by Karin Portlock and Jabari Julien

Recent years have seen an uptick in corporate internal investigations of discrimination and harassment on the basis of protected characteristics and increased attention to corporate diversity, equity, and inclusion policies and practices.  When companies look for teams to investigate these issues, they should prioritize diverse teams, which perform better than homogeneous ones in core investigative functions and drive better and more thorough results for clients.

As Diversity in Companies Has Grown, So Too Has the Need for Diverse Investigative Teams

Diversity at all levels of the corporate workforce continues to grow.  Boards of directors and corporate officers are diversifying in regards to gender, social class, nationality, and race and ethnicity,[i] and the percentage of directors who are racial minorities is at a record high.[ii]  Data from the Bureau of Labor Statistics shows that the percentage of Black and Latinx workers in management positions has doubled since 1995,[iii] and both these two groups are growing in the finance and technology sectors specifically.[iv]  At the same time, many major companies are outpacing national statistics by setting internal benchmarks to diversify their ranks.[v] In recent years, numerous companies have launched initiatives to further accelerate the diversification of their staff.[vi]  And this trend looks set to continue.  Last fall, the SEC approved Nasdaq’s proposed rule changes on requiring issuers to disclose information about the diversity of the company’s board.[vii]  Under the new rules, certain Nasdaq-listed companies are required to annually disclose statistical information about the board’s diversity characteristics and include (or provide an explanation for not including) a certain number of diverse directors.[viii]

As companies work to improve diversity within their ranks, they are increasingly faced with difficult and sensitive questions about workplace conduct.  This trend is evident across industries as a broad range of companies and institutions have faced recent scrutiny over workplace culture and inclusion policies and practices, as well as allegations of serious misconduct at the executive level.  In this environment, clients seeking counsel should recognize that diverse investigative teams are best equipped to conduct thorough, accurate, and culturally sensitive investigations.

Diverse Teams Can Conduct More Thorough Interviews

These types of serious allegations require thorough and comprehensive review.  And when the time for such an investigation comes, clients should give careful consideration to the composition of the investigative team, cognizant of the unique benefits that diversity confers. 

As just one example, research suggests that informational interviews in the physician-patient context are more successful (and therefore lead to improved health outcomes) when there is a positive relationship between physician and patient.[ix]  One critical element to a positive physician-patient relationship is trust, and research has further shown that patients who share cultural beliefs, values, experiences, or languages with their doctors “trust their doctors more, are treated with greater respect, and communicate more effectively with their doctors.”[x]  On the other hand, discordant physician-patient relationships (in terms of race, ethnicity, or language) have higher rates of miscommunication and other negative effects.[xi] 

In a similar vein, a 2016 report jointly published by the Department of Justice and the Equal Employment Opportunity Commission[xii] noted the benefits of diversity in relationships between law enforcement officers and community members.  The report found that diversity in law enforcement—defined broadly as diversity of race, gender, LGBTQ+, religion, and language—can help “build trust with communities.”[xiii]  According to the report, “[t]his trust is essential to defusing tension, to solving crimes, and to creating a system in which residents view law enforcement as fair and just,” which in turn encourages victims or witnesses of crime to approach and engage with law enforcement.[xiv]

As in these contexts, building a rapport with an interviewee in order to elicit sensitive and important information is critical to a successful internal investigation.  Accordingly,  diverse teams whose members come from a wide range of cultural, ethnic, and other backgrounds are better equipped to elicit trust and communicate with diverse employees in all corners of a company, driving more thorough interviews and therefore, better results.

Diverse Teams Offer Significant Benefits in Problem Solving and Decision Making

Another core task of an investigative team is to solve complex problems and arrive at thorough, well-reasoned conclusions.  At a high level, strong “homogenous” cultures can “stifle the natural cognitive diversity in groups through the pressure to conform,” while diverse teams tend to benefit from “accelerated learning and performance in the face of new, uncertain, and complex situations.”[xv]  

More granularly, diverse teams, by their very nature, incorporate a wide variety of perspectives.  Those perspectives generate different interpretations of the facts, lead to more collective problem-solving, and ultimately cause the team to arrive at the most accurate conclusions.  Specifically, research shows that increased diversity is linked to improved group decision-making within juries.  A 2006 study by researcher Samuel R. Sommers revealed that diverse jury panels in a simulated trial “deliberated longer and considered a wider range of information than did homogenous groups.”[xvi]  Diverse juries “deliberated longer and considered a wider range of information,” and the mere presence of a diverse juror prompted the jury to consider facts more carefully and make fewer factual errors.[xvii]  Diverse juries were also more prone to discussing race-related issues in their deliberations.[xviii] 

