Mergers & Acquisitions names the 2021 PE Leaders in Diversity, Equity & Inclusion, including Kara Helander, managing director and chief diversity, equity and inclusion officer of Carlyle Group.
How does corporate America get more women and minorities into positions of management? For Kara Helander, the answer is to experiment. Her Science of Diversity and Inclusion initiative brings behavioral scientists and companies together to test how to supercharge inclusion of underrepresented groups into the workplace. It’s only the latest incarnation of Helander’s drive to change private equity and the companies they own.
Over half of new board appointments to Carlyle Group Inc.’s (Nasdaq: CG) portfolio companies last year were diverse, and greater than 50 percent of the firm’s $260 billion AUM is managed by women. The firm’s done its homework on how that translates into yield: “Over the past three years, the average earnings growth of Carlyle portfolio companies with two or more diverse board members has been nearly 12 percent greater per year than the average of companies that lack diversity, showing the concrete impact of our board diversity work,” Helander told Mergers & Acquisitions.
Monetizing DEI goals may be an effective accelerant in an industry that prides itself on outsized returns. And here, Carlyle may be without rival. Employees from the CEO down are eligible for a DEI bonus for advocating inclusivity. The firm’s reach extends to the nearly million people working beyond its doors as well: portfolio companies with at least 30 percent board membership are eligible for a slice of Carlyle’s $4.1 billion revolving credit facility at a reduced coupon.
Helander shared some insights with Mergers & Acquisitions in this Q&A:
What results have you achieved?
As of January 2021, progress includes:
Women:
•23 percent of current senior leaders are women
•29 percent of new hire senior leaders were women
•44 percent of current employees are women
•46 percent of new hires were women
•>50 percent of $260 billion AUM is managed by women
•58 percentof our new hires in Europe and 52 percent in Asia were women
Ethnic minorities
•We are focused on recruiting diverse, entry-level talent. Over the past five years, more than half of the associate class in U.S. Corporate Private Equity (CPE) has been diverse, with the 2020 class being 65 percent diverse
•Over the past 6 years, our in-coming analyst class in U.S. CPE has been more than 50 percent diverse
•37 percent Ethnic minority employees (U.S.)
•42 percent Ethnic minority new hires in 2020 (U.S.)
•54 percent of investment professionals hired in the U.S. in 2020 were female, Black/African American, or Latinx
•800+ participants in our Global Mentoring Program over the last 4 years
•63 percent of new hires in the U.S. were women or ethnic minorities
What steps are you taking to improve DEI at your portfolio companies?
Thanks to multiple years of investment, we are making significant progress on the composition of the boards of our portfolio companies. In 2016, we created a goal within our U.S. Corporate Private Equity division to have diverse boards for all of our majority-owned company boards within two years of taking control of the company. At the time, 38 percent of boards met this goal. Five years later, that figure has risen to 80 percent overall and 100 percent in U.S. Buyout, our largest fund. In 2020, we set a new goal of having 30 percent diverse board directors on all of Carlyle’s portfolio companies within two years of ownership, with measurable KPIs. There has been notable progress since establishing this goal: 56 percent of all new directors added to goal eligible portfolio companies globally were diverse in 2020.
Anything you’d like to add?
I have spent my career dedicated to advancing diversity and inclusion, and remain committed to this goal at Carlyle. While I am proud of the progress Carlyle has made in the past three years, I also recognize the constant and continued need to hold ourselves accountable to helping create an inclusive, equitable and diverse environment for our employees, companies and communities globally. We recognize the duty we have to take a step back and ask ourselves and our employees difficult questions to spur conversations, hear different perspectives and challenge the status quo.
Following the acts of injustice that occurred last summer, we developed the Standing Together program, where more than 600 employees globally participated in listening sessions, allowing employees to share their unique experiences and multicultural perspectives. This inspired Carlyle’s people to expand beyond the lens of their own perspective and build deeper understandings as more effective allies.
Lastly, with an understanding of the profound impact of the pandemic on vulnerable communities, I helped establish Carlyle’s partnership with Ascend and 100 other organizations that addressed stigmas and biases against certain groups via community support, monetary donations and increased awareness. While we are proud of the progress we’ve made, I recognize that there is always more work to be done and I am committed to continue moving the needle and pushing Carlyle and our peers in the right direction.
