Why defunding tech companies without a DEI Policy does not work (and what does)

In June, I participated in a roundtable discussion at the TNW Conference, organized by the Dutch DEI coalition. The purpose was to discuss how to translate the existing data on DEI into concrete actions.

One proposed step was to have tech investors only invest in companies with a D&I policy. This step should serve as an incentive for companies to start promoting diversity.

And I don’t think that’s the right step for three reasons.

A policy is just paper unless you act on it.

For starters, it leads to the same result I’ve seen in Compliance in the early years: It’s just there on paper. Having a policy is meaningless, as most companies with a D&I policy don’t actually do something meaningful with it. They outsource D&I to some overworked and underpaid person without an influence on how the business is run to keep the outside world quiet. But they get the funding anyway because they can tick the box.

Just requiring a policy works the wrong way

Also, the incentive works in the opposite way as intended. Research into investments in ESG indices has shown that defunding Oil & Gas companies has not led to better behavior in terms of responding to climate change. On the contrary, these companies put off making the necessary investments in better equipment and practices and move harmful operations to countries with less rigorous emission rules to avoid the problem. So, effectively it would have the effect of defunding all Diversity, Equity and Inclusion efforts. And that is not really what we want or need.

A DEI Policy can’t cure the catch-22 that we’re in

Thirdly, implementing real D&I is about breaking the current catch-22 situation. As long as we teach girls and young women that tech is unsafe, convincing them to work there will be challenging. And since you can’t be what you can’t see, if we don’t promote the women who are working in tech, we do not set the example that we need.

What should we do instead?

And that brings us to one effective action every company can take. We know from data that women tend to follow their peers. As a result, promoting and celebrating the existing diversity in the workforce is a great way to bring about positive change.

Role model campaigns like that of Equals, who literally put the faces of the women already working in tech on every bus and tram stop in Amsterdam and The Hague to celebrate International Women’s Day, are a great example of how positive attention to the topic can make a splash.

Should we abolish DEI policies?

Of course, there are many more things we can do to promote diversity in tech. And having a policy can guide us in the right direction. That is, if we also can show real-life examples of how it can be implemented.