What works and what doesn’t? And, why is diversity beneficial for a smart organization?

Diversity in companies, diversity in boardrooms — there has been renewed discussion on the topic recently. Trump wants to abolish diversity policies because he believes they are unnecessary. There are also those who primarily see it as a cost burden: in the U.S. alone, $8 billion is spent annually on diversity training.

The fact is that companies and boards with diverse compositions perform better financially. A McKinsey study found that companies with the most balanced gender ratios in their executive teams are 25% more likely to achieve higher profitability than those with the least diversity. It is therefore unfortunate that Trump has threatened legal action against companies that continue to actively pursue diversity policies.

Two camps

In the U.S., two camps have emerged: companies that have immediately abandoned diversity policies and those that have decided to intensify them.

Large multinational companies such as Meta, Google, Amazon, and Accenture have decided to stop their DEI (Diversity, Equity, and Inclusion) policies immediately. Others, such as Netflix, Apple, and McKinsey, have adopted an activist stance. For example, a conservative shareholder's proposal to eliminate DEI policies at Apple was rejected by more than 97% of shareholders.

It is surprising that companies like Accenture, which are clearly pro-diversity — with a female CEO and 50% women on their board — have also stopped their diversity policies, even after publishing a study that found inclusive boards generate an average of 2.6 times more profit than less inclusive ones.

Fear plays a significant role in these decisions:

1. Some companies rely heavily on U.S. government contracts and fear losing them.
2. Others see it as too great a risk to face potential legal action for maintaining diversity programs.

Meanwhile, companies like Netflix are strengthening their diversity policies. Netflix aims to attract diverse talent that no longer feels welcome at companies that yield to Trump’s stance. This is a logical move for businesses targeting a diverse consumer base — who better understands a diverse audience than the audience itself? As the McKinsey report highlights, purpose can align with strategic self-interest:

1. Diversity initiatives have demonstrated success. Since 2015, the percentage of women in top positions has increased from 17% to 29% in 2024, proving that half of these programs have a significant impact.
2. There is a talent shortage. Companies that vocalize and demonstrate their appreciation for diverse talent attract more qualified candidates.

Diversity policies that actually work

If you, as a CFO and board, want to attract more diverse talent, it is important to know that only half of diversity policies are effective. Be selective and implement policies that are proven to work. In recognition of International Women’s Day, I specifically mention women in the following examples, but many of these strategies also help make recruitment processes fairer for other groups often affected by bias:

1. Keep Job Listings Open Longer
   Men tend to apply for jobs immediately and impulsively, whereas many women take a few days to weigh the pros and cons. Keeping job postings open longer is an effective way to encourage more female candidates to apply.
2. Include More Women on Shortlists
   - Whether women are hired depends not only on whether they apply or their skills but also on whether the recruitment process gives them a fair chance. Research shows that if only one woman is interviewed for a job, the likelihood of her being hired is very low — regardless of whether there are two or ten men in the selection process. However, when a second woman is also interviewed, the chances of hiring a woman increase by 75%. This also applies to candidates from underrepresented backgrounds.
   - Tip: If you have few or no women or diverse professionals in your network, seek assistance from a specialized recruitment agency with access to female and other diverse talent. A truly diverse shortlist ensures a fairer hiring process.
3. Use an Unbiased Interview Questionnaire
   During interviews, men are often asked content-focused questions, such as about the company’s financial strategy. Women, on the other hand, frequently receive questions about their children and personal lives, which can lead to rejection due to a perceived lack of financial knowledge. Train interviewers to ask structured, unbiased questions — or ensure that all candidates are asked the same questions. Only then can candidates be fairly compared.
4. Appoint at Least Two or Three Women to the Board
   When there is only one woman on a board, her success is often attributed to luck or seen as an exception. However, when three or more women serve on the board, their achievements are recognized as the result of equal skills.

Laurie Jansen is an economist and Managing Partner of the executive search firm Jansen & Bilgin International, which helps companies recruit top female talent.

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