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Investment in diversity and inclusion initiatives—measured by dollars spent and new positions created—has never been higher. While this isn’t a new trend, it is one that picked up steam last year and prompted many to ask what else the business community should do to combat systemic inequality and racism.

“We saw it over and over on television, with our own eyes,” said Paula Price, ’88, referring to the murder of George Floyd, the unrest that followed, and the pandemic’s disproportionate impacts on Black people and other marginalized groups. “If we can witness that and not respond to it, then shame on us.”

Should business do more, and what does “more” look like?

That’s what Price, a public and private company independent board director and strategic advisor, discussed with other business leaders at “Innovating for Social Equity: The Responsibility of the Business Community,” an event hosted by the Rustandy Center for Social Sector Innovation and the Stigler Center for the Study of the Economy and the State. The Rustandy Center event series explores efforts by the philanthropic and private sectors to address the barriers that still prevent our society and economy working for everyone. (The first two examined equity through an investing and philanthropy lens.)

Along with Price, Luigi Zingales, Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance at Booth and faculty director of the Stigler Center, and Mark Hoplamazian, ’89, president and CEO of Hyatt Hotels Corporation, tackled this topic in a conversation moderated by Brian Fabes, managing director of Corporate Coalition and civic impact executive in residence at the Rustandy Center and the Harris School of Public Policy.

Business Leaders Taking a Stance on Issues

Some CEOs like Blackrock’s Larry Fink and those in the Business Roundtable have taken a public stance supporting their employees, the environment, and the communities in which they operate. Panelists debated whether business leaders making public statements about the social consequences of a decision borders on the political.

Zingales, who has advanced the idea that firms should maximize shareholders' welfare and not just profits as Milton Friedman asserted, said trying to not be political may lead to more harm than good. Being “apolitical” is another way for corporations to push their own interests over the interests of society at large. “The private interests of businesses may weigh excessively in the decisions made in the political sphere.”

Price said CEOs have the responsibility to be good citizens in the context in which they operate. “If we ever hope to get to human equality, we need leaders of all sorts, including—and perhaps especially—CEOs, to use their voices and their platforms for the greater good,” she said.

Data Shows Diversity is Good for the Bottom Line

In the last 20 to 30 years, Price said a substantial amount of research has linked diversity to innovation and profitability (including here and here).

Every form of discrimination, in addition to being unethical in and of itself, also amounts to an economic loss in terms of both talent and productivity, Zingales said. “Even if we’re purely interested in the bottom line, there are plenty of reasons we’d want to fight discrimination, racism, and a widening gap in opportunities."

In response to events last year, Hoplamazian said Hyatt created a sharper set of diversity, equity, and inclusion goals around employee representation, supporting community-based organizations, and increasing the number of minority-owned business partners.

“Caring for our own colleagues and guests means having a vibrant economy and a vibrant local community,” he said. “The idea that we can stand by and continue to witness a widening opportunity gap in the economy is extraordinarily short-sighted.”

Moving Beyond Representation to Retention

“Many businesses realize we can improve representation, but you need to not only hire but also retain,” said Price. “To do this, you must focus on inclusivity and equity.” How do you not just get diverse talent, but keep it?

Price is seeing momentum around prioritizing retention. In addition to having pipeline initiatives to bring on employees from underrepresented groups, companies must also support them with programming. She said some companies are reaching out to nonprofit organizations, who have been doing this work well for many years, to benefit from their expertise.

Hiring someone isn’t sufficient; companies need to help their employees keep their jobs, Hoplamazian said. Some of this comes down to the logistics of transportation, for example. That’s why one of Hyatt’s hospitality training programs with Skills for Chicagoland’s Future provides job seekers ages 18 to 26 with three months of free public transportation through Chicago Transit Authority in addition to paid professional development training.

“You need to really understand what’s required to actually put employees in a position where they can be successful,” he said. “This is not a plug and play solution. It takes extra effort, but there’s more impact over time.”

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