Partner Ronald Machen, lead author of How to Advance Corporate Diversity in Compliance with the Law: A Toolkit, discussed civil rights and racial equity audits in a Q&A featured in the latest edition of KPMG Board Leadership Center’s Directors Quarterly.
Excerpt:
KMPG: Could you talk about the purpose of a civil rights or racial equity audit and how companies may benefit from conducting such an audit?
Ronald Machen: Today, it’s routine for companies to say they’re committed to DEI [diversity, equity, and inclusion], but how do you demonstrate that? Companies often will need to take a step back and evaluate their policies and practices to determine whether they are actually promoting DEI internally and externally. Unintentionally, a company’s policies and practices might be tainted by implicit bias that is not apparent but that has an adverse impact on the hiring, promotion, and retention of diverse talent throughout the organization. The NFL’s Rooney Rule, for example, was adopted to ensure that at least one diverse candidate was considered when hiring for head coaching positions. This was done because even when those who are making hiring decisions are not engaging in intentional discrimination, implicit bias and other factors could be hindering progress on the DEI front.
After the murder of George Floyd, many companies made statements on racial equity, including commitments to donate money to and to promote equity-focused causes. However, the question has become whether those companies actually fulfilled their promises for promoting a fair and inclusive workplace as well as a more inclusive and just society at large. To answer these questions, organizations are starting to examine not only whether they have followed through on their own commitments but also whether the initiatives they have undertaken have had the desired impact. A civil rights or racial equity audit may help a company evaluate how it is doing in meeting its public commitments—not just to its own internal workforce but to its external stakeholders, such as its customers, franchisees, and suppliers.