As Chairman and CEO of Bob Evans Farms, Steven A. Davis (’80 BBA and ’21 Honorary Doctor in Business) established a strong diversity, equity, and inclusion (DEI) strategy, building a diverse team that consistently outperformed its peers in the family and casual dining industry during his tenure at the corporation.
Now retired from the publicly traded restaurant and packaged goods company, Davis is providing board and DEI advisory to Fortune 500 companies, while also serving on the boards of major firms including, Marathon Petroleum, American Eagle Outfitters, and PPG Industries.
Recently, he spoke to an audience of UWM faculty and staff about why DEI matters in the workplace.
Davis described how America’s DEI history began when President Abraham Lincoln signed the Emancipation Proclamation in 1862, and has since wound its way through Jim Crow laws (1865), the integration of the U.S. military (1948), Brown vs. Board of Education (954), JFK’s executive order for affirmative action (1961), the Civil Rights Act (1964), to more recent history where race and gender diversity education has grown, as well as through the impacts of the Rodney King case and the Los Angeles riots (1992) and the murder of George Floyd and the launch of the Black Lives Matter movement (2020).
“This demonstrates that there have been fits and starts over time,” he said. “But what’s different now?”
Certainly, he said, George Floyd put a name and a face on injustice. Beyond that, however, the most recent U.S. census has clearly demonstrated that the racial and ethnic composition in the U.S. is changing, and that population growth will continue to be from persons of color.
“Today, more than 50% of children born are persons of color while less than 30% of those over age 80 are persons of color,” he stated. “So think about this transition that’s coming.”
Citing his own corporate and board experience as well as McKinsey’s most recent study on diversity, “Diversity Wins,” Davis says that the most diverse companies are now more likely than ever to outperform non-diverse companies on profitability. Why? One reason is that a more diverse team brings new and diverse ideas, leading to more innovation.
In other words, the business case for diversity continues to get stronger.
So it should come as no surprise that investors are paying attention, and they are asking for metrics. In addition, the Sustainability Accounting Standards Board maintains strong ESG oversight. ISS, which rates companies on a variety of metrics, requires companies to disclose DEI metrics. And Nasdaq now requires listed companies to have two diverse directors.
It’s no longer just coming from government, Davis said. “Now it’s coming from all angles.”
Davis said that DEI has to be integrated into a company’s enterprise risk management strategy and that the strategy has to be “owned” and executed by all levels of management, from the board and the c-suite that sets the stage and develops the strategy, straight through to officers, middle management, and entry level workers who execute that strategy. “Everyone has to be involved and their levels of accountability must be well defined.”
He stressed that when making business decisions, companies need to make objective assessments using objective standards, rooting out all kinds of bias through well thought out processes and practices in all areas that affect “people decisions.”
Finally, he stated that companies should not only bring people together and listen to what they have to say. They need to use all channels to communicate their DEI strategy as well as the progress they are making on their initiatives.
“Timely, clear, consistent, and planful communication is critical because we’re really in a war for talent,” he said.