Exploring the Ethical Obligations for DEI in the Workforce

Wells Fargo CEO Charlie Scharf made headlines for blaming the bank’s lack of employee diversity on a “very limited pool of Black talent.” After swift media and internal backlash, he apologized and claimed his comments were a reflection of his own unconscious bias and that it was clear that “across the industry, we have not done enough to improve diversity, especially at senior leadership levels. And there is no question Wells Fargo has to make meaningful progress to increase diverse representation." The statement aligns with the growing call for companies to enhance their diversity, equity, and inclusion (DEI) efforts.[1] However, even though many people are beginning to acknowledge the benefits and necessity of DEI, there is still the question of what ethical obligations companies have to implement and enhance diversity in their workforce.

Before we can discuss the ethical obligations for companies to incorporate DEI initiatives, we must understand what DEI initiatives are and include. According to the research published by Promise54’s Foundation Working Group,[2] we can define diversity, equity, and inclusion as the following:

●      Diversity as variation - the presence of different types of people (from a wide range of identities and with different perspectives, experiences, etc.).

●      Equity - the process of ensuring equally high outcomes for all and removing the predictability of success or failure that currently correlates with any social or cultural factor.

●      Inclusion - the process of putting diversity into action by creating an environment of involvement, respect, and connection — where the richness of ideas, backgrounds, and perspectives are harnessed to create value.

DEI initiatives are any measures executed within a company that promote the company’s diversity, equity, and inclusion as defined above. Examples of DEI initiatives include using software to simplify and standardize the recruiting process, creating employee resource or affinity groups, and training for implicit bias.[3] Although these DEI initiatives are steps in the right direction for many companies, there is still much work to be done in order for businesses to better meet their ethical obligations for DEI in the workforce. These ethical obligations for DEI in business organizations can be divided into the three categories which DEI initiatives affect: the individuals within the organization, the organization itself, and the society the organization operates within.

Individuals’ Fundamental Rights

According to Kant, humans must be treated as an end and not merely as a means. To treat others as an end is to respect each person’s dignity by allowing each individual the freedom to choose for themself. This principle is also used to justify “positive or welfare rights” as fundamental moral rights.[4] According to the Markkula Center for Applied Ethics at Santa Clara University, these welfare rights can best be described as a right to what is necessary to secure a minimum level of well-being, such as a right to education, food, medical care, housing, or a job. As such, the fundamental positive rights of individuals impose a positive duty to actively help a person to have or to do something. To uphold this duty, business organizations must not inhibit individuals from obtaining or maintaining a job based solely on their identity as a member of a minority or underrepresented group. The best way to do this is through DEI efforts such as diverse early-talent programs to identify diverse talent externally and mentorship programs to preserve and support diverse talent internally. With such initiatives, business organizations can rectify and proactively prevent discrimination to promote the fundamental positive rights of individuals.

Organizational Justice

Postulated by Greenberg, the concept of organizational justice deals with fairness to people in organizations and is derived from equity theory. Specifically, the term refers to an employee’s perception of organization behaviors, decisions, and actions and how these factors influence an employee’s own behavior and attitude at work.[5] The four components of organizational justice are (1) distributive justice regarding fairness of rewards, (2) procedural justice regarding fairness of the procedures used to determine the outcomes, (3) interpersonal justice regarding fairness of interpersonal treatment, and (4) informational justice regarding fairness of the information used as the basis for making decisions. The moral obligation for organizational justice or fairness regards the distribution and use of power to bestow benefits or impose burdens on those within the organization.[6] As outlined in Kant’s principle of treating humans as an end, all people must be treated as having the same dignity. When individuals are treated unequally based on their identity, their fundamental human dignity is violated, so organizations have an ethical obligation for promoting organizational justice, or fairness, to respect each person’s dignity. To do this, business organizations must implement DEI efforts regarding workplace behavior and structure including equitable pay and compensation packages, pipelines to jobs and promotions, and training to mitigate bias. By implementing similar DEI efforts, businesses can create a workforce that feels dignified and sequentially reduce workplace disengagement and counterproductive behaviors.

