The need for diversity and inclusion isn’t a new debate, but it has been brought into the spotlight given recent events.
Achieving the level of diversity that is right and effective has proved a challenge for Boards in all sectors. And maintaining that diversity seems to be a challenge as well.
At Board level, in theory, every organisation needs to seek to increase or at least maintain the diversity of its board when recruiting. If we look at the typically underrepresented parts of the population at Board level we usually find women, young people, people with disabilities and members of minority or ethnic communities woefully absent.
The Hampton-Alexander review set a target of 33 per cent female representation on FTSE 350 Boards, Executive Committees and direct reports by 2020. However, latest figures show that a large number of organisations have not been able to reach this target. Further, there are few women in the roles of Chairs, Chief Executives, and the C Suite working in the business. Often women were found to be in non-Executive or represented support function roles rather than being operational in the business.
Diversity is much bigger than just gender. The Parker Review set a target that every FTSE100 Board should have one director of colour by 2021, this should be embedded in the FTSE250 by 2024. However, by early 2020, only six people of colour were Chairs or CEOs in the FTSE100.
This absence of diversity is not limited to the corporate sector. We also see it in the charity sector, for example. According to the Taken on Trust research by the Charity Commission, seven out of ten trustees are men. Charity boards do not often reflect the population at large nor the communities they serve.
Low levels of diversity mean less understanding and experience of issues. This is why setting higher level diversity targets is important to support a wider culture of diversity and inclusiveness.
Different types of board members as well as and regular and a healthy changeover can help keep the board fresh, keep new ideas coming and prevent leadership from becoming stale.
The challenge in recruiting diverse applicants is exacerbated by the practice of recruiting by word of mouth or personal recommendation. According to the Charity Commission, 81 per cent of charities recruit for Trustees in this manner. So how can we address these factors:
- adopt different external recruitment approaches, allowing the targeting of non-traditional applicants for roles;
- harness the benefits of increased remote working and technical solutions to reduce the requirement for onsite presence and encourage working age applicants;
- consider the timing, format and duration of meetings to ensure that they are inclusive in design and do not alienate people who hold full time roles elsewhere;
- look to co-opt individuals for specific projects or tasks who provide diversity in skill sets and experience, if they can’t commit to a full time role. This is particularly common for technical skills such as digitalisation or IT;
- implement a Young Director programme which provides an opportunity for novices to shadow experienced non-executives and learn the workings of the role without the legal responsibilities of a formal appointment;
- within organisations, encourage open debate around diversity and promote and inclusive culture; and
- implement reverse mentoring and ally programmes to give senior managers a pool of people to develop and provide effective succession planning to key board level roles.
Gender and race are of course, just two elements of diversity. It is common to find under-representation of LGBTQ+ and people with physical and mental health conditions. By addressing the under-representation and intersectionality of gender, race and social deprivation within Board make up, we can build stronger and more effective organisations to deal with challenges and ensure long term success, as well as make workforces feel more engaged and listened to.
For more information, please contact Liz Wright.