DEI and Crisis Management: Staying the Course in Uncertain Times

March 24, 2020 |
2 minute read
|

The times we are living in are unprecedented. On March 11th, the World Health Organization (WHO) declared that the spread of COVID-19 constituted a global pandemic. Currently, in the U.S., the virus has officially spread across all 50 states, forcing many cities and municipalities to put measures into place in order to protect the populace. Social distancing, sheltering in place, business closures and other measures are being employed to mitigate the spread of the virus to more vulnerable members of the population. Due to this pandemic, the markets are reeling, having fallen 30 percent from its peak in just a few weeks.

During times of financial distress, many institutions tend to disengage from important Diversity, Equity and Inclusion initiatives (DEI). For example, during the economic crisis of 2009, while some colleges and universities held on to gains made with DEI efforts, many others cut resources to support DEI initiatives.[1] Also, in the for-profit sector, many firms that had made strategic investments in DEI work cut jobs and initiatives meant to support those efforts. When times are good, institutions in the for profit and nonprofit sectors focus on DEI, but when there is distress and uncertainty, often DEI initiatives and departmental budgets that support the work are frozen or slashed.

It is understandable that DEI initiatives might be perceived as “nice to have” when times are good, but the reality is they are even more important when social and economic conditions are uncertain. New research shows that DEI efforts present a potent source of strength for organizations as they weather tough times.

In 2019, Great Place To Work, the global experts on workplace culture, discovered that publicly traded companies with highly inclusive workplaces thrived before, during, and after the Great Recession, and gained on average a 4x greater stock return than the S&P 500.[2]

Great Place To Work also considered employees’ abilities to innovate, the company’s values, and the effectiveness of their leaders. In addition, the ranking measured the diversity of the company’s overall workforce as well as across management, senior leadership, and its board of directors. This latest research adds to the evidence that workplace equity is not only the right thing to do, it makes firms more resilient, more innovative, and is ultimately better for business. Research done by the National Council of Nonprofits shows similar advantages. Nonprofits that focus on DEI and do it well are higher performing and are better able to advance the nonprofit’s mission, innovate programmatically, and engage more diverse donor demographics.[3] These advantages benefit nonprofits when times are good and also make them more resilient when social and economic conditions impact funding, programming, and operations.

More diverse and inclusive firms, institutions, and organizations are more resilient, better able to innovate, and keep employee morale and engagement high during times of distress.

In this time of Corona, social distancing is what is being asked of all of us, but really, it is more a matter of physically distancing ourselves. Socially, in a lot of ways, we are more connected than we have ever been. COVID-19 is not an economic issue, a racial issue, a gender issue, an age issue, an LGBTQ issue, it is a collective human issue.

We are still in uncertain times, and the collective strides we are making on DEI are more important than ever before, we must stay the course. By including, honoring and activating the many perspectives, ideas, and identities that we all bring forth, we will take care of business, take care of each other, and weather this storm together.

Visit our Commonfund website today to learn more about responsible investing. 

 

Endnotes:

Above the Law, Recession’s Impact on Diversity Initiatives, 2010

WE Magazine For Women: Diversity in a Recession, 2010

Fortune, New Study Reveals Diversity and Inclusion May Be The Key To Fighting the Next Recession, 2020

HR Dive, Diverse, inclusive companies have an advantage during recessions, study finds, 2020

[1]Diversity Takes a Hit During Tough Times, Chronicle of Philanthropy, 2009

[2] Great Place To Work: What we Learned-Our 2019 Workplace Research Highlights

[3] National Council of Nonprofits, Why Diversity, Equity, and Inclusion Matter for Nonprofits

George Suttles

Author

George Suttles

Executive Director

Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

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To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

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Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.