Societal Impact

The final category to examine the ethical obligation for DEI in business organizations involves the impact on the society in which the organization operates. The ethical obligations of organizations to DEI follows the aforementioned Kantian claim that humanity should be treated always as an end and never as a means as well as the Aristotelian idea that a good life is achieved in a community. Aristotle asserts that the purpose of a community is to make it possible for citizens to achieve virtue and happiness which he claims is the highest good of all.[7] The ethical or unethical choices made by businesses can have serious and lasting consequences,[8] so much so that the United Nations adopted a set of 17 Sustainable Development Goals (SDGs)[9] to focus business efforts and promote “peace and prosperity for people and the planet.”[10] Business organizations can champion for the virtuous community as Aristotle described by not only collecting and analyzing data on diversity but also by sharing information to be held accountable and comparing information to hold other businesses accountable. Such initiatives expose and suggest solutions to the bias in businesses and society. This exposure demands reparation and thus induces the community where citizens are enabled to pursue virtue and happiness. 

The arguments for DEI in business are intricate, but the initiatives and results can be succinct and consequential. Companies can begin to satisfy their ethical obligation to DEI by analyzing talent practices to identify and rectify bias in not only employees but also leadership and organizational structures. Monitoring and enhancing DEI practices in recruitment, retention, engagement, investment, and promotion is financially beneficial for businesses[11] and ultimately fosters an inclusive environment that improves employee well-being[12] and encourages a more equitable society.[13]

References

[1] Lorenzo, Rocío, et al. “How Diverse Leadership Teams Boost Innovation.” BCG Henderson Institute, Boston Consulting Group, 19 Jan. 2021, www.bcg.com/en-us/publications/2018/how-diverse-leadership-teams-boost-innovation.

[2] Padamsee, Xiomara, et al. Promise54, 2017, Unrealized Impact: The Case for Diversity, Equity, and Inclusion, www.unrealizedimpact.org/wp-content/uploads/2017/07/Unrealized_Impact-Final-072017.pdf.

[3] Bastian, Rebekah. “Corporate Diversity Initiatives Are Good For Everyone--Including You.” Forbes, Forbes Magazine, 7 Mar. 2019, www.forbes.com/sites/rebekahbastian/2019/02/25/corporate-dei-initiatives-are-good-for-everyone-including-you/.

[4] Andre, Claire, and Manuel Velasquez. “Rights Stuff.” Markkula Center for Applied Ethics at Santa Clara University, 16 Nov. 2015, www.scu.edu/ethics/ethics-resources/ethical-decision-making/rights-stuff/.

[5] Tamunomiebi, M. D., & Ehior, I. E. (2019). Diversity and Ethical Issues in the Organizations. International Journal of Academic Research in Business and Social Sciences, 9(2), 839–864.

[6] “Fairness.” Exemplary Business Ethics & Leadership, Josephson Institute of Ethics, 1 Oct. 2016, josephsononbusinessethics.com/2010/12/fairness/.

[7] Clayton, Edward. “Aristotle: Politics.” Internet Encyclopedia of Philosophy, iep.utm.edu/aris-pol/#:~:text=The%20most%20authoritative%20and%20highest,achieve%20this%20virtue%20and%20happiness.

[8] Eswaran, Vijay. “The Business Case for Diversity in the Workplace Is Now Overwhelming.” World Economic Forum, 29 Apr. 2019, www.weforum.org/agenda/2019/04/business-case-for-diversity-in-the-workplace/.

[9] “Transforming Our World: the 2030 Agenda for Sustainable Development.” United Nations Department of Economic and Social Affairs, United Nations, sdgs.un.org/2030agenda.

[10] “The 17 Goals.” United Nations Department of Economic and Social Affairs, United Nations, sdgs.un.org/goals.

[11] Fulton, Brad. “How to Turn Diversity Into a Business Imperative.” How to Turn Diversity into a Business Imperative, 21 Aug. 2019, www.ethics.org/how-to-turn-diversity-into-a-business-imperative/.

[12] Leonard, Kimberlee. “Diversity & Ethics in the Workplace.” Small Business, Chron.com, 5 Feb. 2019, smallbusiness.chron.com/diversity-ethics-workplace-4928.html.

[13] Beheshti, Naz. “Inclusion, Not Only Diversity, Should Be The Goal If We Want An Equitable Workplace.” Forbes, Forbes Magazine, 30 June 2020, www.forbes.com/sites/nazbeheshti/2020/06/30/inclusion-not-only-diversity-should-be-the-goal-if-we-want-an-equitable-workplace/?sh=19ea34fb5f49.