Are DEI promises kept when measured?

Setting the stage for change

Several pivotal events over recent years have exposed the many forms of inequity, discrimination, and social injustice in society—some of them blatant, some of them subtle, and some arguably harmful and counterproductive. At the same time, the arrival of COVID-19 and the subsequent need to work remotely disturbed employees’ work/life balance throughout the global workforce.

The revelation of potential biases and the inequitable impact of the pandemic on different demographics were among some of the forces that galvanized efforts to improve DEI within the workforce. Organizations that had yet to address DEI often found themselves at a competitive disadvantage in attracting and retaining scarce talent. Those that already had DEI programs underway largely recognized that they needed to do more—not only to attract talent but also to empower their current employees to be their authentic selves at work.

In this three-part series, produced jointly by Deloitte, the Internal Audit Foundation, and The Institute of Internal Auditors, we discuss the opportunity and obligation of internal audit (IA) to foster a DEI culture by starting within its function; IA’s role in recruiting, retaining, and developing diverse talent; and the role the IA function plays in sustainability.

Part 1: Assembling the power of mindset and metrics

It’s simple. When people continue fighting against bigotry, biases, and systematic oppressions, organizations must lead from the front, including advocating for and hiring from underrepresented communities. But a diverse workforce alone isn’t enough. Businesses must focus on improving inclusive and equitable mechanisms across the whole organization. It’s imperative to design and establish a system that monitors the performance of DEI initiatives and empowers leaders with actionable metrics to make decisions that build the foundation of a fair work culture. To do this, organizations need people who can identify risks, investigate data discrepancies, and weigh the possible outcomes of an initiative with the same rigor and discipline of carrying out any strategic business initiative. In other words, many of the skills required to assess the success of DEI initiatives are core skills of internal auditors.

Part 2: Driving an inclusive culture

Many studies have confirmed that diverse organizations are more innovative and productive than homogenous ones. High-growth brands (defined as those with annual revenue growth of 10% or more) are more frequently establishing specific performance metrics for DEI than their lower-growth competitors are. While the business case alone is compelling, the changing workforce dynamics are a juggernaut that could shift the prevailing view of DEI proficiency from merely beneficial to essential.

With highly educated young professionals increasingly seeking out employers who are committed to making an impact in the world, the need to develop a diverse and inclusive workforce is largely a given. To get there, many companies will need to update—if not redesign—their recruitment and retention strategies. Internal audit can help facilitate this shift. A modern internal audit function is responsible for much more than traditional assurance activities. It has an opportunity to foster the inclusion of DEI in recruitment, retention, and development, both within the function itself and throughout the organization. More specifically, it can assist in creating allies and driving an inclusive culture by fulfilling the roles concerning DEI in alignment with the organization’s human resources and legal policies.

Part 3: Getting in the driver’s seat and accelerating DEI efforts

Internal audit can apply audit techniques within its own function, at the enterprise level, and among stakeholders to support management in achieving its DEI objectives. This can be accomplished by providing insights into cultural risks and assessing DEI initiatives. However, the process of catalyzing DEI progress throughout the broader organization should begin by taking actions within its own four walls. This can be achieved by taking steps like assessing internal audit-specific DEI programs, evaluating internal audit’s recruitment, learning, and development activities, and helping design a DEI road map for the function. Along the way, internal auditors should support senior leaders in achieving their DEI objectives and advise them on risk considerations for engaging with increasingly diverse and vigilant groups of internal and external stakeholders. Doing pulse checks can help track DEI progress and refine strategies based on the results.