Declaring a commitment to diversity, equity and inclusion (DE&I) is a vital first step for any company pursuing those goals, but global employers may find it challenging to create a program that works effectively in their disparate locations.
Different norms, regulations and demographics in various regions can make a company’s effort to advance DE&I goals more complex. Organizations face potential risks in this area, whether they implement programs to improve workplace equality or neglect to do so.
“DE&I touches many different areas of the law, including those related to anti-discrimination and privacy, and the law can differ by jurisdiction,” said Elizabeth Polido, an attorney with Morgan Lewis & Bockius in New York City. “It’s important at the outset to think strategically about DE&I and to work with legal to determine potential legal risks and ways to mitigate those risks while still promoting a consistent approach across the company.”
Kathleen Anderson, an attorney with Barnes & Thornburg in Fort Wayne, Ind., noted the role of DE&I in successful companies. “You can’t be an expansive global or global-affecting company without being diverse and inclusive and equitable,” she said.
Local Laws Come into Play
While effective DE&I programs must start with senior leadership, companies need to be aware at the planning and execution stage that what works in one location might not work in another, Anderson said.
U.S.-based global employers need to be aware of requirements and norms in other nations.
European countries have adopted various gender pay gap equity and transparency requirements.
Legal experts note that strict data privacy laws in the European Union and the United Kingdom, such as the EU’s General Data Protection Regulation, may limit the ability to collect and process demographic data for diversity efforts.
The CMS law firm recently published a guide to workplace discrimination, covering several countries around the world. Among the questions companies should consider, the firm says:
- Is having a diversity and inclusion policy a legal requirement or a best practice in a given place?
- Will the company face risks, such as reputational harm or environmental, social and governance consequences in not implementing such a program?
- What are the workplace discrimination laws in a given jurisdiction?
- What characteristics—such as sexual orientation, gender, race and ethnicity—are protected by local discrimination laws?
Laws regarding workplace discrimination and equality “vary hugely from country to country,” CMS noted in its guide.
“Any employer working in multiple jurisdictions needs to be aware of their different duties in relation to workplace discrimination,” including their obligations in introducing workplace policies and training, the processes to follow if a worker complains of discriminatory behavior, reporting requirements, and “the potential repercussions of getting it wrong in this area,” the firm said.
The U.K.’s 2010 Equality Act, for instance, prohibits workplace discrimination—including treatment of job applicants—based on sex, race, disability, religious belief, sexual orientation, age, pregnancy and maternity, gender reassignment, and marriage and civil partnership, according to the guide.
While a DE&I policy isn’t legally required in the U.K., not having one could have negative consequences, the guide said, noting a tribunal will want to know what measures the employer had in place if an employee claims discrimination. A company also could be at a disadvantage when bidding for work without such a policy, according to CMS.
What matters is how companies go about creating more-diverse workforces—the process and not the end result, Anderson said. An employer that says it will look aggressively for certain kinds of candidates will get into trouble in most cases, as companies need to avoid discriminating against others, she said. She noted that a company can have affirmative action type programs, “but it needs to be pretty careful.
“Compliance issues come when you mandate a certain result, a statistical result for diversity,” she said. “The right answer is to put your focus on the path to a representative and diverse workforce in terms of recruiting, retention, cultivation of talent, addressing family needs and providing opportunities.”
Employers also need to avoid running afoul of local laws and customs about which they may be unaware, according to Anderson, who said companies should work with local legal counsel. “I don’t think it’s a good idea for human resources professionals to do it yourself in terms of addressing requirements in different countries,” she said.
U.S. Diversity Concepts May Not Apply
Don Dowling, an attorney with Littler in New York City, suggested that American-style DE&I goals often make little sense overseas, particularly in racially homogenous countries. Many U.S.-based employers, however, try in vain to reach those goals in distant locations, he said.
“Speaking internationally, you have to change the definition if you’re going to have it at all,” he said, noting that companies could adapt their initiatives to account for ethnic differences within some other countries.
If you want to reflect the local demographics you have to unhook the American concepts of Black and white and look at what’s important locally, but too often companies don’t actually do that and track irrelevant, exported U.S. metrics instead, Dowling said.
U.S. headquarters often create friction when they try to roll out DE&I in places with laws, such as data privacy measures, that limit it, according to Dowling.
Global companies should slow down and adapt their DE&I initiatives to different countries, he recommended. “I’m suggesting that they localize if they’re serious about diversity,” he said. “I suggest that they look at the local demographics.”
Dinah Wisenberg Brin is a reporter and writer based in Philadelphia.