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Fortune | Why Diversity and Inclusion Data Matter in a World of Stakeholder Capitalism

Online

Nov 17, 2020
| Tue 12:00 PM - 12:50 PM EST

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Last August, the Business Roundtable took a huge step forward in our journey to equity for all when they nobly redefined the purpose of a company. Since then, progress has stalled.

Without updated performance indicators, business leaders across the US will struggle in their pursuit of leading companies “for the benefit of all stakeholders,” including customers, employees, suppliers, communities, and shareholders.

As it stands, mainstream criteria used to evaluate organizational success stems from financial documents such as P&L reports, balance sheets, income statements, cash flow, and the like. These documents bode well for shareholders seeking to measure the performance of a company. But for the other cohorts of stakeholders, including customers, employees, suppliers, and communities? Not so much.

For businesses to tangibly expand their shared commitment of excellence to all stakeholders, then the scope of their reporting must go beyond traditional financial data. In other words, businesses need a new set of KPIs.

In a world of stakeholder capitalism, the performance of a company will depend on how well it takes care of its customers, employees, suppliers, communities, and shareholders. To that extent—and as accelerated by stakeholder capitalism and renewed calls for racial justice—companies must improve their collection on diversity, equity, and inclusion data. Only then can organizations deliver on their commitments to stakeholders. Only then will we continue moving forward in our journey toward equity for all.

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