The Advisors' Blog

– Broc Romanek

Here’s an excerpt from this Willis Towers Watson’s panel summary about diversity on compensation committees:

When asked if diversity objectives should be included in the management incentive plan, Ms. Mulcahy said that one cannot “comp” everything. Diversity goals should not be hardwired to the compensation plan, but they should be part of management’s subjective evaluation – part of a people engagement dashboard – where the board and/or the CEO can provide constant feedback to management. The management team will soon get a picture of how it’s doing. “It is a system and not just one thing you are doing…When it becomes consistent over the long term and successive leaders are championing it, you develop a reputation and that compounds the benefits of it. We created that reputation (at a former employer) and had diverse candidates lining up.” I&D has to be embedded in every part of the employee life cycle from recruitment, to promotion and separation.

Mr. McCormick shared that one company deliberately conducted exit interviews using senior leaders who had the same diverse attributes as those of the departing employee. This led to more honest feedback and better insights on why employees were leaving.