Cosmetics giant Sephora has made some significant changes to its DEI strategy over the last few years. Since her 2020 appointment to vice president of diversity and inclusion, George-Axelle Broussillon Matschinga was a key fixture in the company’s signing of the 15 percent pledge, making it the first major retailer to retain 15% of shelf space for Black-owned brands. In 2021, she also helped expand the reach of Sephora Accelerate to focus on founders of color. Also known as the talent incubator initiative, the six-month program helps small brands owned by people of color build and scale their companies with the objective of one day selling at Sephora. 

But her greatest success story might be in diversifying the company’s upper ranks. The share of managers who identify as people of color jumped from 39% in 2020 to 52% today. In the C-suite, people of color make up 42% of executives, up from 39% four years ago. Just last fall, Sephora named the Iranian-born Artemis Patrick its North America CEO, the first woman to lead the branch starting April 1st. The surge in diverse leaders comes as the beauty retailer notched some $19.4 billion in revenue last year, making it one of LVMH’s most profitable subsidiaries. Sephora appears poised to tap into a financially powerful and loyal buying market. Consumers 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.

Fortune sat down with Broussillon Matschinga to discuss how current events have informed Sephora’s DEI strategy, how she’s “disrupting” the hiring process, tying employee performance and compensation reviews to DEI-objectives, and the appointment of Sephora North America’s first woman CEO.

This interview 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

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