

Similarly, in a 2020 study, global management consulting firm McKinsey & Company noted that “the most diverse companies are now more likely than ever to outperform less diverse peers on profitability.”

When companies bring together people from different backgrounds, decision makers would have access to a variety of perspectives that would ultimately help them reach out to a wider range of audiences and potential customers.

It is through the diversity of its employees that these companies become more competitive, and when augmented by equity and inclusivity, these employees will feel represented and are more likely to remain loyal to stay than leave.

However, multinational professional services provider PwC noted that companies tend to focus on the diversity of its employees, yet tend to downplay the importance of the inclusivity metric, as diversity is simply done by setting targets and then tracking the outcome.

For the equality metric, and indeed the inclusivity metric as well, it involves the company’s culture and that will take time to evolve.

Considered “harder to pinpoint and to measure, hard to change,” PwC recommends setting a dual approach, whereby companies should implement short-term diversity-focused KPIs alongside a long term vision that addresses behavioural norms.

These should be backed by a strong top-down commitment and role-modelling.

On the local level, DEI has emerged at the forefront and recently several corporations have stood out in making the case for that.

Retired Maybank chief executive officer and 30% Club Malaysia chair Datuk Ami Moris said in a previous The Star article that DEI metrics are the driving forces for the mobilisation of human or people capital.

“To thrive sustainably with resilience, successful companies typically need four types of capital: human capital together with financial, infrastructure and intellectual capital — that form the foundation from which organisations are built,” added Ami.

In a forum held in March, Khazanah Nasional managing director Datuk Amirul Feisal Wan Zahir mentioned that DEI practices should not be seen as a “nice to have” but instead is central to how an organisation should be.

“Diversity of thought is necessary for any type of business,” he said during a virtual forum organised by The 30% Club Malaysia to commemorate the International Women’s Day.

Prime Minister Datuk Seri Anwar Ibrahim had also stated, during the launch of the International Women’s Day event in Kuala Lumpur on March 8, that all private companies should have at least 30% of their senior leadership, comprising women, where at least 30% should be represented on all boards of directors by 2025.

During the launch, Institute of Corporate Directors Malaysia (ICDM) president and chief executive officer Michele Kythe Lim had said, “We have seen the benefits of diversity and correlation between better corporate performance and diversity on boards which includes gender.”

ICDM initiated the Board Diversity Study and Index in 2021 as a platform for companies to promote and support the cause for better diversity on boards.

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