The Truth About the Current Most Dangerous Letters in the English Language: DEI

By Liz Levy, CFA, Managing Director of Investment Research 

This weekend, scrolling through my emails, I saw a headline from a Bloomberg Opinion columnist, proclaiming “Citi Just Became a Magnet for Ambitious Working Moms” (gift link here). Being an ambitious working mom myself, albeit not looking for a job at Citi, I was intrigued. (And a little bit bored, home with my nine-year-old daughter with the flu).  

The point of the article is that Citi, helmed by Jane Fraser, “the first woman to lead a major Wall Street bank,” is taking an approach to return to office policies that is very different from the rest of its peers. While other banks and tech companies, among others including the federal government, have been making headlines by ending hybrid work and requiring full-time in-office work, Citi is allowing almost all employees to work remotely at least two days a week.  

The article notes that Fraser has called this flexibility a “competitive advantage.” It states that “while Citi has not said that attracting and retaining women is the goal, it’s very likely the company will end up keeping working mothers who need and want the flexibility the most.” The article separately notes that many of the companies doing away with flexibility have formal commitments to increasing the proportion of female executives, or to diversity, equity, and inclusion (DEI). Or at least they do for now, as every day seems to bring a new report of companies caving in to either right-wing activists’ demands or federal government contractor requirements to end discriminatory DEI activities, whatever that means.  

I don’t disagree, at all, with this article. And in this era, when the letters DEI seem to be striking fear into the hearts of all types of organizations wary of seeming to cross the new regime, I guess I can understand why the author didn’t make the obvious connection — DEI is good for business!  

Lots of research has shown the importance of having a diversity of perspectives in making better decisions, as one corporate general counsel recently reminded me. 

Making your bank a “magnet” for any type of employee implies a stronger pool of candidates for any given job, and thus increases the likelihood of a stronger employee joining a team. DEI is one aspect of human capital management, and anything a company can do to make itself a more attractive employer will help it attract and retain the strongest human capital. That helps increase the odds of achieving better outcomes — for employees that benefit from an attractive and inclusive workplace, and also for shareholders that benefit from better decision-making.  

That’s right — DEI is a strength, not a weakness. Embracing “masculine energy”, as one tech CEO notably (and ridiculously) expressed his desire to do, is not a panacea for returning to an imaginary era of American glory. 

Embracing and taking advantage of diversity, ensuring equity, and creating an inclusive culture are much more likely to lead to success. 

Even if companies and organizations need to think of new, neutral ways to describe what they are doing to evade federal censors, forward-thinking ones will continue to do the work — because it’s good business.