As an Article 8 Fund Manager, 2023 was filled with conversation and hard work to implement our ESG Framework. On our last ESG Training Day, we shared with our portfolio a new resource: a Wellstreet guide to writing a DEI policy. We invite you to read it and adapt it to your circumstances as well. You'll also find a PDF version here.
How to write a good and relevant DEI policy
Having a DEI (Diversity, Equity, and Inclusion) policy is today an imperative for any relevant startup aspiring to grow and attract investors and skilled staff. In this short guide, we share some starting points and hope to inspire you as you embark on your journey towards building sustainable companies. As always, adapt any advice to fit your company and ask for help from your investors and others in your network.
Why is DEI important?
Just in case you don’t yet fully “get it” when it comes to DEI, let us clarify.
- DEI has a strong moral imperative and also supports SDG (United Nations Sustainable Development Goals)1 – SDG5 Gender Equality and SDG10 Reduced Inequalities
- DEI is good business, as diverse businesses perform better. We have seen it ourselves, and reputable institutions have measured the effect (Goldman Sachs2, McKinsey3)
- Employees expect it. You will have difficulties attracting and retaining the key competencies you need without proper attention to DEI.
So, what is DEI about?
Diversity is how we as human beings differ from one another. There are many possible categories to define these differences. Some can be measured, and some cannot, but all dimensions are important to create good diversity. Atomico uses the categories4 demographic (age, race, gender identity, sexual orientation), experiential (economic or social position, occupation, faith, abilities, dependents, caring responsibilities) and cognitive.
Most countries have laws regulating gender equality and discrimination, as in Sweden with legal protection against seven grounds of discrimination5.
We all have unconscious bias, which makes it challenging for us to both be aware of and appreciate how we as human beings approach things differently. It requires a conscious effort to overcome these, and you do it by educating yourself.
Inclusion comes on top of diversity. In short, inclusion is a culture and a set of practices that allows everyone in the organisation to bring their whole self to work and can feel that they belong. Inclusion also involves people’s well-being at work as well as safeguarding people’s mental and physical resources.
In practice, it means that you as an organisation actively appreciate the differences, we all have as human beings and that we are curious about what makes us all unique.
Equity refers to fair treatment for all people, so that the norms, practices, and policies in place ensure identity is not predictive of opportunities or workplace outcomes. Equity differs from equality in a subtle but important way.
Diversity, Equity & Inclusion is a key component of a company’s culture. It needs to be embedded right from the start of a company journey. The longer you wait, the harder it will be to shape the culture and the practices in the organisation.
How to write a DEI policy
So, now that we have covered the imperative of working with DEI, how do you go about writing a good DEI policy? Here are some steps to get you started:
1) Commit yourself as leaders/founders and make it part of your company strategy and values. Addressing DEI should never be seen as a statistical box-ticking exercise for your company to look good. It requires a committed mindset and leadership from the top – walking the walk. Attending trainings and making your expectations public clear to your team and stakeholders is a good first step.
2) Understand who your stakeholders are and get them onboard. Who are your stakeholders? They are likely to be investors, Board members, employees and key customers. Understand what they expect from you in terms of diversity. Some of them may even have expressed very clear expectations.
3) Formulate your company DEI commitment. Every company should express such a commitment. Google6, for example, states a commitment to “embedding belonging in all we do— In our workplace, in our products and in society.” Notice how Google addresses DEI in both internal and external senses.
4) Write the policy. A good DEI policy should include the following:
- Express your statement – a clear ambition on what you want to achieve and why.
- Reinforce any applicable local legislation. For companies with operations in Sweden, you need to include relevant sections from the Discrimination Act7 and specifically mention the seven protected grounds of discrimination (sex, transgender identity or expression, ethnicity, religion or other belief, disability, sexual orientation, and age).
- You can append any other grounds of discrimination that you deem relevant for your geography and workforce, e.g., marital status, parental status, veteran status, etc.
- Describe the desired culture in your company and be explicit with desired and undesired behaviours. Examples might include:
- Everyone being treated fairly and similarly?
- Everyone given the opportunity to speak up and contribute?
- Everyone is embraced and accepted for their differences?
- Option: Set targets. You might want to formulate and include measurable targets on DEI in your policy. Such targets could include gender composition across your company (Board, C-suite, managers, tech staff) and other diversity measures. Inclusion KPIs could be tracked in regular employee surveys.
- Define your policy scope. To whom does your company’s DEI policy apply? Best practice is to include all stakeholders, ranging from full- and part-time employees to contractors, vendors, suppliers, and job applicants.
- Express stakeholder responsibilities. Describe, using clear examples, your stakeholders’ responsibilities to uphold the DEI policy, including senior managers and hiring managers. Examples include:
- Treat others with dignity and respect.
- Understand one’s individual role in modelling desired behaviours.
- Behave inclusively at all work functions, in and outside of work.
