Diversity has had a chequered trajectory during the pandemic. There is much evidence that gender diversity has suffered, and this became clear in the early days of lockdown. In the UK the gender pay gap reporting was put on hold and in Fidelio’s webinar ‘A Snapshot – Gender Diversity in UK & German Boardrooms’, panellist Philine Erfurt Sandhu made very clear the reversion to social conservatism and traditional role models in the German market. While there has been celebration of female leaders who have had a strong track record during the pandemic, in particular in New Zealand and Germany, there has also been concern that many of the bodies taking decisions regarding the crisis have been male dominated.
Then came Black Lives Matter, and the anger that was unleashed. This put diversity firmly back on the political and business agenda. From the Chair conversations that Fidelio has conducted over the past month, diversity has risen once again to be a priority, and we see Boards and Chairs internationally looking very critically at their track record to date. External scrutiny of progress towards diversity is also intensifying; in the US, for example, a recent letter from ISS urged companies to disclose the ethnicity of Directors and senior executives – one indication among many that inadequate diversity will increasingly hamper access to capital.
Fidelio has played an active and multi-faceted role in promoting gender diversity internationally at Board and Executive level. We know from the progress towards gender diversity that there is no silver bullet. While the Hampton-Alexander Review recently met its target of 33% women on FTSE 100 Boards, up from only 12% in 2011, at Chair level, female representation remains woefully low in the UK (currently 6% of the FTSE 100); the majority of countries now have hard or soft targets on gender diversity but progress remains slow with countries such as Germany and Japan still having a significant hill to climb.
The end goal has to be achieving diversity – diversity of thought, diversity of composition. The risks of group think are well rehearsed and the benefits of diversity throughout the organisation, including innovation and inclusion, are understood. Few business leaders would dispute the need for enhanced diversity – across all its manifestations: gender, ethnicity, sexual preference, age and disability. And yet the majority of organisations both struggle to meet their diversity objectives, and importantly, also struggle to give comfort to stakeholders about the rate of progress.
The reality is, for many organisations the end goal of achieving diversity is some way off. But this is not a cue for hopelessness. By shifting the focus to enabling diversity, there is the opportunity to build a pathway to diversity of composition. Enabling diversity can be grasped by Boards today. It is establishing that pathway towards the end goal of cognitive diversity and inclusion, and importantly it has the credibility to bring employees, stakeholders, shareholders with the company on the journey.
Fidelio’s experience across Search, Evaluation and Development, including the internationally recognised “A Seat at the Table” Board Learning Programme, has shone a light on what works. It has also given Fidelio clear insight into some of the barriers that are preventing organisations, however well intentioned, from making progress.
Enabling diversity requires leadership; it also requires critical and analytical thinking to identify the key obstacles; and granular attention to detail and implementation to shift the dial sustainably. Importantly enabling diversity includes engagement and communication. It lays the foundation of trust for employees, stakeholders and shareholders who are impatient for change and mistrustful when a decent road map is missing.
Rather like tackling climate change, enabling diversity requires long-term commitment, as well as openness to transformation i.e. doing things differently. It lies within the gift of a Board and the Executive Committee that is willing to (i) build an understanding of where the key obstacles lie and (ii) to demonstrate application in overcoming these obstacles across hiring, promotion, development and engagement, indeed all aspects of company life and business opportunity.
Achieving diversity is much more than an interim step; it is digging a very firm foundation on which diversity and all its business benefits can flourish.
Fidelio is proud to be supporting Boards to enable diversity, bringing innovation and insight to our diagnosis and recommendations with a relentless focus on what works.
To learn more about how Fidelio can support your Board to enable diversity, please contact firstname.lastname@example.org.