Market Insight

A New Year for Diversity, Equity and Inclusion Strategy & Three Legal Questions Tech Companies Should Consider

For years, technology companies of all sizes have set ambitious goals around cultivating a more diverse workforce. Immediately following the 2020 killing of George Floyd, companies and communities nationwide began to make more conscious efforts to address systemic racism and racial injustice. This is part of a broader series of social justice movements including #metoo, those supporting indigenous peoples and ongoing LGBTQ+ rights initiatives that have had a far-reaching impact on society and business. Small and mid-sized technology companies have been no exception, substantially increasing their focus on creating more diverse, equitable and inclusive (DEI) cultures.  

As we approach the start of 2022, the New Year is a good time for these companies to assess where their current DEI efforts stand, how they can do more and to consider a few legal questions to keep their programs on track. Recently, we addressed this topic during a TechGC Private Virtual Dinner with more than two-dozen heads of legal departments at technology companies in attendance.

Every company is of course unique, and there are no shortcuts to creating a more inclusive and diverse workforce. However with the right foundation, an emphasis on strategic growth and a conscious effort to keep programs functional and above-board, DEI efforts can make a long-lasting positive impact. What follows are recommendations from our presentation.

Step 1: Getting the Basics Right

Getting started can seem daunting, but companies can see results by focusing on one or two building blocks, and developing better processes and habits. Here is a list of areas to focus on when getting started:

•       Building a stakeholder map

•       Analyzing your supply chains

•       Focusing on talent pipelines

•       Creating means for internal and external reporting on key performance indicators

•       Developing employee resource groups

•       Managing educational and social programs

•       Establishing inclusive leadership competencies for managers and executives

This is a simple and efficient way to begin weaving DEI practices into various facets of your business model. By selecting one or two areas, you’ll be able to see what works and what doesn’t as you expand. Be cautious about taking on too many projects at once, however, because you’ll need to measure and cultivate these programs in order to see successes.  

Step 2: Measuring and Nurturing

Once you’ve selected and secured stakeholder buy-in for a DEI initiative, you’ll need to develop practices to keep your efforts on track. Here are a few potential mechanisms that you could strategically employ in the development of your programs:

•       Engaging in structured listening

•       Building clearly defined objectives

•       Making the moral and business case to your internal groups

•       Developing both systemic and individual approaches

•       Constructing accountability mechanisms

•       Structuring continuous feedback loops

These approaches will help companies to track and maintain their efforts, and to see which programs are performing and what needs to be reevaluated. Designating an individual as responsible for hitting a clearly defined target for each program is the structure you’ll need to see results.

Step 3: Managing Legal Risk

As companies engage more deeply in their DEI efforts, they are often confronted with situations where ethical, social and legal repercussions are unclear. Here are three overarching questions that employers should consider as they grow their DEI programs:

1.     Hiring – How do we actively recruit and onboard underrepresented talent without legally discriminating against those in the majority?

2.     Data and Transparency – What demographic diversity data can and should we share internally and externally?

3.     Day-to-Day – Is it possible to treat employees differently if we have a legitimate reason to do so?

Here’s an example: Your company is looking to add more women to its executive ranks. The CEO tells the Head of Talent that he wants to hire a female VP of Marketing. Accordingly, the Head of Talent tells her recruiting team to give special weight and priority to female candidates. In order to increase the chances of getting more female candidates, the recruiters make targeted outreaches to female-focused marketing business groups. How would you navigate this situation and avoid potential legal challenges?

DEI efforts are an important and ongoing initiative for most technology companies. There’s no better time than the New Year to reassess efforts and take a more thoughtful, strategic approach to your programs. And by keeping these legal considerations in mind, companies should be able to fully support DEI programs and protect their progress.

Sheeva Ghassemi-Vanni & Mira Dewji
Sheeva Ghassemi-Vanni is a partner in Fenwick’s Litigation and Employment Practices Groups. Mira Dewji is Fenwick’s Director of Diversity, Equity & Inclusion.