It is indisputable that diversity and inclusion are critical drivers of productivity and innovation for companies and our economy — and companies that leverage it are more profitable.
As the first chairwoman of the House Financial Services Subcommittee on Diversity and Inclusion, my focus has been on illuminating the incontrovertible facts that greater diversity and inclusion performance in the boardroom, C-suites and business procurement yields greater innovation, reduces regulatory risk, increases profitability and creates more sustainable business performance.
Earlier this year, in February, the Financial Services Committee and Subcommittee on Diversity and Inclusion produced a comprehensive report, “Diversity and Inclusion: Holding America’s Large Banks Accountable.” The report analyzed diversity and inclusion performance trends at the nation’s 44 largest banking institutions. While our analysis identified troubling trends regarding the lack of diversity in the boardroom, in senior leadership roles and business spending, it also found that some companies are hiring chief diversity officers, leveraging employee resource groups and linking diversity and inclusion results to performance.
I believe, without a doubt, that our work is pushing the financial services industry toward implementing best practices to improve diversity on corporate boards, in C-suites, the workforce and business diversity contracting, as well as diversity and inclusion training programs, which are all essential components to help foster greater understanding and mutual respect for all Americans. While recent progress demonstrates we are moving toward a more inclusive economy, tangible and intangible barriers to success remain.
In September, the Trump administration issued executive order 13950, “Combating Race and Sex Stereotyping.” This draconian policy will effectively eliminate diversity and inclusion training programs within all federal departments and agencies, the U.S. uniformed services and among federal contractors and subcontractors. Moreover, the executive order is an effort to return us to a time when corporate leaders willfully overlooked the lack of gender and racial diversity at the leadership table. Like so much of what President TrumpDonald John TrumpJudge rules to not release Russia probe documents over Trump tweets Trump and advisers considering firing FBI director after election: WaPo Obama to campaign for Biden in Florida MORE does, it is intended to divide us and impede leaders who are making great strides to embrace the workforce of tomorrow. I categorically reject this effort and call upon all stakeholders to do the same.
These challenges are transparently clear when we consider the three pandemics our country is confronting in 2020: COVID-19, the fight for social justice and the ongoing economic pandemic. In short, COVID-19 has endangered the physical, financial and emotional health of all Americans, and has disproportionately impacted communities of color.
The disparate impact of COVID-19 is evident when examining the Centers for Disease Control and Prevention’s analysis of rates of infection, hospitalization and death for people of color. African Americans are nearly five times more likely to require hospitalization from COVID-19, and people of color are twice as likely to be infected and die from the disease compared to white Americans. The rehire rate for furloughed workers of color lags significantly as well. As of Oct. 1, the African American unemployment rate stands at 12.1 percent versus 7.9 percent for white Americans.
The disproportionate burden of COVID-19 is also apparent when examining its effect on our economy’s small businesses. Minority- and women-owned businesses (MWOBs) closed at significantly higher rates due to the pandemic. According to the National Bureau of Economic Research, 41 percent of African American businesses closed their doors, Latinx businesses fell by 32 percent, and Asian businesses declined by 26 percent from February to April, and the numbers have likely increased since the spring. MWOBs play a crucial role in the elimination of the racial wealth gap, spur innovation and are integral to the overall health of the U.S. economy. As such, my colleagues and I have advocated vigorously for greater access to capital funding, financing tools and stimulus relief for these businesses.
We also can’t lose sight of the racial justice pandemic that confronts us. Our country is making discernable progress toward achieving the ideals of the nation’s Founding Fathers of life, liberty and the pursuit of happiness for all Americans. Unfortunately, the killings of George Floyd, Breonna Taylor and Ahmaud Arbery serve as stark reminders that the ugly stain of systemic racism endures in often overlooked elements of our society. I am heartened by the numerous companies and stakeholders who have clearly espoused their values and goals to help achieve true social justice.
The future is now, and I am hopeful that the progress we are making to eliminate the barriers of the past are both sustainable and durable. We cannot change the sins of yesterday, but we must acknowledge them and all work together toward achieving true equality and justice for all while celebrating our differences.
Beatty represents the 3rd District of Ohio and is chairwoman of the House Financial Services Subcommittee on Diversity and Inclusion.
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