Diversity departments at most large companies have become a fixture over the last decade. The idea – at least on paper – is to institute corporate programs that give women and minority men a chance to move up at the same rate as the white men who still dominate the managerial and executive ranks. Diversity management - at least on paper - is done two ways: 1) teaching managers to look past gender and color and evaluate candidates on merit, and 2) creating affinity groups in which female and/or minority employees can discuss barriers and help each other overcome them.
Trouble is, the fancy words on paper don’t match the reality. Diversity shops may run a seminar once in awhile, or create lunchtime gabfests for people to air their troubles. But all too often their primary purpose is to get the company on as many “best” lists as possible. The Vice President for Diversity is valued more for the image she or he is able to build for the company than any actual results that mean better pay and promotion for the groups in question. Some diversity managers spend the majority of their time filling out self-serving “questionnaires” from the awarding organizations. Then they spread advertising dollars and “award event” underwriting money around liberally to reinforce their applications. A neat deal – the company gets the kudos, the awarding publication or group gets the bucks, and nobody’s the wiser.
This arrangement is sort of like the one between a prostitute and a john - both know the rules, both get what they bargain for, and nobody gets hurt in the process.Or do they? There’s a far more sinister side to this shameless arrangement. If a company gets an award as “best” for, say, working women, it looks like a good reason for women to change jobs or choose that firm over the next one. Once on board, they may then find it’s so much window dressing - that the company, in fact, actually discriminates. “Recruiting centers heavily on the company’s self-promotion and presentation of all their awards. The reality is that highly subjective promotion, appraisal, and work allocation systems are biased against women,” said one woman in the financial sector who later sued when younger men with less experience were promoted over her.
Even more sinister, some companies try to use awards as a silver bullet to escape legal penalties or ward off lawsuits. When women at Morgan Stanley, a company on “Working Mother” magazine’s “Best Companies for Working Mothers” list won a $54 million dollar settlement for sex discrimination, the company cited the list as evidence it didn’t discriminate. Deloitte & Touche actually tried to get the judge to dismiss a sex discrimination case – without hearing any evidence – merely because they garnered the same award.
Not all companies view diversity so cynically, and not all on “best” lists are bad companies. But too many of them are. So the next time you see one of those good guy awards, remember this: Corporate fraud is not always financial.
Martha Burk is the author of “Cult of Power: Sex Discrimination in Corporate America and What Can Be Done About It,” just out from Scribner.