The inherent cognitive benefits of diversity expand beyond jury deliberations.  Researchers have explained how “[p]eople who are different from one another . . . bring unique information and experiences to bear on the task at hand” and that influx of information can lead to innovation.[xix] Moreover, diverse teams implicitly encourage hard work and creativity to flourish “by encouraging the consideration of alternatives even before an interpersonal interaction takes place.”[xx]  The introduction of new and different perspectives to a group generates a certain level of cognitive strain that can ultimately lead to the realization of different ideas and ways of understanding information.  Essentially, researchers maintain that the purported “unfamiliarity” that comes with diversity is transformed into “an important catalyst for creativity and deep thinking.”[xxi]  Put simply, when called upon to analyze the facts, each team member brings a perspective that allows them to evaluate another team member’s line of reasoning in their own unique way, ultimately helping the group arrive at a more thorough, well-reasoned, and verifiable outcome.

Key Takeaways

The benefits of a diverse team are abundant.  In the context of internal investigations, diverse teams are best-positioned to collect more detailed and reliable answers from witnesses and are more likely to reach a correct and verifiable outcome.  Diverse teams are also better equipped to tackle issues that arise during the course of an investigation effectively and creatively.  Whether it is interviewing a senior official sharing the experience of being tokenized and understanding how that experience might inform boardroom communication and decision-making dynamics, or examining sensitive allegations of workplace misconduct and race-based discrimination to identify creative, thoughtful, structural client solutions, examples of how diverse perspectives strengthen the investigative process abound.[xxii]  For optimal results, clients should choose diverse investigative teams to handle their most sensitive inquiries.

Footnotes

[i] Alison Cook & Christy Glass, Do Minority Leaders Affect Corporate Practice? Analyzing the Effect of Leadership Composition on Governance and Product Development, 13 Strategic Organization 117 (2015), https://www.jstor.org/stable/10.2307/26478206.

[ii] U.S. Board Diversity Trends in 2019, Harvard Law School Forum on Corporate Governance (Jun. 18, 2019) https://corpgov.law.harvard.edu/2019/06/18/u-s-board-diversity-trends-in-2019/

[iii] In 1995, Black and Latinx workers made up 11.9% of managerial and professional occupation positions.  Tables from Employment and Earnings, U.S. Bureau of Labor Statistics (1995), http://bls.gov/cps/aa1995/aat11.txt.  By 2020, this number increased to 20.1%.  Labor Force Statistics from the Current Population Survey, U.S. Bureau of Labor Statistics (2020), http://bls.gov/cps/cpsaat18.htm [hereinafter “2020 Bureau of Labor Statistics”].  The Bureau of Labor Statistics categorizes those who self-identify as “Hispanic, Latino, or Spanish” as “Hispanic.”  “Hispanic” is not a racial group according to the Bureau and may include people of any race.  Concepts and Definitions, U.S. Bureau of Labor Statistics, https://www.bls.gov/cps/definitions.htm#hispanic.      

[iv] In 2010, 16.9% of workers in business and financial operations were Black or Latinx.  Tables from Employment and Earnings, U.S. Bureau of Labor Statistics (2010), bls.gov/cps/aa2010/cpsaat11.pdf.  By 2020, the number increased to 18.5%.  2020 Bureau of Labor Statistics.  Positions in the computer and information category increased from 8.9% Black and Latinx in 2005 to 12.2% in 2020.  Tables from Employment and Earnings, U.S. Bureau of Labor Statistics (2005), bls.gov/cps/aa2005/cpsaat11.pdf.  

[v] See, e.g., Jon Porter, Facebook’s Latest Diversity Report Shows Its Inching Toward Its Goals, The Verge (Jul. 15, 2020), https://www.theverge.com/2020/7/15/21325410/facebook-diversity-report-2020-black-hispanic-women-people-of-color-technical-roles (“Between 2014 and 2020, the amount of Black people it employs in non-technical roles in the US went up from 2 to almost 9 percent, for US Hispanic people it went up from 6 to 11 percent, and the amount of women in its leadership positions went up from 23 to 34.2 percent.”).

