Diversity, equity and inclusion is an invaluable risk management strategy.

Author: Larry Phillips


Diversity, equity and inclusion (DEI) initiatives have been gaining momentum in recent years, fueled by movements like #MeToo and Black Lives Matter. These social movements are opportunities for organizations to recommit to breaking old patterns and building more inclusive communities — nevermore to be complicit in the face of injustice.

As nonprofits examined their own diversity and inclusion programs, they found that DEI isn't just a people strategy — it is also an invaluable risk management strategy. With increased scrutiny from third parties (e.g., governing bodies, consumer groups, activist shareholders, etc.), DEI has become an important loss prevention tool and a way for organizations to reduce their total cost of risk.

Over the past year, derivative demand letters, lawsuits, and books and record demands have been brought against organizations alleging a lack of board diversity, sparking a rise in directors and officers (D&O) claims. Employment practices liability claims are also relevant to the DEI conversation, as claims alleging discrimination can be made under federal Title VII laws or relevant state laws. Overall, these claims pose a growing financial risk — a risk that can be mitigated through the right DEI strategy. To learn more about how DEI can minimize your total cost of risk, check out the resources below.

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