Internal Audit’s Role in Diversity & Inclusion
Events in recent weeks have told a tragic but now familiar story. Once more, a light is shining on important issues ranging from police brutality and systemic racism to workplace diversity and responsible posting on social media. I certainly don’t purport to have the answers to the myriad of questions being asked. However, I do know there are questions we can be asking as internal auditors to help build a more just, diverse, and inclusive society — one organization at a time.
Diversity in Governance
- How diverse is your governing body?
- Does it include women and people of color?
- How about people of different ages and professional backgrounds?
The true value of diversity is the different perspectives and life experiences that people different from you can bring to the table. Diversity should include people of a different age, race, gender, ethnicity, and professional background, amongst other characteristics. For many boards, even most, this will not be an overnight transition. Diversity will increase by adding additional board members or filling an open position with a diverse board member. However, a word of caution: you should always ensure you are selecting the right person to join your board. There are plenty of diverse candidates out there who would be a great fit for your board and organization, you just have to seek them out.
- Does your organization have a documented plan for diversity?
- Does the plan include SMART goals?
- Does the plan list metrics to measure progress toward their diversity goals?
- Does your organization monitor progress toward diversity goals?
Equal Employment Opportunity (EEO) laws generally promote a basic level of diversity across an organization. However, organizations miss an important opportunity if they view diversity as an exercise in obeying the law rather than an opportunity for success, and a competitive advantage. Much like board-level diversity, veritable diversity across an organization allows for a variety of perspectives from people with differing life experiences. These different perspectives allow for richer conversations on strategic objectives and the paths to achieve them. Increasingly, those entering the workforce are placing an emphasis on diversity in the workplace. Organizations who embrace this are more likely to become an employer of choice and hire top talent to lead their organizations to success.
- Does your organization include a way for stakeholders to anonymously report concerns and wrongdoing?
- Are these reports monitored, and thorough investigations conducted?
- Is appropriate action taken on all substantiated allegations?
- Is the governing body appropriately informed of the most serious allegations?
- Are reports monitored to create trending data to indicate troubled areas within the organization?
An effective reporting hotline is a critical feature for a successful corporate culture. A reporting hotline should be available to all stakeholders, including employees, customers, and suppliers. The hotline must also provide a way for users to remain anonymous. If the only way to report is on your organization’s intranet page — where users know an IP address could point to the computer used and employee logged on — they will be far less likely to report suspected wrong-doing. Effective oversight is also important to ensuring a successful and effective reporting hotline. If stakeholders make reports and continue to see no action taken, they will eventually stop reporting altogether. Every allegation cannot or will not be substantiated, but stakeholders need to know that each report is taken seriously and appropriately investigated.
- Do employees feel physically safe from harm in their workspace?
- Do employees enjoy a workplace free from harassment or discrimination?
All employees have a right to feel physically safe from harm in their workplace. This includes day-to-day risks, as well as those risks posed by the COVID-19 pandemic and violence erupting in some locations. In the wake of recent tragedies, many people have taken to the streets to exercise their right to peaceably assemble. Unfortunately, some individuals have taken this opportunity to turn these otherwise peaceful assemblies into violence. While employees continue to work from home in light of the COVID-19 pandemic, some organizations have begun the process of re-opening physical locations and bringing employees back. Organizations should take care to ensure their employees are safe from any physical harm they could reasonably anticipate. Additionally, all employees should enjoy a workplace free from harassment and discrimination. The organization should have strong policies in support of workforce diversity and anonymous reporting, as they can be great tools in ensuring a positive work environment for all.
Social Media Posting
- Does your organization have a social media policy?
- Are all social media posts by the company properly reviewed for compliance, relevance, and appropriateness prior to posting?
- Are personal posts made by employees taken into account when considering the organization’s culture?
We now live in a world where someone thousands of miles away can know what is happening in our area instantly, and millions can know how we feel about any given situation. This poses unique risks for an organization. One poorly thought-out social media post from an organization can carry enormous reputation risk and could ultimately cost an organization lost revenue. Most organizations have developed processes to ensure regulatory compliance. However, many organizations lack a formal process for review of appropriateness and sensitivity. A diverse group of reviewers will help ensure you catch items that could be insensitive or inappropriate to public audiences, saving the organization a great deal of embarrassment and potentially lost revenue. Employees also post on their own social media accounts. It is important for every organization to have policies in place, best suited to their culture, industry, and regulatory environment. If you begin seeing negative posts from stakeholders — and particularly employees — take this into account when evaluating your corporate culture. Many negative posts could be just a disgruntled employee expressing frustration. This may also present an opportunity to spot trends or identify issues that need addressed within your organization.
Of course, this is not an exhaustive list of important areas internal audit can evaluate. This is meant to be a starting point for discussion of ways you can help your organization be a diverse and inclusive workplace. Ultimately, internal auditors can only make recommendations, but these recommendations can lead to change and make a real difference in the lives of real people inside — and outside — our organizations.
Note: The views expressed in this article are solely those of the author, and do not necessarily represent the view of any organization with which the author is affiliated.