07 November 2023
In our survey of media and tech businesses, we wanted to understand how business leaders felt about diversity and inclusion – spanning both social impact and approaches to governance in the area.
ESG (environmental, social & governance) refers to the three core principles used to measure and evaluate how responsible an organisation and its business practices are.
Environmental: How a company performs as a steward of nature and how it manages its impact on the environment.
Social: How a company manages its relationships with employees, suppliers, customers, and the communities where it operates.
Governance: A company's leadership, executive pay, audits, internal controls, and shareholder rights.
Against a context of rising temperatures across the globe and debate about global working, the environmental impact of our increasing use of technology is a key area for discussion. We touched on this in The Real Economy Generative AI topical report, including areas that business leaders may want to consider as they increase the amount of computing energy used in their innovations and product delivery.
Encouragingly, our research showed that 87% of our 200 respondents feel the media and technology sector has made good or excellent progress in developing and implementing ESG policies. However, this left 13% who think the sector is making little progress and that more needs to be done.
More must be done to boost diversity in leadership
Diversity and inclusion are two interconnected concepts that businesses across all industries must consider. Within the media and technology industries our survey found that all respondents had BAME representation in their leadership team – in some form. However, very few leadership teams reported more than 50% representation.
We also saw a trend of venture capital backed businesses reporting higher levels of representation than the total population – with over 54% of respondents reporting BAME leadership of 11-24%, compared to 48.5%, and 33% between 25 and 50%, compared to 21.5%.
One of the drivers for this may be linked to venture capital houses seeking to invest in companies with diverse founder groups and boards or encouraging the appointment of a diverse leadership team after investment. This can make great business sense, with diversity leading to business success, no more than in Silicon Valley. A report by the National Foundation for American Policy in 2022 found that, of the 582 start-ups valued at $1bn or greater in the US, over 55% had at least one immigrant founder. While our survey did not extend to place of birth or migration situations – we can make a connection here and recognise the correlation of diversity and success.
This clearly evidences the fact that it is in every businesses’ interest to continue improving representation at every level of the organisation.
In terms of gender diversity, 45% of companies said their leadership team is 11-24% female, with only 3.5% of respondents acknowledging a leadership team composed of more than 51% women. A very small proportion of respondents felt unable to confirm what percentage of their leadership team identified as female. A worrying finding in itself.
It is clear more can be done to promote diversity in leadership teams, which in turn will influence organisations’ cultures.
100% of businesses should have D&I policies
It is encouraging that 71% of respondents have policies in place for D&I, with the majority of these being either bank funded, a listed company or private equity backed.
Nevertheless, this should be higher. That more than a quarter of businesses surveyed (26.5%) said they do not have policies in place, is a real cause for concern.
And this particular concern is one that businesses should prioritise addressing. With 78% of respondents citing that recruitment has been challenging over the last 12 months, and in the face of a tech talent shortage and persistently stagnant economic conditions making it harder to give inflation-matching pay increases, retention of workforce will be key for many businesses.
Feeling part of a diverse and inclusive corporate culture will be a key element of many workers’ decisions in opting to take an opportunity elsewhere or remaining within their roles.
'An organisation that doesn’t have policies to ensure diversity and inclusion is discussed at a senior level is also unlikely to have the appropriate and documented governance structures to tackle the challenges that a lack of diversity and inclusion creates. Organisations should also review their Terms of Reference for the staff networks and the relevant sub-committees in order to track accountability and focus.
Other aspects of diversity are important, too, for example making positive steps in the organisation around neurodiversity, ensuring that all individuals are part of an inclusive, encouraging and inspiring environment.
It is clear that there is a lack of BAME representation in leadership across all the sectors – media and technology are no different.
Some sectors are starting to drill down deeper into their data, considering the ethnic groups within the broader BAME term separately. This approach will lead to more specific solutions and create a more positive impact as the findings can support more tailored monitoring and policies, that in turn lead to a richer and more inclusive environment.’
Karl George, Head of Governance