- Complete diversity training to enhance knowledge.
- Describe procedures for complaints/whistleblowing and likely outcomes. Explain what the company will do if someone has directly witnessed or suspects behaviour that conflicts with the DEI policy. As an extra option, explain the investigation process that commences once a report is made, including the steps and who’s involved at each stage. You can also include possible outcomes for staff members who breach the policy. We recommend that you establish a single point person in your organisation to accept reports of violations and route them to the appropriate parties for investigation, with a second person as a backup if the first person does not feel like an option for the reporting party. Also, offer an anonymous reporting mechanism for employees who don’t feel comfortable speaking about these matters in a face-to-face conversation.
- Procedures for adoption and revision. Express when and how the policy will be both adopted and then kept up to date, e.g., by yearly revisions adopted by the board.
5) Review your HR policies. Your DEI policy should be a key part of your employee handbook. It should have a standalone chapter so that employees understand the priority that your company places on DEI. You then need to work your way through all HR processes to make sure that you promote your DEI commitment, e.g.,
- Formulating job descriptions using inclusive language and including your DEI statement.
- Referral bonus scheme for underrepresented employees
- Flexible working arrangements
- Parental leave, compassionate leave, holiday leave, working from home arrangements, etc.
- Internal events celebrating different cultures and traditions, including holidays observed.
Where should your DE&I Policy be reflected?
Your Employee Handbook / Values Statement Document / DEI-policy should all be tied together as a powerful trifecta, as an ecosystem rather than standalone products - possibly making it into a more strategic exercise and a foundation for the entire employee experience and your social sustainability agenda.
6) Train staff. Staff training on DEI must be mandatory. Hold, as a minimum, yearly trainings on DEI and make it a key step in onboarding new staff.
7) Follow up. You need to regularly follow up on your DEI efforts. This includes revising your policy as stakeholder expectations develop and you become more knowledgeable about the effectiveness of your own internal efforts. Understand that you will never fully “arrive” on your DEI work.
8) OPTIONAL: Publish the policy. Your DEI policy needs a home, preferably externally available on your website, to inform outside partners of your DEI standards and expectations. Some companies publish their DEI statement under their About Us page, while others devote an entire page to their DEI efforts. Being explicit about your efforts and devoting an entire page is usually the most effective.
9) OPTIONAL: request that staff sign the policy, or your staff handbook, if the policy becomes included in the handbook. Typically people read through a document if they are asked to sign it, so you will ensure all staff members are aware of it.
Still unsure on what the practical next steps could be? While we certainly could provide a list of policies for you to copy, we wouldn’t be helping you in doing so. You as a founder need to spend the time necessary to walk through the steps above. DEI is a key part of building a new company, and you need to get it right from the very beginning of your company journey. Trying to “fix” DEI later on in your growth journey could prove to be futile, and it would harm your prospects in attracting the investors and tales you need.
Having said that, here are a few steps you can take to kick-start your inspiration:
- Spend some time browsing the web on large companies in your industry section. See what focus areas they have, as you will be competing for the same talent. Use keywords like “mångfaldspolicy” och “jämställdshetspolicy” in browsing in Sweden.
- Understand the bare legal minimum in Sweden – the Discrimination Act7
- Further resources:
- Balderton – A start-up guide to ESG - https://www.balderton.com/playbooks/startup-guide-to-esg/diversity-and-inclusion/#content
- Atomico – A Practical Guidebook for Entrepreneurs - https://www.inclusionintech.com/
- Insperity – What any diversity and inclusion policy should contain - https://www.insperity.com/blog/what-any-diversity-and-inclusion-policy-should-contain/
Getting your head around DEI is not only a nice thing to do – it is about having a licence to operate in the future. Without ambitious efforts in DEI, you run the risk of becoming irrelevant in the eyes of investors, customers, and prospective employees. Embed DEI as part of your DNA right from the start of your company journey, as you will be off to a great start.
- United Nations - https://sdgs.un.org/goals
- Goldman Sachs – Launch With GS - https://www.goldmansachs.com/our-commitments/diversity-and-inclusion/launch-with-gs/?cid=eml-pd-fortune-lwgs20fy-textlink-20208-v2-2---sept?cid=eml-pd-fortune-lwgs20fy-textlink-20208-v2-2---sept
- McKinsey – Diversity wins: How inclusion matters - https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters#/
- Atomico – A Practical Guidebook for Entrepreneurs - https://www.inclusionintech.com/
- See more resources at Diskrimineringsombudsmannen - https://www.do.se/choose-language/english/what-is-discrimination
- Google Diversity Annual Report - https://static.googleusercontent.com/media/about.google/sv//belonging/diversity-annual-report/2023/static/pdfs/google_2023_diversity_annual_report.pdf?cachebust=2943cac
- Swedish Discrimination Act - https://www.do.se/choose-language/english/discrimination-act-2008567