Hello from Zurich. I spent the last week in Switzerland’s financial capital and the week prior in London, meeting with executives from some of Europe’s largest companies. Among those executives were DEI leaders who oversee sprawling, global people operation teams with outposts in the U.S.
As American companies rush to alter diversity policies amid legal challenges to DEI efforts, Europe-based companies seem unperturbed by the opposition from lawmakers and high-profile leaders across the Atlantic, with many telling me that while they might have tweaked some language to be more inclusive, they still view diversity programs as an integral part of their core business strategy, especially in the U.S.
They also stressed that their companies haven’t made significant withdrawals from DEI initiatives, nor do they feel particularly apprehensive about anti-DEI litigation. What’s more, they seemed more willing to adapt and gravitate to geographies where there’s less resistance to their work. After all, as one executive deadpanned to me, the U.S. isn’t the only country with racial diversity. Valid.
Fittingly, today’s raceAhead comes from Fortune’s Emma Burleigh, who spoke with George-Axelle Broussillon Matschinga, vice president of diversity and inclusion at the Paris-headquartered cosmetics giant.
The company, which operates over 500 stores across North America, saw record-breaking sales in 2023, along with a sizable increase in the share of diverse managers since 2020’s racial reckoning. Additionally, Sephora named the Iranian-born Artemis Patrick its North America CEO last year, and she’ll be the first woman to hold that role when she assumes the corner office in April.
“The surge in diverse leaders comes as the beauty retailer notched some $19.4 billion in revenue last year, making it LVMH’s most profitable subsidiary,” says Emma. It’s also a profit-motivated play, allowing Sephora to understand and tap into a financially strong and loyal buying market. People of color in the U.S. hold nearly $3.9 trillion in purchasing power, with Black Americans alone spending $6.6 billion on beauty in 2021.
The below first appeared in sister newsletter CHRO Daily. Subscribe to that newsletter here. Emma’s interview below has been edited and condensed for clarity.
How did the murder of George Floyd affect your diversity strategy?
When Sephora hired me four years ago, right before the pandemic, my task was to build a DE&I Heart Journey; then the murder of George Floyd happened. We decided as a company to pause and listen to what was happening in our stores to help inform a new strategy and launch a different series of projects.
We’ve now increased the representation of talent of color in our leadership, so 52% of our leaders are of color. When we started in 2020, we were at 39%. What helped was revamping our recruiting processes and reviewing how we develop and advance talent. We also did not want to hire talent and then see them leave. We told ourselves, ‘Okay, so we have to look for these talents in different pools.’ Our recruiting team works with HBCUs and participates in the National Black MBA Fair.
We don’t have hiring quotas at Sephora because, obviously, it’s illegal. But we are asking our leaders to interview more BIPOC candidates. This has been very effective because we know there’s a ripple effect: The more BIPOC candidates you interview, the greater the likelihood of hiring them. And that’s exactly what we’ve seen so far.
Another helpful thing was having a D&I objective tied to performance reviews. Everyone at Sephora has a D&I objective tied to bonus compensation, from the store associate level up to the CEO. And that has helped tremendously to keep us accountable.
How do you respond to diversity critics like Elon Musk and Bill Ackman, who say that DEI is bad for business?
D&I is good for business. From a sense of belonging standpoint, we saw an increase in workers’ belonging score, as they are comfortable bringing their selves to work. From a business standpoint, we are a retailer that does well despite the [DEI criticism]. I also see a commitment from Sephora’s leaders and external stakeholders, who make up a steering committee. This external committee is composed of 25 leading voices in the field of equity, social justice, and racial equity, and they’ve been with us from the beginning when we launched the strategy. They are still supporting us and giving us feedback. It means that we are heading in the right direction and that we’ve found and surrounded ourselves with the right people to do the work collectively.
Artemis Patrick will become Sephora North America’s CEO next month. How should the head of DEI work with the CEO?
Commitment from the top is critical for any D&I initiative. We will continue this work, and [Artemis] will have her own legacy because she’s a woman of color. Our commitment will stay the same, and she will also provide the means to propel us to the next phase of diversity and inclusion at Sephora.
Emma Burleigh
emma.burleigh@fortune.com
Ruth Umoh
ruth.umoh@fortune.com
Join me in NYC on April 25 for a DEI roundtable hosted by FleishmanHillard to discuss what lies ahead for the industry. Space is limited. Sign up here.
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