[vi] See Amanda Schiavo, Noodes & Co joins PwC, McDonalds and Verizon on Corporate Diversity Pledge, EBN (Mar. 18, 2021), https://www.benefitnews.com/news/noodles-co-joins-pwc-mcdonalds-and-verizon-on-corporate-diversity-pledge; Glenn E. Newman Jr., 5 Reasons I’m Hopeful About Diversity, Equity and Inclusion in Corporate America, Fast Company (Apr. 19, 2021), https://www.fastcompany.com/90625813/5-reasons-im-hopeful-about-diversity-equity-and-inclusion-in-corporate-america; Jennifer Surane, AmEx Pledges $1 Billion in Push to Promote Racial, Gender Equity, Bloomberg (Oct. 29, 2020), https://www.bloomberg.com/news/articles/2020-10-29/amex-pledges-1-billion-in-push-to-promote-racial-gender-equity; Fiona Rutherford & Riley Griffin, Pfizer to Place 100 Young Minorities in New Fellowship Program, Bloomberg (Apr. 21, 2021), https://www.bloomberg.com/news/articles/2021-04-21/pfizer-to-place-100-young-minorities-in-new-fellowship-program.

[vii] SEC Approves New Nasdaq Board Diversity Rules, Gibson Dunn (Aug. 12, 2021), https://www.gibsondunn.com/sec-approves-new-nasdaq-board-diversity-rules/.

[viii] Id.

[ix] Susan Door Goold & Mack Lipkin, Jr., The Doctor—Patient Relationship: Challengers, Opportunities, and Strategies, J. Gen. Internal Med. S26 (1999).

[x] Janet W. Schofield et al., Culture and Race in Provider-Client Relationships (Univ. of Pittsburgh Sch. of Law Working Paper Series, Paper No. 21, 2005).

[xi] See also Chinenye Nwabueze & Nancy Ncheta Nwankwo, Ethnicity and Doctor-Patient Communication: An Exploratory Study of University of Abuja Teaching Hospital, Nigeria, Society for Participatory Medicine (Oct. 7, 2016), https://participatorymedicine.org/journal/evidence/research/2016/10/07/ethnicity-and-doctor-patient-communication-an-exploratory-study-of-university-of-abuja-teaching-hospital-nigeria/.

[xii] U.S. Dep’t of Justice & U.S. Equal Emp. Opportunity Comm’n, Advancing Diversity in Law Enforcement, EEOC, https://www.eeoc.gov/advancing-diversity-law-enforcement (last visited Feb. 11, 2021).

[xiii] Id.

[xiv] Id.

[xv] Alison Reynolds & David Lewis, Teams Solve Problems Faster When They’re More Cognitively Diverse, Harv. Bus. Rev. (Mar. 30, 2017), https://hbr.org/2017/03/teams-solve-problems-faster-when-theyre-more-cognitively-diverse.

[xvi] Samuel R. Sommers, On Racial Diversity and Group Decision Making: Identifying Multiple Effects of Racial Composition on Jury Deliberations, 90 J. Personality & Soc. Psychology 597, 606 (2006).

[xvii] Id.

[xviii] Id.

[xix] Katherine W. Phillips, How Diversity Makes Us Smarter, Scientific American (Oct. 1, 2014), https://www.scientificamerican.com/article/how-diversity-makes-us-smarter/.

[xx] Id.

[xxi] David Rock, Heidi Grant, & Jacqui Grey, Diverse Teams Feel Less Comfortable—and That’s Why They Perform Better, Harv. Bus. Rev. (Sept. 22, 2016), https://hbr.org/2016/09/diverse-teams-feel-less-comfortable-and-thats-why-they-perform-better (“If, however, leaders can recognize that the debate and unfamiliarity that come with diversity is an important catalyst for creativity and deep thinking, they will invite it and celebrate it. And very likely, the organization—and everyone in it—will reap the rewards.”).

[xxii] Marilyn Batonga, Diverse Teams Can Help Solve Challenges in Corporate Investigations, NACD Board Talk (Dec. 1, 2020), https://blog.nacdonline.org/posts/diverse-teams-corporate-investigations.

Karin Portlock is of counsel and Jabari Julien is an associate at Gibson, Dunn & Crutcher LLP. The authors would like to thank Nicholas Pulakos, a recent law graduate in the firm’s New York office, for his contributions in the preparation of this article.

The views, opinions and positions expressed within all posts are those of the authors alone and do not represent those of the Program on Corporate Compliance and Enforcement or of New York University School of Law.  The accuracy, completeness and validity of any statements made within this article are not guaranteed.  We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the authors and any liability with regards to infringement of intellectual property rights remains with them.