The Carlyle Group, the global investment firm with over $300 billion in assets under management, is launching a diversity, equity, and inclusion (DEI) council for CEOs at the 270 companies in its private equity portfolio.
The initiative is spearheaded by Carlyle CEO Kewsong Lee and chief diversity, equity and inclusion officer Kara Helander, with the inaugural meeting taking place on Thursday.
“We believe DEI plays a critical role in propelling performance,” Lee said in a statement shared with Fortune. “We look forward to collaborating with the DEI Leadership Network to ensure management teams are equipped to lead and inspire as they drive focused progress across their organizations.”
Members of the DEI Leadership Network will have access to quarterly speakers, dedicated communication channels, and access to training and information resources. At the first annual meeting, portfolio CEOs will learn how to set the foundation for DEI, and share their pain points and areas of progress.
“Achieving true diversity begins with collaboration,” Beautycounter CEO Marc Rey tells Fortune. “The network is a great example of businesses coming together to share successes and challenges, working together to be part the solution and to make measurable progress.”
CEO involvement signals that DEI is a priority at participating companies and that leaders are committed to embedding inclusion into all aspects of their management and employee lifecycle, not just leaving it in the hands of an HR or diversity leader, Helander tells Fortune.
“I think the role of the CEO in driving change has only increased over the last couple of years,” she says. “This is an opportunity to both provide our CEOs with insight and guidance, but also the opportunity to interact with one another and share insights.”
An internal study found that Carlyle portfolio companies with diverse boards performed 12% better on average than those that did not have diverse boards. But many CEOs struggle to develop an overarching DEI strategy for their company, measure DEI progress, and obtain organizational buy-in.
“We are a high-performing and results-oriented company, and DEI is a key reason why,” says Wayne Roberts, CEO of Abrigo, a financial services software company participating in the initiative.
Roberts and Rey are joined by a number of their peers from around the globe, including Compana, a pet-services provider from St. Louis, Missouri; Dept, an Amsterdam-based design agency; Design Holdings, an interior design firm; and Grand Foods, a restaurant chain manager in China and Hong Kong.
“We are in the judgment business,” Helander says. “To make great investments, we’ve got to have diverse perspectives around the table so we can really see opportunities and then seize them. That bears out in our own portfolio.”
Helander joined Carlyle Group in 2018 to advance its internal DEI strategy. “The firm reached a point where they wanted to take their efforts further and wanted to bring some expertise to help drive that,” she says. The company created companywide DEI goals tailored for each business function, and instituted training around topics such as unconscious bias and inclusive leadership.
The DEI council is an extension of Carlyle’s D&I mandates for portfolio companies. In 2020, it tasked portfolio companies with reaching 30% board diversity by 2022. The firm announced last February a $4.1 billion credit line for its portfolio companies that will tie the price of debt to the diversity of a company’s board, and in May, it became the latest company to infuse diversity metrics into executive compensation and employee bonuses. Still, only 4% of the PE firm’s 172 U.S. employees in senior roles identify as Hispanic and just 3% are Black.
As the labor market grows increasingly competitive, successful DEI strategies can pay dividends on talent strategies, Helander says. “It starts with making sure you’re clear about how diversity adds to your business. And you embed that in the external communications because that’s been shown to increase applications from underrepresented professionals.”
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