As organizations pull back their diversity, equity and inclusion (DEI) initiatives in droves, CFOs’ awareness of DEI’s role and value in the workplace is likely increasing. The role CFOs play in the decision-making process around these areas, especially for those tasked with collaborating outside of finance through efforts like culture development, is important as many initiatives require resources that need to be approved by the finance team.
As DEI policies have become a political tug-of-war in some workplaces — resulting in both positive and negative outcomes for businesses and individuals alike — a recent study by the Network Contagion Research Institute in partnership with Rutgers University’s Social Perception Lab found that when exposed to DEI literature before evaluating a decision with potential bias implications, survey respondents in three different groups were much more likely to accuse unwarranted racial bias.
Valuable findings for CFOs
The survey data must be qualified with the notion that plenty of research suggests when people are preconditioned with narratives, those narratives are more likely to impact decision-making.
However, as the survey notes, companies are spending an estimated $8 billion a year on DEI programs, and the slashing of such programs across companies of all sizes likely stems from a combination of cost-cutting efforts, political shifts and legal concerns.
Key findings:
- Group 1 (anti-racist reading materials):
- 12% increase in support for suspending the admissions officer.
- 16% increase in demand for a public apology.
- 12% increase in support for additional DEI training for the officer.
- Group 2 (anti-Islamophobia reading materials):
- Participants in the treatment group rated Ahmed’s trial as significantly less fair (4.92 vs. 5.25) than those in the control group.
- Surveyors noted the training led participants to “perceive injustice toward Ahmed despite the specifics of his situation being identical to those of George.”
- Group 3 (caste sensitivity reading materials):
- 33% increase in perceived caste-based microaggressions.
- 16% increase in perceived harm.
- 48% increase in the perception of Hindus as racist compared to the control group.
Risk assessment is critical for CFOs looking to or being pressured to promote DEI in their companies. Legal experts have already suggested to CFOs that hiring and promotion decisions based on race or gender “run afoul of the law” via The Civil Rights Act of 1964.
Companies incorporating DEI into their policies must be aware that they, like the surveyors here, may inadvertently promote racial bias by including ideas from authors like Kendi and DiAngelo or materials from anti-bias organizations in their training programs and mission statements. Academics, whose institutions have also abandoned DEI efforts, have been critical of the real-world positive outcomes of DEI programs within organizations.
